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Unit Overview

INTRODUCE THE UNITUnit 11 describes entrepreneurship and the fi nancial planning required in entrepreneurship. Chapter 33 introduces students to the process of starting and managing a business. Chapter 34 then discusses the economic, natural, and human risks inherent in business ownership. Chapter 35 discusses how potential business owners create a business plan to give an overall picture of a proposed business to potential investors and lenders. Chapter 36 shows students how to identify capital needs for a business and develop a fi nancial plan that will meet those needs.

BUILD BACKGROUNDAsk students why entrepreneurship is an important part of the U.S. economy. Entrepreneurship is important to the U.S. economy because it affects change in the marketplace and provides jobs for about 55 percent of the labor force.

Ask students to list at least three qualities that are needed by an en-trepreneur. In a two-page essay, have students explain these qualities and suggest ways to cultivate these quali-ties. Ask students to keep and review this document as they study Unit 11.

Have students share their fi rst impres-sions of the ad on this page. Inform students that the children of entrepre-neurs are likely to become entrepreneurs themselves. Ask students to create a list of reasons this is the case. Have the class compare and combine their lists. Save and revisit the combined list at the end of the unit.

A N A LY Z E T H E A D

Small Business Ownership in America

Have students research the role of small business ownership in American society since the 1700s. What role did small business play in the society of the late 1990s? What role will it prob-ably play in the 21st century? How is small business ownership refl ective of current economic and sociological trends in our society? Have students write their fi ndings in a one-page report.

Assessment Guidelines Prepare a rubric for evaluation that includes thoroughness of the reports presented by students. Students should consider the differences between small busi-nesses of today and those of the 1700s, and how their economic and sociological impact has changed as society has evolved.

Enrichment Assign and review Unit 11 activities in the Competitive Events Workbook.

In this unit you will find

• Chapter 33 Entrepreneurial Concepts

• Chapter 34 Risk Management

• Chapter 35 Developing a Business Plan

• Chapter 36 Financing the Business

An entrepreneur can start a business, be an independent sales person, or open a franchise business. What type of business might this entrepreneur run? Why do you think AT&T® is advertising to entrepreneurs? What is this ad selling?

A N A LY Z E T H E A D

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11Unit ObjectivesAfter completing this unit, students should be able to: • Identify the risks, rewards, advantages, and disadvantages of entrepreneurship• Identify the different forms of business ownership• Explain the types of business risks and different methods used to handle them• Identify the three major sections of a business plan• Develop a business plan with appropriate documentation• Prepare fi nancial statements used by entrepreneurs to report income and

analyze a business’s fi nancial status

OUT OF TIME?If you cannot cover all unit chapters, go to Unit 11 in your Fast File Teacher Resources booklet and fi nd the Chapter Summaries for Chapters 33, 34, 35, and 36.

KEY TO LEVELED LEARNING ACTIVITIESL1 Strategies should be within the ability range of all

students. Often full class participation is required.L2 Strategies are for average to above-average students

or for small groups. Some teacher direction is necessary.

L3 Strategies are designed for students able and willing to work independently. Minimal teacher direction is necessary.

KEY TO RESOURCE ICONS Print Material

CD or DVD

Online Learning Center through glencoe.com

KEY TO LETTER ICONS

Reading Strategy activities help you teach reading skills and vocabulary.

Critical Thinking strategies help students apply and extend what they have learned.

Skill Practice strategies help students practice historical analysis and geographical skills.

Writing Support activities provide writing opportunities to help students comprehend the text.

Develop Concepts activities use various strategies to help teachers gauge and plan for students’ concept development.

Universal Access activities provide differentiated instruction for English language learners, and suggestions for teaching various types of learners.

No Child Left Behind activities help students practice and improve their abilities in academic subjects.

RR

CC

SS

WW

DD

UU

NCLB

NCLB

• Chapter 33 EntrepreneurialConcepts

• Chapter 34 Risk Management

• Chapter 35 Developing a Business Plan

• Chapter 36 Financing the Business

http://www.glencoe.com

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Chapter 33 From Unit 11 Fast File BookletLesson PlansChapter SummariesReproducible MastersReproducible Tests

Print AncillariesStudent Activity Workbook, Chapter 33Marketing Math Workbook, Chapter 33BusinessWeek Reader with Case Studies, Chapter 33Competitive Events Workbook, Unit 11Marketing Research Project WorkbookSchool-to-Career Activity Workbook

Interactive Chalkboard classroom presentations, Chapter 33 Online Learning Center through glencoe.com Enrichment Resources at the Online Learning Center through glencoe.com Online Student Edition, Chapter 33

TeacherWorksTM Plus ExamView® Assessment Suite, Chapter 33 Virtual Business





CHAPTER PRINT MATERIALS TECHNOLOGY RESOURCES

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Chapter 36Risk Management

Chapter 35Developing aBusiness Plan

Chapter 33EntrepreneurialConcepts

CHAPTER SECTION PERFORMANCE INDICATOR

33.1 Explain the concept of private enterprise

Identify speculative business risks

Identify desirable personality traits important to business

33.2 Explain employment opportunities in business

Explain the types of business ownership

Explain legal issues affecting business

34.1 Explain the nature of risk management

34.2 Explain routine security precautions

Develop business plan

35.1 Explain methods/processes for organizing workflow

Explain the nature of marketing plans

35.2 Determine financing needed to start a business

Explain the nature of marketing plans

Determine financing needed for business operations

Determine sources of financial assistance

36.1 Explain the nature of business plans

Interpret financial statements

36.2 Explain the concept of accounting

Explain the nature of balance sheets

Describe the nature of cash-flow statements

Chapter 34Risk Management

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716 UNIT 11 — ENTREPRENEURSHIP AND FINANCE

C H A P T E R 34

Chapter Objectives

After reading this chapter, you should be

able to:

• Explain the nature and scope of risk

management

• Identify the various types of business risks

• Explain effective security and safety

precautions, policies, and procedures

• Describe the various ways businesses can

manage risk

• Explain the concept of insurance

Market Talk Risk is part of doing business,

and managing risk must be part of every

business owner’s planning process. Learning

to prevent those risks that can be avoided and

to minimize those that are beyond your control

is what risk management is all about. Even in

the case of hurricanes or tornadoes, there are

ways of ensuring that after such a storm, your

business can rebuild and continue.

