162-Module4-Jan26-900pm-AsGiven-Lecture2

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Sole Proprietorships:

Sole Proprietorships © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Lecture 2

Sole Proprietorship:

Sole Proprietorship Sole Proprietorship Businesses owned and operated by one individual; the most common form of business organization in the United States Many focus on services rather than manufacturing Typically employ fewer than 50 people Comprise nearly three-quarters of all U.S. companies Men are twice as likely as women to start their own business 2 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Advantages of Sole Proprietorship :

Advantages of Sole Proprietorship Advantages Ease and cost of formation Allow a high level of secrecy Owner keeps all profits Flexibility and control of the business Government regulation is minimal Taxes paid only once Can be dissolved easily 3 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Disadvantages of Sole Proprietorship :

Disadvantages of Sole Proprietorship Disadvantages Unlimited liability Scarce external funding Owners need diverse skills Success is tied to the owner Lack of qualified employees Higher taxation 4 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Finding Talented Employees:

Finding Talented Employees Sole proprietorships have greater difficulty attracting talented employees Large corporations such as McDonald’s have better profits and more job opportunities Difficult to match the wages and benefits offered by large corporations Little chance for advancement within sole proprietorship 5 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

Entrepreneur:

Entrepreneur This entrepreneur opened his small business as a sole proprietorship As sole proprietor, he keeps his profits but is personally responsible for all risks and financial obligations 6 © 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

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