Junior and Senior level Ag Bus.
Colorado Agriscience Curriculum
Section:
Advanced Agribusiness
Unit:
Agricultural Business Records
Lesson Title:
Understanding Business Structure
Colorado Ag
Education
Standards and
Competencies
Colorado Model
Content
Standard(s):
AGB11/12.03 - The student will be able to formulate
and analyze financial records and use the
information for evaluation and planning.
Understand business structure.
English Standard 1: Students read and understand a variety of materials.
English Standard 4: Students apply thinking skills to their reading, writing, speaking,
listening, and viewing.
English Standard 5: Students read to locate, select, and make use of relevant
information from a variety of media, reference, and technological sources.
Student Learning
Objectives:
Determine the best form of business structure for your business
Factors to consider in choosing a business structure.
Identify the various forms of business structure
Learn the advantages and disadvantages of each structure
Learn about Cooperatives
Time:
2-50 minute class periods.
Resource(s):
Farm & Ranch Business Management, Deere & Company
Instructions, Tools,
Equipment, and
Supplies:
Italicized words are instructions to the teacher; normal style text is suggested
script.
You will need a scale/balance, plastic cups and sharpies to write on the cups and weights
Unit 1, Lesson 3: Understanding Business Structure
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for the cups (sand).
You will need a computer and projection unit if you are going to use the accompanying
PowerPoint.
You can use the “Compare Organizations” completed worksheet for your reference during
discussion.
Interest Approach:
Use a scale/balance of some kind and have three weights – one marked “Needs”
and two marked “Abilities”. Make sure one of the “Abilities” weights is the same
weight as the “Needs” weight. (They could be plastic cups filled with sand.) Make
sure the other “Abilities” weight is either lighter or heavier than the “Needs” weight.
Discuss how their business operation must be “in balance” with the type of business
organization they choose.
You might say, “Every ag business has a different situation and different goals. A business
structure that works for one operation may be totally wrong for another operation.”
You might want to give an example.
Leave the two balanced weights on the scale as a visual during the lesson.
You might also give each student two cups that they can write “Needs” on and then as the
lesson progresses, assign a specific type of organizational structure to each student (or
groups of students) so they can summarize their type of structure with the class and
“balance” it at the end of the lesson.
Objective 1:
The first step in determining your business structure is weighing the needs of your
operation against the abilities of each ag business organization to find the best balance.
The following five established principles are helpful in determining what organizational
structure works best for you.
1. The organization should be as simple as possible.
2. The organization should provide access to sufficient resources such as land,
labor, capital and management.
3. The organization should encourage planning for as many years as possible.
The helps reduce uncertainty.
4. The organization should increase the efficiency of land, labor, capital and
machinery resources.
5. The organization should distribute benefits fairly on the basis of contributions
to the business.
If students are writing this down, or if you are giving them a handout, make sure the key
words are in bold. At the end of this objective, have them create a silly sentence using
the key words so they can recall the material.
Unit 1, Lesson 3: Understanding Business Structure
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Objective 2:
Factors to consider in choosing a business structure.
1. Ownership - Who owns the business organization?
2. Resources - What is the ability to acquire resources such as land, labor and
capital?
3. Life - How long is the expected life of the organization?
4. Liability - What is the liability of the owners?
5. Participation – Who participates in management decisions?
6.
Compensation - What is the compensation for management?
7.
Transfer - How easy is it to transfer business ownership?
8. Taxes - What problems are there for tax planning (income and estate taxes)?
9. Estate - What problems are there for estate planning?
Using the words in bold, have a Karaoke Moment following this objective.
Students create a song or rap for an idea, fact, or process. The most popular use of
this activity involves students rewriting the words of an existing song or rap. (See
examples on next page.) This activity can be accomplished individually or in small
groups. The lyrics should emphasize key words and phrases to ensure proper
rehearsal. Here’s a way to use Karaoke Moment.
The Process:
List key points. Instruct students to list on their paper the key words and phrases from a
recent unit or lesson as you create your list on the board or overhead. Students should
check their lists with yours.
2. Create a song. Tell students that they are to rewrite the words of a song they know
using the words from their list. Note: You may want to share an example as a model.