Quick Think What kinds of risks should

businesses prepare for?

Risk Management

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C H A P T E R 33

Chapter Objectives


able to:

• Defi ne entrepreneurship

• Detail the advantages of entrepreneurship

• Explain the risks and disadvantages of

entrepreneurship

• List the characteristics and skills of

entrepreneurs

• Understand the importance of small

business in the U.S. and global

economies

• Identify the forms of business

ownership

• Name the legal steps to take in

establishing a business

Market Talk A car wash for charity is

an example of entrepreneurship and free

enterprise principles. Who will purchase the

supplies? How much will they cost? Who

will perform the labor? These are questions

to answer before setting up the car wash.

Business owners ask similar questions.

Quick Think Name two other questions

entrepreneurs must answer before starting

a new business.

Entrepreneurial

Concepts

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C H A P T E R 35

Chapter Objectives


able to:

• Explain the purpose and importance of a

business plan

• Identify external planning considerations

• Develop a business’s organization plan

• Construct a marketing plan

• Identify the fi nancial elements of a

business plan

• Describe fi nancing sources for

businesses

Market Talk By the time a business opens

its doors, it should have a business plan and

a marketing plan in place. While the marketing

plan outlines market analysis and marketing

strategies, the business plan defi nes the larger

picture and includes a mission statement and

a detailed fi nancial plan for all functions of

the business. Entrepreneurs must look at all

available sources of funding and opportunities

to raise capital.

Quick Think Why must a small business

entrepreneur make creative funding decisions

when planning a new business or expanding an

existing one?

Developing a

Business Plan

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C H A P T E R 36

Chapter Objectives


able to:

• Explain the purpose of fi nancial documents

• Develop a personal fi nancial statement

• Determine start-up costs for a business

• Estimate business income and expenses

• Prepare an income statement

• Create a balance sheet

• Interpret a cash fl ow statement

Market Talk Starting a business requires

more than a good idea and a good market

analysis. Seed money is necessary for that

idea to grow. That money, the capital, often

has to be borrowed from commercial bankers,

investors, and other lenders. To convince the

lenders to lend you money, you need a good

fi nancial plan.

Quick Think What do you think it takes to

convince a lender to provide capital?

Financing the

Business

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CHAPTER SECTION PERFORMANCE INDICATOR

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Key Termsand Concepts

BuildAcademic

Skills

Develop Critical

ThinkingApply

Concepts

BuildReal-World

SkillsNet

SavvyMarketingInternship

Academic Skills

Review Facts and

Ideas

Check the latest national and state standards at the Marketing Essentials OLC through glencoe.com.

SECTION ASSESSMENT CHAPTER ASSESSMENT

1, 2

✓ 14

✓ ✓ ✓ ✓ ✓

3 14 ✓ ✓ ✓

✓

5 14 ✓ ✓ ✓

1 7 14 ✓ ✓ ✓

6, 9 14 ✓ ✓ ✓

2, 3 ✓

9

15 ✓

✓ 2 14

✓ ✓ ✓ ✓

1, 2, 3 ✓ 4, 5, 8 14 ✓ ✓ ✓ ✓ ✓

2

14 ✓ ✓

✓

14

✓ ✓ ✓ ✓

1, 2 ✓

15 ✓ ✓ ✓ ✓

3 8 15 ✓ ✓ ✓ ✓

1, 2, 3 14, 15 ✓ ✓ ✓ ✓ ✓

1 ✓

8 15 ✓ ✓

✓ ✓

1, 3 ✓

8 15 ✓ ✓ ✓ ✓

3

✓ 2 15

✓ ✓ ✓ ✓

1, 2

5, 6, 10 14, 15 ✓ ✓ ✓ ✓

1, 2, 3 ✓ 3, 4 14 ✓ ✓ ✓ ✓

3 ✓

7 14 ✓ ✓ ✓

6 14 ✓ ✓ ✓

SECTION ASSESSMENT CHAPTER ASSESSMENT UNIT PROJECT


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Marketing Internship Tell students that as part of this unit, they will participate in a hands-on marketing internship simula-tion at the close of the unit. As they study each chapter in the unit, they can prepare for the project by doing the research listed on the checklist. They will conduct research using a variety of resources and apply academic, basic, and technology skills. Upon comple-tion of each unit project, students will have a tangible example of their work to add to a real-world career portfolio.

Marketing Internship Tell students that as part of this unit, they will participate in a hands-on marketing internship simula-tion at the close of the unit. As they study each chapter in the unit, they can prepare for the project by doing the research listed on the checklist. They will conduct research using a variety of resources and apply academic, basic, and technology skills. Upon comple-tion of each unit project, students will have a tangible example of their work to add to a real-world career portfolio.

RELATE THE UNIT TO THE MARKETING PLANThe four Ps of the marketing mix include product, place, pricing, and promotion. Unit 11 focuses on small business and touches on its use of the marketing mix.

