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Essential Question

Learn about sole proprietorships, the pros and cons of operating one, and essential considerations for starting a business on your own. Understand the advantages, like easy startup and full control, as well as the disadvantages, such as unlimited liability and limited growth potential.

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Essential Question

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  1. SECTION 1 Sole Proprietorships Essential Question • Define the term “Sole-Proprietorship” and explain the three advantages and the four disadvantages of operating a sole proprietorship

  2. SECTION 1 Sole Proprietorships So you want to have a business? Questions to answer… • How hard to start? • Start up costs, production costs, Laws or business regulations (Zoning Laws) • How much control/responsibility do you want to have? • More control= more responsibility • How will you make profit (and make your profits grow?)

  3. SECTION 1 Sole Proprietorships What is a Sole Proprietorship: • A business that is owned and operated by one person (You are CEO and Janitor) • Oldest, Simplest, and common type of business organization • Usually businesses are service based and require little start up capital. EX-plumbers, carpenters, hairstylists, or florists.

  4. SECTION 1 Sole Proprietorships Advantages to a sole proprietorship: • easy to start up- don’t usually require much capital or legal considerations • full control of the business by the owner- all business decisions made without consideration for partners or shareholders • exclusive rights to profits by the owner

  5. SECTION 1 Sole Proprietorships Disadvantages to a sole proprietorship: • unlimited liability by the owner- If business goes into debt, owner must pay all debts even if this means selling off personal prop. • sole responsibility of the owner to operate the business (few day’s off/vacations) • limited growth potential for the business • lack of longevity of the firm- if owner gets sick or dies so does biz.

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