Business Test 1

Front 1

Ecommerce

Back 1

Online bussines and transactions

Front 2

Ecommerce Advantages

Back 2

1. Can reach narrowly defined markets that are geographically diverse
2. Cheap way to provide online price information, delivery times
3. Consumers can compare prices of different companies
4. Open 24/7
5.Quick to transmit payrole checks tax refunds and social security checks
6. Good way to reach international customers

Front 3

Ecommerce Disadvantages

Back 3

1. Not all products are well suited for internet sale
2. Some people are scared to buy online
3. Laws have not kept pace with rapid changes in technology

Front 4

Sole Proprietorship

Back 4

only 1 owner

Front 5

Sole Proprietorship Advantages

Back 5

1. People like idea of being their own boss
2. Easy to start
3. Pride of ownership
4. If business is successful, you can leave a legacy to leave your children
5. Owner gets to keep all profits
6. Owner gets to keep all profits

Front 6

Sole Proprietorship Disadvantages

Back 6

1. Unlimited liability – if business fails, the owner loses everything
2. Limited financial resources
3. Management difficulties
4. Lots of time commitment
5. No fringe benefits – healthcare, retirement plan
6. Limited life – many fail within 1st year

Front 7

Partnership

Back 7

2 or more owners

Front 8

General Partnership

Back 8

all of partners take place in daily operations of business and all face unlimited liability

Front 9

Limited Partnership

Back 9

must have at least 1 or more general partners but also have limited partners – investors who loan money. Do not take part in operations

Front 10

Partnership Advantages

Back 10

1. More financial resources
2. Each owner has expertise in different areas
3. Longer survival

Front 11

Partnership Disadvantages

Back 11

1. Still limited liability for general partners
2. Have to share the profits – smart ones specify how profits are split
3. Partners don’t always agree on decisions
4. Difficult to terminate

Front 12

Corporation

Back 12

chartered by a state – legal entity separate from owners – can do things that stockholders don’t agree with

Front 13

Corporation Advantages

Back 13

1. Limited liability for stockholders
2. Live forever
3. Easy to change ownership – buy and sell stocks

Front 14

Corporation Disadvantages

Back 14

1. Expensive to start
2. Lots of paperwork for government
3. Sometimes too large and hard to keep track of everything
4. Double taxation – pay federal and state income tax on profits
5. Have to pay dividends to stockholders

Front 15

S-Corporation

Back 15

legal entity created by government combine advantages of corporation and sole proprietorship – stockholders – no double taxation

Front 16

S-Corporation Requirements

Back 16

1. Max of 150 stockholders
2. All stockholders must be US citizens or permanent resident
3. Only 1 category of stock
4. All stockholders must agree to form an S-Corporation

Front 17

Franchise operation

Back 17

well-known product and well-known brand name and allows others to sell it

Front 18

Franchise Advantages

Back 18

1. Get management and marketing assistance
2. Most products successful
3. Give help in locational assistance
4. Promotional assistance
5. You are your owner
6. Give you financial assistance
7. Have a much lower failure rate

Front 19

Franchise Disadvantages

Back 19

1. Large start-up cost
2. Limited profit
3. Run by McDonald’s rules
4. Can have restrictions on selling

Front 20

Partnership Disadvantages

Back 20

1. Still limited liability for general partners
2. Have to share the profits – smart ones specify how profits are split
3. Partners don’t always agree on decisions
4. Difficult to terminate

Front 21

Government Owned Corporations

Back 21

Owned by Federal, State, or local Gov’t

Front 22

Corporation

Back 22

chartered by a state – legal entity separate from owners – can do things that stockholders don’t agree with

Front 23

Corporation Advantages

Back 23

1. Limited liability for stockholders
2. Live forever
3. Easy to change ownership – buy and sell stocks

Front 24

Corporation Disadvantages

Back 24

1. Expensive to start
2. Lots of paperwork for government
3. Sometimes too large and hard to keep track of everything
4. Double taxation – pay federal and state income tax on profits
5. Have to pay dividends to stockholders

Front 25

S-Corporation

Back 25

legal entity created by government combine advantages of corporation and sole proprietorship – stockholders – no double taxation

Front 26

S-Corporation Requirements

Back 26

1. Max of 150 stockholders
2. All stockholders must be US citizens or permanent resident
3. Only 1 category of stock
4. All stockholders must agree to form an S-Corporation

Front 27

Franchise operation

Back 27

well-known product and well-known brand name and allows others to sell it

Front 28

Franchise Advantages

Back 28

1. Get management and marketing assistance
2. Most products successful
3. Give help in locational assistance
4. Promotional assistance
5. You are your owner
6. Give you financial assistance
7. Have a much lower failure rate

Front 29

Franchise Disadvantages

Back 29

1. Large start-up cost
2. Limited profit
3. Run by McDonald’s rules
4. Can have restrictions on selling

Front 30

Government Owned Corporations

Back 30

Owned by Federal, State, or local Gov’t. Usually provide a service that private business isn’t interested in

Front 31

Examples of Government Owned Corporations

Back 31

1. NASA
2. Federal Deposit Insurance 3. Corporation
4. AMTRAC
5. Buses

Front 32

Non-Profit Organizations

Back 32

1. Usually associate with charities, musueums, hospitals, and education system
2. Usually sale revenue far exceeds expenses - Surplus

Front 33

Coopertives

Back 33

1. Really small producers combine together to sell under one name
2. Usually find in agriculture but can be in any field

Front 34

Small Businesses

Back 34

Most of job creations come from small businesses

Front 35

Small business succeed when:

Back 35

1. Give personal attention to customer
2. Produce a product that is not easily produced by mass production
3. When sales aren’t large enough to appeal to large coporation
4. Owners and managers pay attention to changes in customers or competitors

Front 36

Small business fail because:

Back 36

1. Haven’t done a good background of market
2. Overprice or underprice product
3. Start with too little capital/financing
4. Buy too much on credit
5. Did not keep accurate records
6. Forget about paying taxes, insurances, etc.