MARKETING PLAN OVERVIEWLet students know that an effective marketing plan will help increase an entrepreneur’s odds of succeeding in the marketplace.

Marketing Core Functions Point out to students that Chapters 33, 34, 35, and 36 will deal with the market-ing core function Market Planning.

Market Planning involves under-standing the concepts and strategies used to develop and target specifi c marketing strategies to a select audience. This function requires an in-depth knowledge of activities that involve determining informational needs, designing data-collection processes, conducting the collection of data, analyzing data, presenting data, and using that data for creat-ing a marketing plan.

For WebQuest teaching suggestions and rubrics, go to the Teacher Center of this book’s Online Learning Center (OLC) through glencoe.com.

glencoe.com

2

4

5

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IMPLEMENTATION Organization

Management

Staffing

BUDGET Cost of Sales

Cost of Promotion

Income and Expenses

CONTROLEvaluation

Performance Measures

Performance Analysis

ANALYSISSWOTEconomicSocio-CulturalTechnologicalCompetitive

STRATEGY PromotionPlacePriceProduct

In this unit

Marketing Core Functions Market Planning

AT&T offers specialized services to large and small businesses.

PRINT AD IMAGE

Log on to glencoe.com and go to the Marketing Essentials Online Learning Center (OLC). Find the WebQuest for

Unit 11. Begin the activity by researching online the kinds of basic services a small business might need in order to operate.

Marketing Internship A cycling enthusiast wants to open a cycling shop and needs a business plan.As you read, use this checklist to prepare for the unit project:✓ List various bicycles and related accessories offered in

shops.✓ Find Web sites for bicycle shops and products.✓ Look for local shops that sell bicycle products.

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INTRODUCE THE CHAPTERThis chapter introduces entrepreneurship and its advantages and disadvantages. The chapter also lists the personal char-acteristics needed to become a success-ful entrepreneur. The legal steps taken in establishing a business are also explored in Chapter 33.

BUILD BACKGROUNDAsk students if they or someone they know has any experience being self-employed. Give some examples, such as providing childcare, developing Web sites, mowing lawns, or cleaning pools. Ask them what the rewards and drawbacks of working for themselves were. Tell students that by working for themselves, they were acting in an entrepreneurial manner.

33

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Market Talk Lead a discussion about the type of small business featured in this photograph. Then have students discuss high-profi le entrepreneurs that started out tackling small-scale business ventures.

Quick Think Students should recognize how need in the marketplace can defi ne the types of entrepreneurships developed.

Ask students to name two businesses

that are entrepreneurships. Then ask students to discuss whether they would be interested in running such a business.

REVIEW THE OBJECTIVESDefi ne entrepreneurship. the process of starting and operating your own businessDetail the advantages of entrepre-neurship. personal freedom, personal satisfaction, increased self-esteem, and increased income

Explain the risks and disadvantages of entrepre-neurship. The disadvantages of entrepreneurship include a high level of stress, possible setbacks, the risk of failure, potential loss of income, long and irregular hours, the need to handle multiple tasks, and the required strong self-discipline.List the characteristics and skills of entrepreneurs. determination, self-motivation, self-confi dence, strong organizational skills, leadership ability, self-discipline, creativity, willingness to work hard, spirit of adventure, and good social skillsUnderstand the importance of small business in the U.S. and global economies. Small businesses

generate growth at a rate that is much faster than other larger and more established businesses. Eighty percent of the new jobs created annually come from businesses that are less than fi ve years old.Identify the forms of business ownership. pur-chase an existing non-franchise business; take over the family business; start a new business; or purchase a franchise businessName the legal steps to take in establishing a business. fi nd help; register the business; and obtain licenses


C H A P T E R 33

Chapter ObjectivesAfter reading this chapter, you should be able to:

• Defi ne entrepreneurship

• Detail the advantages of entrepreneurship

• Explain the risks and disadvantages of entrepreneurship

• List the characteristics and skills of entrepreneurs

• Understand the importance of small business in the U.S. and global economies

• Identify the forms of business ownership

• Name the legal steps to take inestablishing a business

Market Talk A car wash for charity is

an example of entrepreneurship and free

enterprise principles. Who will purchase the

supplies? How much will they cost? Who

will perform the labor? These are questions

to answer before setting up the car wash.

Business owners ask similar questions.

Quick Think Name two other questions

entrepreneurs must answer before starting

a new business.

Entrepreneurial Concepts

EXPLORE THE PHOTO

Yellow Dog Productions/Getty Images

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For the Teacher TeacherWorks™ Plus

Teacher Resources at glencoe.com

Interactive Chalkboard ExamView® Assessment Suite Fast File Unit 11

For the StudentMarketing Essentials Online Edition

Student Activity Workbook Marketing Math Workbook Marketing Research Project Workbook School-to-Career Activity Workbook Competitive Events Workbook BusinessWeek Reader with Case Studies

Interactive Student EditionStudent Resources at glencoe.com

33

Discuss the performance indicators for the

DECA events listed, so that students understand

how to demonstrate their understanding.

The event acronyms stand for:

AAM: Apparel and Accessories Marketing

Series

ADC: Advertising Campaign Event

ASM: Automotive Services Marketing

Series

BSM: Business Services Marketing Series

EMDM: E-Commerce Management Team

Decision Making Event

FMAL: Food Marketing Series, AL

FMDM: Financial Analysis Management

Team Decision Making Event

FMML: Food Marketing Series, ML

FSRM: Full Service Restaurant Manage-

ment Series

HMDM: Hospitality Services Management

Team Decision Making Event

HRR: Hospitality and Recreation Market-

ing Research Event

MMS: Marketing Management Series

QSRM: Quick Serve Restaurant Manage-

ment Series

RFSM: Restaurant and Food Service

Management Series

RMS: Retail Merchandising Series

SEM: Sports and Entertainment Marketing

Series

SMDM: Sports and Entertainment Marketing

Management Team Decision Making

Event

TMDM: Travel and Tourism Marketing

Management Team Decision Making

Event

TSE: Technical Sales Event

Find timed DECA Prep activities correlated to the Competitive Events Workbook for students and DECA tips for teachers at the Marketing Essentials OLC through glencoe.com.

