Types of business ownerships and their definitions
Sole Proprietorship
A business owned by one person.
Profit
Business that has a main goal of making money and most decisions are for its own benefit
Business
An organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers for the purpose of making a profit
How do consumers influence service?
Consumers Influence the type of service a business offers
Step 1
Determine the decision to be made
Partnerships
A business owned by two or more people with a verbal/written partner agreement.
Non - Profit
Business that has a main goal of helping others or putting the money back into other things instead of earning money.
Profit
Total amount of money you earn after you take away the costs. To calculate it you subtract revenue from cost.
What is consumer purchasing power?
Purchasing power is the ability of consumer to buy goods and services where they like and at a price they'd like to buy it for
Step 2
Identify the alternatives
Corporations
A business that has legal status with rights, privileges and liabilities. Can be large or small.
Local
Business that only sells in a specific area
Supply
Amount of a product that sellers are willing/able to sell at a specific price.
What is pricing power?
Businesses ability to increase prices according to increased cost or to increase profit
Step 3
Evaluate the advantages and disadvantages of the alternatives
Cooperatives
A business owned by workers/members. The goal is service and not profit.
Business that only sells in a specific country
Demand
Amount of product that consumers are willing/able to buy at a specific price.
How do consumers influence competition?
Consumers will influence lower prices through competition causing businesses to lower prices so they can be better than their competitors
Step 4
Make a decision and take action
Franshises
Joint adventure between a franchisor (seller) and franchisee (buyer).
Global
Business that sells world wide.
Liability (limited + unlimited)
Amount responsibility the owner of a business has. The amount of liability for a sole proprietorship is unlimited in comparison to a corporation where it is limited.
“Buying to _____” is common in buying patterns of young people
Belong
Step 5
Evaluate the decision.