Bell Ringer Which of the following lists includes all of the U.S. market structures? A. Monopoly, Oligopoly, Imperfect Competition, Perfect Competition B. Perfect Competition, Monopolistic Competition, Monopoly, Oligopoly C. Oligopoly, Monopolistic Competition, Monopoly, Economies of Scale D. Economies of Scale, Natural Monopoly, Monopolistic Competition, Monopoly
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Bell Ringer Which of the following lists includes all of the U.S. market structures? A. Monopoly, Oligopoly, Imperfect Competition, Perfect Competition.
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Bell RingerWhich of the following lists includes all
of the U.S. market structures?
A. Monopoly, Oligopoly, Imperfect Competition, Perfect Competition
B. Perfect Competition, Monopolistic Competition, Monopoly, Oligopoly
C. Oligopoly, Monopolistic Competition, Monopoly, Economies of Scale
D. Economies of Scale, Natural Monopoly, Monopolistic Competition, Monopoly
Bell Ringer February 13th Think about all the different stores in Jackson. There are many types including restaurants, clothing stores, hobby stores, supply stores, general stores, and money saving stores.
Are all the stores in Jackson structured the same (owned/created the same way)?
If yes, how are they structured? If not, how do they differ?
Brainstorm two examples that demonstrate your above answers.
Bell Ringer February 13th
What is the term?
Clues: This term is on the word wall. This term has seven syllables. It is made of two words. This term is an establishment of
selling products to consumers. This term has multiple types within
it.
Business Organizations
Chapter 8
Sole Proprietorships
Section 1
Learning Objectives
Explain the characteristics of sole proprietorships.
Analyze the advantages of a sole proprietorship.
Analyze the disadvantages of a sole proprietorship.
Agree/Disagree - Write it down1. Sole proprietorships can only be owned by
one person.
2. Sole proprietorships make up only 15% of all businesses in the United States.
3. You have to get a business degree in order to start your own business.
4. Most sole proprietorships fail due to lack of freedom to do what the owner wants with the business.
Sole Proprietorship Business Organization – an
establishment formed to carry on commercial enterprise
Sole Proprietorship – a business owned and managed by a single individual 75% of ALL businesses 6% of all U.S. sales
Advantages of Sole Proprietorships Easy to Establish & Start-up (inexpensive)
Few Regulations Appropriate codes related to business
ex. health codes (food) Zoning laws may prohibit out-of-house businesses
Keep ALL profits Doesn’t have to share with stockholders or pay
special taxes Complete Control
Run it how they want to…no one else has a vote Easy to Discontinue
Disadvantages of Sole Proprietorships Unlimited Personal Liability
Liability – legal obligation to pay debts If the business fails, owner may have to sell
property to cover any debt and obligations Ex. If you take out a loan for a piece of needed
equipment, you still have to pay the loan back no matter what
Limited Access to Resources Everything comes out of you own pocket/savings May not have all the training to run every aspect
of business Ex. Really good at cutting grass, but not so good at
keep track of bills/taxes/loans/profit (paperwork in general)
Disadvantages of Sole Proprietorships Lack of Permanence
Cannot depend on someone else to maintain business Ex. If the owner dies, retires, looses interest, gets sick,
or moves – the business ceases to exist Short-term Employees
Employees are hard to keep because there is a lack of security and/or advancement
Lack of fringe benefits Fringe Benefits – payment other than wages or salary
Ex. Paid vacation, retirement payments, health insurance, etc.
Create a comparable chart.
Using your notes and a partner,
fill in this chart for each type of business that we discuss.
•Pick partners carefully•Create articles of partnership
•More potential for growth but loses personal touch
Recap
Bell Ringer
Name the three different ways to combine a corporation and
describe how they are different.
Please, use complete sentences.
Other Organizations
Section 4
Business Franchises What is it?
A semi-independent business that pays fees to a parent company (franchisers) in return for the exclusive right to sell a certain product or service in a given area.
Examples: Fast Food Chains – McDonald’s, Burger King, Sonic,
Wendy’s Restaurants – Chili’s, Olive Garden, Cheddar’s, TGIF’s Mall Stores – Kay Jeweler’s, Aeropostale, Sunglass Hut Gas Stations – BP, Shell, Love’s Truck Stop
Advantages of Franchises Built-in Reputation Management Training and Support
Allows inexperienced owners to be successful Standardized Quality
Follow certain rules/guidelines & provide certain products
National Advertising Program National campaigns paid by franchisers
Financial Assistance Some franchisers provide loans to start business
Centralized Buying Power Franchisers buy products in bulk and pass on savings
Disadvantages of Franchises Franchise Owner Sacrifices Some Freedom
Must follow franchiser’s guidelines High Franchising Fees & Royalties
Franchisers charge high fees for the right to use their name
Franchisers charge franchises for part of profits (royalties)
Strict Operating Standards Includes: hours of operation, dress codes,
operating procedures Purchasing Restrictions
Must buy products & supplies from the franchiser Limited Product Line
Only offer products approved by franchiser
Nonprofit Organizations Institution that functions much like a business
in order to benefit society, but does not operate for the purpose of generating profits
Operate with partial government support Exempt from income taxes Usually provide services rather than goods
Types Professional Organizations – NEA & American Medical
Association Business Associations – Better Business Bureau Trade Associations – American Marketing Association Labor Unions
Proprietorships
Partnerships Corporations Franchise
Characteristics
•One owner•75% of all U.S. Businesses
• 2 or more partners•General•Limited•Limited Liability
•Entity•Stockholders•Private or Public•20% businesses•Sell 90% products•70% net income earned
Advantages
•Easy to start-up•Few regulations•Keep ALL profits•Complete control•Easy to discontinue
•Easy to start-up•Shared decision making•Larger resource pool•Taxation
•Limited liability for owners•Transferable owners•Growth ability•Long life
Disadvantages
•Unlimited personal liability•Limited resources•Lack of permanence