Chapter 33 — Entrepreneurial Concepts 697

ROLE PLAY Check your understanding of DECA performance indicators with the DECA activity in this chapter’s review. For more information and DECA Prep practice, go to the Marketing Essentials OLC through glencoe.com.

glencoe.com

DECA Events These acronyms represent DECA com-petitive events that involve concepts in this chapter:AAMACTADCASMBLMDM

BMDMBSMEMDMFMALFMDM

FMMLHLMHMDMMMSQSRM

RFSMRMSSEMSMDMTMDM

Performance Indicators The performance indicators represent key skills and knowledge. Relating them to the concepts explained in this chapter is your key to success in DECA competitive events. Keep this in mind as you read, and write notes when you fi nd mate-rial that helps you master a key skill. In these DECA competitive events, you should follow these perfor-mance indicators:• Determine the relationship between government and

business• Explain the concept of private enterprise• Determine factors affecting business risk• Explain the role of business in society• Describe current business trends• Describe legal issues affecting business• Describe the nature of legally binding contracts• Explain the types of business ownershipSome events include these performance indicators:

EMDM Describe legal considerations in e-commerceFMML Discuss the role of government agencies in the food marketing industryHLM/HMDM Explain the nature of regulations affecting the hospitality industryQSRM/RFSM Explain the nature of restaurant health and sanitation lawsSEM/SMDM Describe legal issues affecting the marketing of sport/event productsTMDM Explain the nature of regulations affecting the travel and tourism industry

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SECTION 33.1

BELLRINGER ACTIVITY

Give students fi ve minutes to write a list of what they would consider to be the advantages and the disad-vantages of entrepreneurship.Examples might include: advan-tages—personal freedom, increased income, personal satisfaction, own work schedule; disadvantages—high stress, potential loss of income, high risk.

Preteaching

VOCABULARYKEY TERMS Read the key terms aloud, or ask a volunteer to read them. Ask students to predict the meanings of the words.ACADEMIC VOCABULARY Refer students to the OLC through glencoe.com for the Academic Vocabulary Glossary before they read the section.

GRAPHIC ORGANIZERModel using the graphic organizer for students. Tell students to go to the OLC through glencoe.com for a printable graphic organizer.

NCLB

NCLB connects academic correlations to book content.

READING GUIDE

Ask students to identify the personal attributes needed for a successful entrepreneur. Answers might include:

they are self motivated, creative, and work hard; they have good social skills, etc.

D Develop Concepts

THE MAIN IDEAAsk students to defi ne risks and personal freedoms. Discuss their defi nitions.

Model for students how they can compare their own personal attributes

to those of a successful entrepreneur.

BEFORE YOU READ

Entrepreneurship

Advantages Disadvantages EconomicImportance

1.2.

1.2.

1.2.


THE MAIN IDEAEntrepreneurship has many advantages, including personal freedom and financial reward. It also has disadvantages, such as accepting risk.

GRAPHIC ORGANIZERDraw this chart to list the characteristics of entrepreneurship.

OBJECT IVES• Define entrepreneurship

• Detail the advantages of

entrepreneurship

• Explain the risks of

entrepreneurship

• List the characteristics and skills ofentrepreneurs

• Understand the importance of small business in various economies

KEY TERMS• entrepreneurship

• entrepreneurs

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• indicate

• domestic

Go to the OLC through glencoe.com for printable graphic organizers, Academic Vocabulary definitions, and more.

READING GUIDE

Relate Do you know any successful entrepreneurs? List the reasons for their success.

SECTION 33.1

BEFORE YOU READ

Entrepreneurship

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

English Language ArtsNCTE 3 Apply strategies to interpret texts.

What Is Entrepreneurship? Entrepreneurship is the process of starting and operat-

ing your own business. Entrepreneurs are people who create, launch, organize, and manage a new business and take the risk of business ownership. You are an entrepreneur already if you have provided babysitting services or cut someone’s lawn for pay.

Entrepreneurs make major contributions to our economy by providing jobs for their employees. Entrepreneurs often have

Connect Compare

the characteristics of

an entrepreneur to

your own personality.

Would you make a good

entrepreneur?

D

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SECTION 33.1

Discussion Starter

WHAT IS ENTREPRENEURSHIP?Many people have strong altruistic motives for becoming entrepreneurs. Have students discuss why altruism plays a part in some people’s desire to become entrepreneurs. Some people feel they are investing in the local community by contributing to the local labor force.

Make Comparisons Begin discussion about the entrepreneurs featured on the page. Ask: In what ways are they alike? Answers may include they started their own business out of original ideas.

D Develop ConceptsAdvantages of Entrepreneurship

As a class, discuss the advantages to entrepreneurship. Have students develop a list of advantages and write them on the board.Answers will include: personal freedom, personal satisfaction, increased self-esteem and income, etc.

To expand the discussion, as a class, link the personal attributes discussed in the Before You Read section with the advan-tages listed.

Explain Bring examples of national and international entrepreneurs to class. Explain the advantages and personal attributes that contributed to each entrepreneur.

