I'll give you a hurndred points!!!**
The Franchise Alternative
In Chapter 22, read “The Franchise Alternative” section and answer the following questions:
Why might a franchise be a good idea for someone who wants to start a business but doesn’t have large amounts of money?
What factors contribute to the high cost of maintaining a franchise?
The Corporation
In the Chapter 22 Exercises section, complete the matching and multiple-choice questions.
The Sole Proprietorship and the Partnership
Read this assignment. Then read Chapter 21 in your textbook.
Why Do People Go Into Business for Themselves?
Running a business includes taking on risk and responsibility. So why would anyone want to start a business? The answer is different for every business owner, but a few reasons are commonly given:
More freedom over your working conditions and hours
Freedom to sell whatever product you want
Potential to keep the profits of the business
Most people don’t have the money to open a business on their own and must borrow to make the business a reality. Before lending money, banks will want to know that a potential business owner is well prepared and has a business plan in place. A business plan provides the details of a future business, including potential market and competition information. Read about business plans on pages 318–319 of your textbook.
Sole Proprietorship
A sole proprietorship is a business owned by one individual. In the United States, this is the most common form of ownership. However, most business in dollar amounts is done by corporations.
Sole proprietorships have several advantages:
Ease of operation. They’re the easiest and least expensive business forms to create.
Potential profits. All profit made by the business belongs to the owner.
Freedom of operation. Proprietors (the business owners) are able to run their businesses as they see fit.
They also have some disadvantages:
Limited life. Proprietorships last only as long as the person who owns it.
Limited funds. One person has a limited ability to borrow or raise funds for the business.
Limited abilities. Proprietors may get stuck trying to handle situations for which they lack the required skills.
Unlimited liability. The proprietor is personally liable (legally responsible) for all debts of the business.
Partnership
A partnership is a business owned by two or more people. Such businesses tend to be defined by legal contracts signed between the owners, detailing investment requirements and ownership shares. Like a sole proprietorship, a partnership has its own advantages:
More money (capital) available. Partnerships have more than one source of money to start or expand the business. In addition, banks are more willing to lend to a partnership than to a proprietorship.
More skills available. Co-owners are able to pool their skills and talents to help run the business. Business responsibilities may also be divided.
Partnerships also have disadvantages:
Unlimited liability. Just as in a proprietorship, the partners are liable for the debts of the business.
Limited life. A partnership is legally ended when one partner dies. While the business can continue, a death of a partner represents a legal problem.
Limited funds. Funds are limited by the personal funds of the partners and what money they can borrow.
Partner disagreements. With than one owner, there may be disagreements, causing potential problems for the business.