Business Organizations I.
We will be using Cornell Note Taking
Format Today!
“Stay hungry…..stay foolish!”
-Steve Jobs
Relax and enjoy the ride
in Econ. Class!
Unit Three: Learning Objectives:
North Clackamas School District
Social Studies Priority Standards:
Econ 51 (B): Define economic terms and
identify examples of them in a current
economy.
Go directly to your notes. Do not pass go. Do not collect $200!:
Business organizations
We will share in groups and share out as a class!
http://www.usnews.com/usnews/tech/billgate/room12a.htm
They have three children, daughters Jennifer
Katharine & Phoebe Adele, and son Rory John.
They will each inherit just $10 million each.
Melinda loves to share her
econ knowledge with Bill.
Bill’s wife, Melinda, attended Ursuline Academy in Dallas, TX.
She graduated from Duke University with a major in “Economics.”
Most expensive residential house ever built. The $1.4 million
guest wing has two bedrooms, 2 bathrooms, and its own
dining room. 66,000 square feet equal to 1.5 acres. The
house has 7 bedrooms, 24 bathrooms, 6 kitchens and 6
fireplaces. The annual property taxes run over $1 million.
Pool: $6 million, 60-foot long, complete with a
waterfall & its own underwater stereo system.
Library has 10,000 rare books including da
Vinci’s 72 page $31 million scientific notebook.
Bill’s garage has 3 Porshes [the 99 above is favorite] 1 Mercedes,
1 Jaguar, 1 Ford Mustang, and a Ferrari. His other $1.2 million
garage will hold 30 cars. Bill can jump off excess energy in
his trampoline room with 20-foot high ceilings.
T-Chart: Business Organizations
Business Failures
Advantages of a Sole Proprietorship
A. Easy to quit the business if the
owner decides to do so. There are
no co-owners to consult.
B. Owners receive the entire profit.
C. Easy to form–no complicated legal documents or
complicated tax forms, small amount of capital needed.
Personal satisfaction (psychological-being your
own boss) prestige and a sense of accomplishment.
D. Total control – can make decisions
quickly, can hire and fire easily, can
respond quickly to trends.
Disadvantages of Sole proprietorships
A. Unlimited liability (debt) - have to forfeit
their personal possessions as well as their
businesses. (auto, other business, house, savings)
B. Burden of sole responsibility – must
have business sense.
C. Limited potential for growth – collateral (any
thing of value to guarantee a loan [like giving up
your personal possessions) [Let’s say you put
your home up for collateral but have to give it up]
I want medical benefits!
D. Difficult to attract qualified employees–can’t
offer fringe benefits. [Let’s say you ask for more benefits]
E. Short life span – depends on owner’s health
and competence. If the owner dies, it is over.
Partnership
-
business
operated by 2 or more people.
They are the least common with only
9% and take in only 13% of profits.
Two Forms of Partnerships
5
1. General – equal decision making & unlimited liability
among partners.
6 2. Limited – some non-active
partners join as an
investment (and thus have limited liability-just the
investment, not the property). He is a “silent” partner.
Let’s say your silent partner puts up $30,000 to insure the loan.
I gave $30,000 as a silent partner, so
I don’t have to do anything.
Two Heads
better than
One Head
Specialization – specific duties assigned to
different partners.
A. Sharing of losses. Can borrow more and can sustain
heavier losses.
B. Easy to form. Small amount of money to start & operate.
C. Shared decision making – more informed decisions.
D. Personal satisfaction – sense of accomplishment.
Disadvantages of Partnerships
A. Disagreements among partners –
conflicts delay decisions, lower employee
morale, & lessen efficiency. Each partner
is responsible for the acts of all other
partners. Must choose good partners.
B. Have to share the profits.
C. Unlimited liability – can lose their
business and personal possessions.
D. Limited life – sickness, conflicts,
or death can end the partnership.
Take That!
Copy the following questions and ……
answer them after reading the
following business scenario on the
next slide.
1. Who suffers the most? Why?
2. What is the disadvantage of having
unlimited liability in a business
Take That!
partnership?
Demonstration of “Unlimited Liability”
Harold Nodoe, Gloria Poor and Jack Rich owned the
Trio Dress Shoppe as a partnership. Under the terms of
Their partnership agreement, Nodoe and Poor were
entitled each to 40% of the profits, while the remaining
20% went to Rich. Last month the firm collapsed. After
selling off everything it owned, the company still owed
its creditors $10,000. Since Nodoe and Poor had no
assets of their own, the creditors recovered the total
amount owed to them from Jack Rich’s personal bank
account.
Harold Nodoe
Gloria Poor
Jack Rich
“If you build it, They will come.”
 Entrepreneurs are the
“risk takers” of the
American economy.
 Without these “risk
takers” many businesses
and corporations that
comprise the backbone of
this country’s financial
system would cease to
exist.
Your task is to develop a
fictional company which
specializes in one
particular product or
service and create a 810 page written/typed
Business Plan for that
business/product/servic
e and create a Group
Persuasive Presentation
(10-15 min.) using
technology.
Your task is to develop a
fictional company which
specializes in one
particular product or
service and create a 810 page written/typed
Business Plan for that
business/product/servic
e and create a Group
Persuasive Presentation
(10-15 min.) using
technology.
Four Summative (80% Category)
Components of Project
A. Rough Draft Outline
portion of this project
(individual assignment)-50
points-Summative
B. Written Business Plan
completed (Group
assignment)-100 pointsSummative
c. YOUR BUSINESS
PROPOSAL (the END
product): You and your
partner(s) will be creating a
business proposal.
D. Present your business
proposal (10-15 minutes) to
“The Sharks” (class,
teachers)-100 pointsSummative
 Make sure you look over
the rubrics for this project!
Today:
Watch an
Episode of
“Shark Tank”
(Begin with the end
In mind!)
The End
There’s a scam around every corner
Watch Out For This AFLAC Scam