Clarify Remind students of the limitations of entrepreneurship. Without fi nancial backing, small businesses can suffer from cash fl ow restrictions.

E-Training Anyone?

Discussion After students have read Net Marketing, lead a discussion about the uses of e-training. Examples might include: for full-time employees who want to study outside normal business hours, for long-distance learning, etc.

Answer: By offering online training, eResearch Technology, Inc., creates another reason for consumers to use and purchase their products.

For instructions, ideas, and answer guide, go to the Teacher Center at the Marketing Essentials OLC through glencoe.com.

Ask students to fi nd the eResearch Technology Web site and note what else is offered on the site. Have them report their fi ndings to the class.

Chapter 33 — Entrepreneurial Concepts 699glencoe.com

an idea, or business concept, that drives their business. When an entrepreneur combines this vision with the means to manufacture the product (or provide the service) and market it, the contributions to the economy both within and outside the United States can be remarkable. The results of entrepreneurship can change our lives in other ways, too. Con-sider the following examples:

• Henry Ford introduced the mass production of automobiles, making them affordable to the average person. His entrepreneurship revolutionized transportation and transformed lifestyles.

• William Hewlett and David Packard started a small business in Packard’s garage near Stanford University in California. They invented the three-and-a-half-inch floppy disk and the first pocket calculator. Their business grew into the giant Hewlett-Packard Corporation, which produces a vast array of computer products, including

laser printers. These products changed the speed with which people process information.

These entrepreneurs became famous and wealthy as a result of starting their own busi-nesses, but not all entrepreneurs achieve such success. Some start companies simply because they want to be their own bosses and make their own business decisions.

Advantages of Entrepreneurship The advantages of entrepreneurship can

include personal freedom, personal satisfac-tion, increased self-esteem, and increased income. Entrepreneurs set their own work schedules and make their own decisions.They are able to try out their own new ideas and direct their energies into business activities, take control of their businesses and their work settings.

Many business owners are willing to put in the extra effort to make their businesses succeed because of financial rewards. With

If eResearch Technology, Inc., sells prod-ucts and services, why does it bother with online training?

Go to the Marketing Essentials OLC through glencoe.com to find an activity about the Internet and entrepreneurship.

E-Training Anyone?

What do you need to do to earn second place on the Fortune Small Business 100 list? You need to be very good at providing technology-based products and services to pharmaceutical, biotechnological, medical device, and contract resource companies. eResearch Technology, Inc., sells centralized electrocardiographic (diagnostic) services as well as technology and ser-vices to streamline the clinical trial process.

Online Training for CustomersThe company’s Web site takes full advan-tage of the power of the Internet and Web marketing. One of its key e-commerce features is Web-based training through its eResearch Community’s eHealth Education. This service lets customers access a series of sophisticated, interactive, Web-based training programs to learn clinical research processes and procedures.

D

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SECTION 33.1

CONTINUED

R Reading StrategyPreview the following words by reading them in context in the Case Study:

• prestigious celebrated• lavish extravagant• loyalty faithfulness

Discuss the meanings of these words with students.

Online ActivityOnline EntrepreneurshipAsk the students to use the Internet to research an online entrepreneurship. Ask them to bring their fi ndings to class to illustrate the wide range of online businesses.

Ask students to think of two other scenarios in which a company might give away samples as gifts with a purchase.

Entrepreneur in the Kitchen

Discussion Have students read the Case Study and discuss the pros (such as possibility of success, chance to develop her own product and try her own ideas) and cons (long hours, unknown business identity, risk) Estee Lauder faced when beginning her entrepreneurship.

Answer: By giving away sample products as gifts, Lauder builds great customer loyalty. Answers might include: creativity, daring, good social skills.


glencoe.com700 UNIT 11 — ENTREPRENEURSHIP AND FINANCE

success often comes money, and this potential motivates many entrepreneurs.

Disadvantages of Entrepreneurship

Being an entrepreneur has disadvantages, too. These include a high level of stress, pos-sible setbacks, the risk of failure, potential loss of income, long and irregular hours, the need to handle multiple tasks, and the required strong self-discipline.

Most new businesses have a restricted cash flow because of start-up costs. As a result, an entrepreneur may not meet his or her personal financial needs during the first year of operation, or even longer. Increased income comes only when the busi-ness succeeds.

Entrepreneurs are not 40-hours-per-week people. To succeed, they must meet the needs of the marketplace, which often means long and irregular hours.

Entrepreneur in the Kitchen

Housewife Estee Lauder began her cosmetics business in the 1930s, mixing up face creams in her New York kitchen and going into beauty salons to offer free demonstrations to women sitting under hair dryers. Her creams were high quality, and people who tried them usually bought them.

In 1948, Lauder persuaded a buyer at the prestigious retailer Saks Fifth Avenue to order her product. That first order sold out in two days.

Product Line Diversification

Over the years, Lauder developed a full line of cosmetics underher own name and sold it selectively through high-end departmentstores around the world. Her company also developed the Clinique, Aramis, Prescriptives, and Origins lines—each targeted to a slightly different market.

A Marketing Genius

Estee Lauder originated the “gift with purchase” concept, which has become very important in cosmetics sales. If a customer purchases one item, he or she receives a gift package containing many other items worth more than the amount spent. It is a creative way of developing customer loyalty. Lauder was the only woman in Time magazine’s listing of the 20 most influential business geniuses of the twentieth century.

How could it make sense to give away products worth more money than the item purchased? What qualities of an entrepreneur does that idea display?

Go to the Marketing Essentials OLC through glencoe.com to find an activity about entrepreneurship.

