Types of Business Ownership 101
Which type of business ownership is run by a single individual?
Sole Proprietorship
What is one of the pros (advantages) of a sole proprietorship?
Easy and inexpensive to create
Owner receives all profits
Least regulated form of ownership
Business pays no taxes. Owner pays personal income taxes which is a lower rate than the corporate tax rate.
What is organizational structure in business mean? Why does does a business need it?
A plan which shows how the jobs in your company relate to one another
Smaller companies may have everyone report to the owner. The larger the company, the more layers of management needed.
What are the 3 main ways that a person can protect their creations? Inventions? Ideas? Products?
Copyrights
Trademarks
Patents
Which business ownership type(s) die with the owner if the owner passes away?
Sole Proprietorship
Partnership
What is 1 pro and 1 con of partnerships?
Inexpensive and easy to create
Share ideas, abilities, and financial obligations
Owners pay taxes as personal income which is taxed at lower rate.
Difficulty in dissolving partnership
Personality conflicts
Partners held liable for each other’s actions
Name 2 resources/ways that an entrepreneur can increase their skills/knowledge if they feel they are inadequate.
READ! Take classes. Network with others who have complimentary skills. ASK QUESTIONS. SBA. BE HUMBLE.
What is a legal agreement that gives an individual the right to market a company’s products or services in a particular area? Give an example.
A franchise. Chick Fil A.
What makes partnerships hard to dissolve?
Partnership Agreement (legal contract)
What is the main advantage of a Corporation?
Limited liability for owners
Name 3 of the "good management skills" that we learned in class.
Human Relations
Communications
Networking
Math
Problem Solving & Decision-making
Technical Skills
Time Management
Conceptual Skills
What are the main ways to fund a business?
Private Equity
Government Funding
Personal Funding (bootstrapping)
Loans
(Crowdfunding)
Who are the owners in a Corporation?
SHAREHOLDERS
Founders
What will happen if you don't pay business/personal income taxes?
What is a disadvantage of Corporations?
JAIL! FINES! PENALITIES!
DOUBLE TAXATION
If you have a manager working for you and they are struggling to demonstrate good management skills, what should be the first thing you do to solve the problem?
Reach out. Offer support. Train. (Hiring costs money!!)
What are the 3 main financial documents that business owners use to manage their finances? Explain each one and what information they typically contain.
Profit & Loss Statement- Revenue, Expenses, Profit
Income Statement-Revenue, Expenses, Profit
Balance Sheet- Assets, Liabilities, Equity
What should you do before you officially go through the process of starting your business on paper?
Before you start your company… Check with your state, accountants, or attorneys to determine which form of legal ownership most benefits your needs, company size, financial status, and issues of liability.
What business ownership type(s) allows owners to avoid double taxation? Pass-through taxation
S-Corporations
LLC
No question-2 choices: You can either choose to donate these points to another team of your choosing or you can choose to get a piece of candy for each of your team members.
How many guest entrepreneurs did we have visit us this semester? Name them and their business.
Zach Barney-Mobly
Deric Glissmeyer-Colorado Kernels
Dallas Lawrence-Lawrence Championship Karate
Ben Clayton-Chick Fil A