Discuss the ___________ enterprise system

Free Enterprise System Referred to as _________________. Encourages individuals to start and

operate their own _____________________________ without government involvement.

Allows the _______________________to determine prices through supply and demand.

Basic Economic Freedoms Freedom of _______________ Competition Risk __________

Freedom of ownership The _________________ to

_____________choose a house, car, job or business.

There are restrictions on how and where particular businesses can _________.

Ex. zoning

Competition A ______________ between two or more

businesses to gain as much of the total _____________ share or as possible.

Helps maintain________________ prices, provides consumers with new and improved products and results in a _______________ selection of products from which to chose.

Forces businesses to ___________________ in the most efficient manner possible.

Risk The potential for ___________ or failure.

Profit The essence of the

______________________________ system.

The money earned from conducting business after all costs and expenses have been __________.

Advantages of Entrepreneurship

Personal ________________________ to make key business decisions.

Personal fulfillment and feeling of self worth

Potential for ____________income

Disadvantages of Entrepreneurship

Risk associated with ____________________________ of income

________ can be long and often irregular

Sole Proprietorship A business owned and

operated by _______ person

______% of all businesses in the US are sole proprietorships

Advantages of a Sole Proprietorship

Ease of ___________ Limited government

regulations including taxes

Profits go to the ______________

Freedom in making business decisions

Disadvantages of a Sole Proprietorship

Unlimited _____________________

Responsible for all aspects of the business including skills and _______________

Life of business is limited to the life or interest of the owner

Partnership

A business owned and operated by ______ or more people.

Less than ________% of all businesses in the US are partnerships

Types of _____________________ General partnership

_________ partnership

General Partnership An ___________________ in which both

partners agree to share equally in the profit and/or loss of the business

Each partner is _______________ for all debts incurred by the business

______________ Partnership Each partner is liable for any

debts of the business up to the amount of his/her investment

Must have at least ______________ partner who has ___________ liability

Advantages of Partnerships Relatively____________________ to start Combined financial resources and knowledge Shared management responsibilities Increased ________________ for profits Shared responsibility for risk ________________ less than a corporation A change in ownership does not alter the

continuity of the business.

Disadvantages of Partnerships Partners can disagree about business

decisions The decision or action of one partner is

_______________ binding on the other partner, including ___________

If one partner ____________, the business is dissolved

Corporation

A business owned by ____________________

A legal entity that is chartered by the state in which the business is located

_____________, directors and officers manage the daily operations

Types of Corporations _____________ (closed) -- Do not offer

shares of stock for sale to the general public

______________ (open) -- Offer shares of stock for sale to the general public

Subchapter “S” – Taxed like a sole proprietorship and limited to 35 or less shareholders

Advantages of Corporations Delegation of specific management skills Limited liability for __________________ Life of the corporation is unlimited Easier to _____________ capital Stockholders can easily enter or leave the

business by purchasing or _________________ stock

Disadvantages of Corporations Numerous_____________ restrictions Complex to start up and dissolve Taxed heavily Complex ___________________ keeping

Franchise A business or _____________________

with the right to use an established name and ________ trademarked products

Granted to a retailer or a wholesaler for a fee

Advantages of Franchises ________________liability due to name

recognition and common products Franchisor usually provides training Business plan is ____________________

by the franchisor, modified for the location and _________________

Disadvantages of Franchises Freedom to make business decisions is

limited _________________________ may be

expensive Supplies and products must be purchased

_______________from the franchisor