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Business Organizations

Business Organizations. Bottom Line- We all Need/Want $$$. The profit motive acts as an incentive for people to produce and sell goods and services. Do you agree with this statement? Why or why not? Why do people start their own businesses?

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Business Organizations

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  1. Business Organizations

  2. Bottom Line- We all Need/Want $$$ • The profit motive acts as an incentive for people to produce and sell goods and services. • Do you agree with this statement? Why or why not? • Why do people start their own businesses? • What are some of the costs and benefits involved with the decision of starting a business? • Governments and institutions help participants in a market economy accomplish their financial goals.

  3. Entrepreneurs • People who take the risk of starting a business.

  4. Name 5 Entrepreneurs who you consider to be successful. • Come up with a list of traits that these people share.

  5. Costs, Revenue & Profitsp. 132-137 Terms to Know Break Even Point • Fixed Costs- costs incurred even when there is no activity. • Example- rent & equipment • Variable costs- costs incurred with each product produced. • Example- ingredients, labor • Total Costs= FC + VC

  6. Production Cost Simulation

  7. Cookie Recipe Break Even Point How many batches until you reach the break-even point? How many batches until you make a profit?

  8. Cookie Start Up • Complete the cookie start up worksheet.

  9. Types of Businessesp. 61-69 • Sole Proprietorship-owned and operated by one person…70% of businesses • Pros: easy to start up; few restrictions; full decision making power • Cons: full liability; Limited growth; limited life

  10. Types of Businesses • Partnership-owned by 2 or more co-owners • Pros: easy start up; few restrictions; specialization; individual taxes; more capital • Cons- greater liability; conflict with partner; temporary

  11. Types of Businesses • Corporations-raised with venture capital through share holders • Privately held vs. Publically held • Pros- Limited liability for owner; lots of capital; professional management (CEO) Long life • Cons- complex; loss of control; more government regulation; double taxation

  12. Other Types of Organization • Cooperative • Owned and operated by a group…usually the workers. • Run democratically • Franchise parent company sells the rights to open branches to private individuals • Non Profit • Does not make a profit • Exempt from taxes • Works for a social purpose

  13. Sweet Opportunities • With your group come to a decision about which business structure each of the four would-be entrepreneurs should set up. (hint: cost-benefit analysis)

  14. Basketball Game Analysis

  15. The Production Function p.127-130 Terms to Know Stages • Production Function- shows how total output changes when a single variable changes • Usually applies to hiring workers. • Stage 1- Increasing Marginal Returns- each worker hired contributesmoreto the Total Output than the one before. • Stage 2- Diminishing Marginal Returns- each worker hired contributeslessto the Total Output than the one before. • Stage 3- Negative Marginal Returns- too many workers causes total production to fall.

  16. You didn’t Build That…

  17. You Didn’t Build That…

  18. You Didn’t Build That? • What was Mitt Romney’s Response to Obama’s remark “you didn’t build that”? • What was Barak Obama’s Message? • Use economics to analyze the two views? Which one is most realistic?

  19. Responsibilities of Businesses • Hire and fire employees • Screen employees • Compensated for property • Keep intellectual property • Paying taxes • Deal honestly • Honor Contracts • Practice Equal Opportunity • Ensure public safety

  20. Ethical Responsibilities • Do businesses have a responsibility to “give something back” to the community? • Are jobs enough?

  21. Government’s Role • Create and Enforce safety standards • Protect the consumers from fraud • Prevent (or minimizes) Market Failure • Provide for the poor and powerless • Increase efficiency in the market • Defend our economic interests • Maintain fair trade • Establish a system of justice • Collect Taxes

  22. Business Plan • Get into your teams and brainstorm ideas for your business. • If you don’t already have a business get a few partners and brainstorm a list of skills that you as a group possess. Turn those ideas into possible businesses. What are the needs we have as a class? • If you already have a business: How are things going? Have you made any Jo? Make a list of suggestions for improving your business. Would an Advertisement help you? • Make a chart of pluses and minuses.

  23. Business Plan • Don’t forget to discuss the availability of resources, potential profit, special challenges, possible help you could use, and how each of the elements of business operation will be addresses. • Your goal by the end of today's class is to generate a list of possible services/businesses and ways to implement them.

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