Time Life Pictures/Getty Images

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CONTINUED

SECTION 33.1

CONTINUED

S Skill PracticeIndependent PracticeEntrepreneurship as

a Career Choice

L1 Have students choose a specifi c type of entrepreneurship, such as opening a Web design company. Tell them to list both the specifi c skills and general attri-butes needed to succeed in this business.

L2 On a three-column chart, have stu-dents compare three entrepreneurs using these categories: specifi c skills, general attributes, and challenges conquered. L3 Ask students to research a famous entrepreneur. In a two-page expository essay, have them explain the steps their entrepreneur took to build his or her business, the entrepreneur’s personal attributes, and their specifi c skills.

U Universal AccessInterpersonal and Intrapersonal

Learners Divide students into groups and ask each group what kind of business it could open by pooling its members’ skills. Try to see that the groups are balanced, containing both outgoing, interpersonal learners and refl ective, intrapersonal learners.

D Develop ConceptsMarketing and Entrepreneurship

Advertising in print media plays a key role in marketing. To illustrate the effect of printing schedules on advertising, col-lect three magazines based on the same topic, such as gardening. The magazines should be published at different intervals, such as monthly, quarterly, and yearly. Ask students to identify the format, content, and number of ads contained in each magazine. Have students discuss how a magazine’s printing schedule might affect the types or numbers of advertisements that are placed in the magazine.

Extended ActivityBusiness GrowthHave students consider why small businesses can often generate growth at such a fast rate. Then ask students to research such a business and describe that business in a two-paragraph summary. Have students then give reasons that business was able to generate such growth in a one-paragraph response.

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Running a business requires doing many tedious, time-consuming tasks. To save money, new business owners may do many of these jobs themselves. Among the tasks they may perform are time-consuming paperwork, such as accounts payable, accounts receivable, pay-roll, and government forms.

The Risks of EntrepreneurshipStarting a new business requires a major

commitment of time, money, and effort. A new business owner must be a risk taker. It is often necessary to quit a job, work long hours, invest savings, and borrow money—all with no guarantee that the new business will suc-ceed. Seven out of ten small-business own-ers started their businesses with less than $20,000, according to the 1998 report The Wells Fargo/National Federation of Independent Business Series on Business Starts and Stops. In fact, in 2002, 14 percent of Inc. magazine’s 500 fast-growing companies started with less than $1,000.

The risk of failure with a new business is very real. Only two-thirds of new businesses survive at least two years, and about half sur-vive at least four years. When a company fails, often much of the money invested in it is lost. Failure also means loss of employment.

Entrepreneurship as a Career Choice

Being an entrepreneur can be exciting and greatly rewarding, but it is not for everyone.Those who succeed have certain skills and per-sonal characteristics that enable them to meet the challenges of business ownership.

First, entrepreneurs must have the skills nec-essary to run their business. Someone starting an online magazine should know how to write and have a good grasp of Internet technology. Beyond specific skills, most successful entre-preneurs share a number of characteristics.

Characteristics of Successful Entrepreneurs • Determination • Self-motivation • Self-confidence

• Strong organizational skills • Leadership ability • Self-discipline • Creativity • Willingness to work hard • Spirit of adventure • Good social skills

Do You Have What It Takes? You can answer this question by doing a

self-evaluation—an assessment of your per-sonal qualities, abilities, interests, and skills. The self-evaluation in Figure 33.1 on page 702 was developed by the Small Business Administration (SBA). Take a few minutes to answer each question and write your answers on a piece of paper. Think before you answer and be honest. Answering “yes” to most or all of these questions suggests that you may have the right characteristics for success.

Before you start a business, ask family mem-bers, friends, and other businesspeople who are in the same or a similar business about their experiences. Do research on the type of business you want to start. All this informa-tion should give you a good indication of whether you are ready to join the millions of small-business owners in the United States.

Marketing and Entrepreneurship Although entrepreneurs may have the

business and technical skills they need to pro-duce and provide a quality product or service, they may overlook the importance of market-ing. Entrepreneurs who possess a good under-standing of marketing have an advantage over those who do not.

Many resources exist for entrepreneurs who need help with marketing. For example, The American Marketing Association has a special interest group devoted to helping entrepre-neurs develop marketing skills, the Marketing & Entrepreneur Special Interest Group. The National Federation of Independent Busi-nesses has an award-winning online library of business management information called the Business Toolkit.

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SECTION 33.1

CONCEPTSHave students list the advantages and disadvantages of entrepreneurship.Advantages: personal freedom and satisfaction, increased self-esteem and income; disadvantages: high stress, risk of failure, setbacks, loss of income

KEY TERMSHave students work in small groups to review key terms, their spellings and defi nitions.

INDEPENDENT REVIEWL1 Assign and review Chapter 33activities in the Student Activity Workbook.

L2 Assign and review Chapter 33 activities in the Marketing Math Workbook.

L3 Assign and review Chapter 33 activities in the BusinessWeek Reader with Case Studies.

AFTER YOU READHave students complete the Section 33.1 After You Read section review.

ONLINE STUDY TOOLSHave students to the Marketing Essentials OLC through glencoe.com for the Section 33.1 practice test.

33.1

Have students choose the question that most interests them and discuss their responses in class.

Self-Evaluation

Discussion Discuss the personality characteristics and physical, emotional, and fi nancial factors to take into account before beginning a small business. Ask students: Do any surprise you? Which seem most important? Discuss their answers.

Caption Answer Students should identify any strengths or weaknesses that might affect their decision to run a small business.


The first eight questions relate to your personality characteristics. YES NO1. Do you like to make your own decisions?2. Do you enjoy competition?3. Do you have willpower and self-determination?4. Do you plan ahead?5. Do you like to get things done on time?6. Can you take advice from others?7. Can8. Are you comfortable talking to people you do not know or have just met?

you adapt to changing conditions?

