Ways of Becoming a Business Owner

Four Ways: 1. Starting a new business 2. Buying an existing business 3. Buying a franchise 4. Taking over a family business

1. More time and effort 2. Start up cost are often high 3. If you borrow money you'll have to convince lenders that your business idea will work 4. It is risky no matter how well you plan you won't know if the business will succeed until you've tried it

1. Are the expenses involved in going into business 2. Examples: renting or buying space and buying equipment, office supplies, and insurance

-most businesses are sole proprietorship -completely owned by one person

owner makes all decisions easiest form of business to set up least regulated of the three forms of business

~limited by the skills abilities and the financial resources of one person ~difficult to raise funds to fiance business ~owner has sole financial responsibility for company: personal assets sometime at risk

~is a legal arrangement in which two or more people share ownership ~control and profits are divided among partners according to a partnership agreement ~is the least common of the three forms of business ownership

~can draw on the skills abilities and financial resources of more than one person ~easier to raise funds than in a sole proprietorship

-more complicated than sole proprietorship -tensions and conflicts may develop among partners -owners liable for all business losses person property sometimes in jeopardy

- is a business chartered by a state that legally operates apart from the owners -the owners buy shares or parts of the company -they are called shareholders and earn a profit based on the number of shares they own -often have an easier time getting financing but are required to maintain significant records that are not required for other forms of ownership

-easier to fiance than other forms of business -financial liability of shareholders limited (usually can lose only what they have invested)

-expensive to set up -record keeping often time-consuming and costly -often pays more taxes than other forms of business