If your students are new to the Karaoke Moment, consider providing the lyrics of a
simple song for them and allow them to work in small groups. Simple songs include:
“Twinkle, Twinkle Little Star,” “Three Blind Mice,” “Row, Row, Row Your Boat,” “Take
Me Out to the Ball Game,” “Mary Had a Little Lamb,” “The Ants Go Marching,”
“Whistle While You Work,” or other songs your students know by heart.
3. Share. After a designated amount of time, invite each group to share their new
version of the song. Note: Time varies according to the amount of content expected
in the lyrics. For songs like the ones listed above, allow 20 to 30 minutes.
Objective 3:
Agricultural Business Organizations
Before listing these, you could use a Go Get It Moment and have the students find the
definitions for these three words. Description for a Go Get It Moment is below.
1. Sole Proprietorship – A business that is controlled by one manager. A sole
Unit 1, Lesson 3: Understanding Business Structure
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proprietor owns, makes all the decisions, and does all of the planning for a
business. This is the simplest form of business organization.
2. Partnership – A business organization that is controlled by more than one person.
Two or more people are associated for the purpose of conducting a business for
profit.
3. Corporation – A business organization that is run by a board of trustees at the
discretion of the controlling stockholders. It has a separate legal identity and is
taxed apart from its shareholders.
Go Get It Moment
Sometimes students just need to get up and move. So how can we have movement
and keep the content flowing at the same time? Here’s a suggestion: students go and
get the information they need. It works like this: place sentences or paragraphs of
information in conspicuous and inconspicuous locations throughout the room.
Students retrieve the information and share it with the class or in small groups. This
strategy is particularly useful when there is a significant amount of information that
must be covered.
The Process
1. Chunk the information. Determine the portions of information you want
students to retrieve and the locations in the room. The information could be
reproduced paragraphs from the textbook or encyclopedia, primary or
secondary source documents, key sentences from stories, poems, or texts,
or key points of the lecture. These can be written on slips of paper or note
cards. Ideally, there would be one note card for each student, but most likely,
there would be 10 to 15 cards.
2. Place cards strategically throughout the classroom. Feel free to tape them
under desks, chairs, tables, on the overhead, board, or door, slip them
between books on the self, or staple them to the wall. Note: You could add
activities or questions for students to answer at each location when they
locate the information.
3. Students go and get the information. On your command (signal), all students
will stand and move throughout the room locating the cards. Students can
move independently, in pairs, or in small groups. By the way, this is a timed
event so let them know how much time is available. Those who find the
information remain standing as others return to their seats. Or if in pairs and
small groups, everyone remains standing and reads the information in unison
to the class.
Objective 4:
Advantages and Disadvantages of each Business Organization
1. Sole Proprietorship
a. Advantages – Owner makes all managerial decisions that affect the
business. Can expand or contract the size of the business, change
enterprises, etc.
b. Disadvantages – Raising capital may be difficult; Responsible for all
management decisions; Responsible for all debts; Injury or illness
Unit 1, Lesson 3: Understanding Business Structure
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could stop business.
2. Partnership
a. Advantages – Pooling capital
management can be divided.
and
know-how;
Labor
and
b. Disadvantages – Inequity of resources (one partner may have more
than the other or work harder than the other); Might acquire new
debt to expand operation; Objectives and opinions may vary (i.e.
One may want to expand more rapidly); An injury or death to one
partner has a tragic effect on the partnership; each partner is liable
for the others actions; unlimited liability may restrict credit use (could
cause delays in management decisions).
