2. Describe the characteristics of successful
entrepreneurs
Discuss responsibilities of owning your
own business
Explain advantages/disadvantages of
partnerships
Describe the types of businesses suited to
the partnership form of business
3. Recall: A person who assumes the risk of
starting, owning, and operating a business
for PROFIT
Often invest months/years before earning
profit
½ of all new business end within the first
five to six years
How many people own businesses?
5. To start your own business you need:
• Adequate funds
• General knowledge about business
• Some work experience
• A business opportunity
• A BUSINESS PLAN - written document that
describes the nature of the business, its goals and
objectives and how they will be achieved
• **most important step in starting a business
7. Sole Proprietorship:
Most common form of business organization
Owned and managed by 1 person – the “Proprietor”
• Performs day-to-day tasks with help of hired
employees
• Furnishes expertise, $, and management
• Is entitled to ALL PROFIT
• Creditors have full claim to the assets/property if
business is in debt
8. Business owned by 2 or more people
Once partnership is formed (p122-123)
1. Partnership Agreement should be drafted
2. Balance Sheet – combined assets/liabilities
Determine responsibilities
• Silent partner- no active part
• Secret partner- not known to public
Around 1.6 Million
Partnerships in U.S.
10. Owner is Boss
Owner receives all PROFITS
Owner personally knows employees and
customers – develops close relationships
Owner can make quick decisions
Owner is free from ‘red tape’ – lots of legal
documents or gov’t restrictions
Pay LESS income tax than Corporation
11. Owner may lack necessary skills/abilities
Owner may lack funds
Owner bears all LOSSES
Illness or death may close the business
12. Personal services
• Dentists
• Barbers
• Landscapers
• Carpenters
Those which sell merchandise/services on a
small scale
• Family restaurants
• Newspaper stands
• Small grocery stores
Do not require a large amount of CAPITAL
13. Business owned by 2 or more people
Once partnership is formed (p122-123)
1. Partnership Agreement should be drafted
2. Balance Sheet – combined assets/liabilities
Determine responsibilities
• Silent partner- no active part
• Secret partner- not known to public
Around 1.6 Million
Partnerships in U.S.
14. Skills & abilities are pooled together
More Capital
Credit position improved
Contribution of Goodwill improved
↑ed concern in business management
Lower tax burden than corporations
Reduced competition
Operating more efficiently by
combining 2 or more businesses
15. Unlimited financial liability
Disagreement among partners
Each partner bound by contract of others
Uncertain life
Limited sources of capital
Unsatisfactory division of profits
Difficulty withdrawing from partnership
16. More than one kind of product or service
• Car dealership- sales / service depts
Operates in more than 1 location
Operates more than 8 hours/day
Popular with professional services
• Lawyers (Schwebel, Goetz & Seiben)
• Doctors
• Accountants
• Financial consultants