The next series of questions relates to your physical, emotional,and financial well-being.

9. Do you understand that owning your own business may entail working12 to 16 hours a day, probably six days a week and maybe on holidays?

10.10. Do you have the physical stamina to handle a business?11. Do you have the emotional strength to withstand the strain?12. Are you prepared to lower your living standard for several

months or years?13. Are you prepared to lose your savings?14. Do you know which skills and areas of expertise are critical to the success

of your business?15. Do you have these skills?16. Does your idea for a business use these skills?17. Can you find the people who have the expertise you lack?18. Do you know why you are considering this business?19. Will your business meet your career aspirations?


The Role of Entrepreneurship in the Domestic and Global Economy

Entrepreneurs and small to medium busi-nesses play a key role in the domestic and the global economy: They generate growth at a rate that is much faster than other larger and more established businesses. Eighty percent of the new jobs created annually come from businesses that are less than five years old.

The National Federation of Independent Businesses reported in its 2000 Small Business Policy Guide that more than 60 percent of all businesses in the United States employ four or fewer people. The Global Entrepreneur-ship Monitor (GEM) reports a strong correla-tion between national economic growth and the level of national entrepreneurial activ-ity. Firms with fewer than 500 employees were responsible for 50 percent of the gross domestic product (GDP)—the measure of the

33.1 Self-Evaluation

Go to the Marketing Essentials OLC through glencoe.com to find a project on self-evaluation.

• Know Yourself A clear understanding of your strengths and skills will help you decide whether to pursue

entre preneurship.

What do your answers say about you?

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CULMINATING ACTIVITY

Have students complete the following statements:

• Smart entrepreneurs are always look-ing for _____ . business opportunities and trends that affect their business.

• Entrepreneurs are people who _____ . create, launch, organize, and manage a new business and take the risk of business ownership.

SECTION 33.1

NCLB

NCLB Activity correlated to Mathematics and English Language Arts Standards

Extended ActivityAsk students to name recent trends in entrepreneurship and to brainstorm reasons for these recent trends. Have students share their responses in class.

Key Terms and Concepts

1. Entrepreneurs organize, manage, and assume the risk of owning and operating a business. Employees work for owners.

2. Lists will vary but may include: determined, self-motivated, self-confi dent, organized, having leadership ability, self-disciplined, creative, willing to work hard, willing to take risks, and having good social skills.

3. Answers may include: they employ 60 percent of the labor force and produce 50 percent of the GDP.

Academic Skills 4. There will be 57 start-ups per week. Half

of those, or 1,500, will be open after four years.

5. The prefi x en means to cause, from the Old French entreprendre, meaning to undertake. Enterprise is an undertaking. Student reports will differ but should draw connections between the history and meanings of the words entrepreneur and enterprise.

Find answers at the Marketing Essentials OLC through glencoe.com.

33.1 AFTER YOU READ

Measurement: Time Determining the frequency of events over a certain time period is usually accomplished with division.

• To solve this problem, divide the total number of start-ups by 52, the number of weeks in a year to determine how many there are each week.

For help, go to the Math Appendix located at the back of this book


ing. The SBA is also providing more opportu-nities to work with government buyers and ways to compete in international markets.

Trends in EntrepreneurshipEntrepreneurship is on the rise. According

to the SBA, the number of incorporated self-employed persons was 5.2 million in March 2004, up from 4.4 million for the years 1999, 2000, and 2001. Several recent trends in the marketplace have fostered this growth:

• The availability of technology • Increased global communication • The rise of the Internet and e-commerce • A society and a market that are more and

more diversified

Smart entrepreneurs are always looking for business opportunities and trends that affect their business. They watch socio-economic and political trends such as dual-income fami-lies, changes in eating habits, and national and international security issues to get ideas.

Check your answers at the Marketing Essentials OLC through glencoe.com.

goods and services produced using labor and property in the United States.

Small businesses benefit the economy and society in other ways, too. They offer consum-ers more choices of goods and services, and they help improve products and processes.

Entrepreneurship and the Global Economy

New businesses are a sign of an economy’s vitality and readiness to find or invent new opportunities in a world market that has become more and more challenging.

The U.S. Small Business Administration (SBA) is finding new ways to help small busi-nesses in the competitive global economy. In 2004, SBA loaned more than $17 billion and trained two million small-business own ers. A new SBA Web site provides business owners with helpful information. This includes access to government services, help with regulations, and applications for help, money, and train-

Key Terms and Concepts 1. How is being an entrepreneur different from being an employee? 2. Study the personal characteristics required of an entrepreneur and list

the ones that describe you. 3. How do small businesses contribute to the U.S. economy?

33.1 AFTER YOU READ

Academic SkillsMath

4. There are 3,000 new business start-ups per year. How many business start-ups is this per week? Statistically, how many of these businesses will remain open at the end of four years?

English Language Arts/Writing

5. Etymology is the study of the origin and history of words. Use a dictionary to discover the etymology of the word entrepreneur. Look up the meaning of the prefix en. How are the words entrepreneur and enterprise related? Write a brief report on the history and meaning of the word entrepreneur.

NCLB

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READING GUIDE

SECTION 33.2

BELLRINGER ACTIVITY

Clip several “business for sale” ads for franchises from a local or national newspaper. Read the ads to students. Ask them to generate a board list of the things they would consider before buying each business.

Preteaching

VOCABULARYKEY TERMS Divide the key terms into two roughly equal groups. Divide the class in half and give each half of the terms. Have each group research the defi nitions of their key terms and report the defi nitions back to the class.ELL Have students write the key terms in their own language fi rst, then in English.