3. Corporation
a. Advantages – Economic reasons (Can pool capital or combine
special skills, abilities or ideas); Separation of ownership and
management; Ease of continuing business (the death of a
stockholder doesn’t end the business); Easily transferred ownership
(stock can easily be transferred to shareholders, etc); Opportunity for
tax savings (certain tax advantages and other fringe benefits are
deductible like insurance and profit sharing); Limited liability (liability
is limited to the stockholder’s contributions in the corporation)
b. Disadvantages – Complicated and costly to organize (more red
tape); Continuing costs to maintain corporation (because they must
operate in compliance with a corporate charter, there are more rigid
laws and more detailed records, etc); May be difficulty in obtaining
credit (More complicated borrowing procedures); May be no freedom
of action (Money in corporate account can not be spent for personal
use); Corporation can be sued (if properties are a part of the
corporation, all can be claimed in a law suit); Minority stockholder
problems (may be dissatisfied with dividends and rights); Income tax
laws are unique (the corporation pays income tax and the
shareholders may have to pay as well); Termination of a corporation
is expensive (this option should not be considered unless it is
intended to be long term).
You could use a Jeopardy-type Moment and state an advantage or disadvantage
and then ask students to state the type of business structure in the form of a question.
For example, you would say “Complicated and costly to organize” and they would say
“What is a disadvantage of a Corporation”.
Objective 5:
Understanding Cooperatives
A. Like a corporation, a cooperative is a legal entity distinct from its
members
B. Unlike a corporation, it is not organized for making a profit
C. Two major premises:
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1. Cooperatives are owned and controlled by the member-patrons
2. The profits of the cooperatives are returned to the members
based on patronage.
Kinds of Cooperatives
A. Marketing – Members pooling their saleable products and purchase needs in
an effort to obtain increased market power.
1. Marketing Examples: Storage of commodity, such as grain in
elevators
B. Purchasing – Members pooling their saleable products and purchase needs
in an effort to obtain increased market power.
1. Operating inputs such as feed, fuel, fertilizer, etc.
C. Service – Group efforts to improve the level of services received by
members.
1. Electricity through rural electric cooperatives
D. Processing – Organized to provide processing and packaging alternatives for
members.
1. Assembly, processing, and packaging of Ag products
E. Credit – Acquire funds and provide them to members on a cost basis.
1. Farm Credit, Production Credit Association, Federal Land Bank and
Bank of Cooperatives
Use a Crayon Moment to teach/reinforce this objective.
1. Elements. Identify the key elements of the information students are to learn.
For example: parts of speech, independent and dependent clauses, parts of
a cell, stages of mitosis, steps in a mathematical equation or chemistry
formula, a progression of events in social science.
2. Teach. Teach the information using whatever strategy you deem most
effective—lecture, video, jigsaw groups, guided peer teaching, Socratic
seminar.
3. Choose. After students have taken notes or read the text, each student
chooses colors that he or she feels best represents each element.
4. Apply. Students color the key elements using colored pencils or highlighters.
Note: You could pre-select the colors, especially if this is the first time
students are requested to use Crayon Moment. However, when students
choose the colors they are more personally connected to the information.
5. Share. Students share with a partner or trio what they colored and the
connection between the color they chose and each element.
Review/Summary:
Give students a blank chart and let them fill in the categories during discussion or
from their notes following the lesson or provide the chart already completed. Both
a blank and completed chart is included in this lesson.
Unit 1, Lesson 3: Understanding Business Structure
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Application-Extended
Classroom Activity:
Students could interview someone in one of the four business structures
discussed and/or research a company who fits one of the four structures.
Application--FFA
Activity:
Your chapter may already have a corporation or cooperative in place. If so, make
sure the discussion ties to this. Or discuss the possibility of starting a corporation
or cooperative. Have a guest speaker from any one of the above-mentioned
entities at an FFA or Young Farmer meeting.
Application--SAE
Activity:
Your chapter may have a corporation and/or cooperative in place for members to
developed an SAE. If not, ask the class if they would like to start one. Besides
helping students acquire SAE’s, it would be an excellent teaching and learning
tool.
Students could take a field trip to businesses that would be willing to share their structure
and show the students the advantages or disadvantages of each. Examples would be
Farm Credit, your local Cooperative, or any other business that would be willing.
Start a credit cooperative to loan money for SAE’s.
Evaluation:
The review/summary worksheet could be used as a quiz sheet with some or all of the boxes
left blank for the students to complete.
Evaluation Answer
Key:
See “Compare Organizations” chart.
Other:
You may want to have a guest speaker on each of the four business structures
and spread this lesson out over four class periods (2 blocks).
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