ACADEMIC VOCABULARY Refer students to the OLC through glencoe.com

for the Academic Vocabulary Glossary before they read the section.

GRAPHIC ORGANIZERModel using the graphic organizer for students. Tell students to go to the OLC through glencoe.com for a printable graphic organizer.

NCLB

NCLB connects academic correlations to book content.

Guide students to use their own experiences as organized learners when

analyzing the four forms of business organization.

BEFORE YOU READ

Ask students to predict the legal steps they would need to take before opening a new business.

D Develop Concepts

THE MAIN IDEAAsk a volunteer to read the main idea aloud and ask another student to retell it in his or her own words.

Ways toOwn a

Business

Purchase an ExistingNonfranchise Business


Business Ownership Opportunities There are four ways to enter business: (1) purchase an exist-

ing nonfranchise business, (2) take over the family business, (3) start a new business, or (4) purchase a franchise business.

Purchase an Existing Nonfranchise BusinessWhen an entrepreneur buys an existing nonfranchise busi-

ness, there is usually little or no help from the previous owner. The prospective buyer must investigate the reasons for the

THE MAIN IDEAGoing into business involves deciding how to enter a business, deter-mining its organizational form, and following the steps to make it legal.

GRAPHIC ORGANIZERDraw this chart to write down the steps to establish a new business.

OBJECT IVES• Identify the forms of business

ownership

• Name the legal steps to take in establishing a business

KEY TERMS• franchise • sole proprietorship

• unlimited liability

• partnership

• general partnership

• limited partnership

• corporation • stockholders

• limited liability

• foreign corporation

• limited liability company (LLC)

• Doing Business As (DBA)

• Articles of Incorporation

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• community • vary

Go to the OLC through glencoe.com for printable graphic organizers, Academic Vocabulary definitions, and more.

READING GUIDE

Predict What steps would you take before opening a business of your choice?

SECTION 33.2

BEFORE YOU READ

Logistics of Business Ownership

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

English Language ArtsNCTE 3 Apply strategies to interpret texts.

Analyze Compare

the advantages and

disadvantages of the

four forms of business

organization

NCLB

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CONTINUED

SECTION 00.00

705

DiscussionStarter

FORMS OF BUSINESS OWNERSHIPDiscuss with students the value of networking to help launch a new busi-ness. Remind students that entrepre-neurs network constantly to keep up on innovations in their fi eld, to build their list of resources and contacts, and to keep themselves visible in the community.

Make Connections Have students dis-cuss the ways they network now. Encourage examples of how they may have contacted acquaintances for help in fi nding a job.

Extend Each year, Entrepreneur’s Franchise 500 publishes a list of top ten franchises. Have students research to fi nd out the top ten for this year. Tell students to bring the list to class and discuss them, especially if there are any unfamiliar businesses.

W Writing SupportOrganizations for Entrepreneurs

Have students find the Web site or written materials about one of the fol-lowing national organizations and write a 250-word report on the benefits of membership in each organization:

• National Small Business Association• Small Business Service Bureau• National Association for the

Self-Employed • Small Business Benefi t Association

SECTION 33.2

Have students investigate the Web site listed in this ad and report one characteristic or service they discovered to the class.

AD GUIDE • STARTING YOUR OWN BUSINESS

Discussion Lead a discussion about the entrepreneurial opportunities and services outlined in this ad.

Caption Answer Students might conclude that there are many tasks involved in setting up a business and outsourcing or delegating those tasks may reduce the amount of time or ease the workload of the entrepreneur.


sale of the business. Likewise, business records, the condition of the property, and inventory must be carefully examined. The reputation of the business in the community must be considered as well. In some cases, the new owner may contract the services of the previ-ous owner to assist with management during a transition period.

Take Over the Family BusinessMany of the same considerations for pur-

chasing an existing business apply to tak-ing over a family business. The difference, in this case, is that the previous owner is a family member. Will this help or hinder the new owner in taking control? The new owner must explore potential conflicts and concerns

with family members. Succession planning (transition to the next generation), manag-ing growth, and family relations are some of the challenges of taking over and running a family business.

Start a New BusinessStarting a new business gives an entrepre-

neur great freedom of choice. The new busi-ness owner can start the business of her choice and plan it from the ground up. She can decide where it is located, what it sells, and how it is organized. There are no old debts to settle and no bad reputation to overcome. On the other hand, it is up to the new owner to establish the business’s reputation and build a customer base.

• STARTING YOUR OWN BUSINESS There are many different forms of business and various ways of organizing a company. This ad promotes a company that helps new owners through the incorporation process.

Why would an entrepreneur need assistance with setting up a business?

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S Skill PracticeIndependent PracticePurchase a Franchise Business

L1 Have students conduct research to fi nd the 16 career clusters of the States’ Career Cluster Initiative. Then have them choose one that interests them. Tell them to fi nd and research three franchise com-panies within their chosen career cluster. Have students report the results of their research in a one-page response.

L2 Have each student contact a company that offers franchises and write a 250-word report that summarizes:

1. The amount of money it takes to buy the franchise.

2. The training provided by the franchiser.

3. The restrictions on the types of products one can sell in the franchise outlet.

4. Other relevant information one would need to know about buying a franchise from this company.

L3 Using the self-evaluation survey in Figure 33.1 on page 702, have students identify a particular set of skills in which they are strong. Then have students fi nd a franchise company that would best suit those skills. In a short essay, have students explain why their personal attributes would allow them to succeed in that particular type of business.

SECTION 33.2

CONTINUED

Online ActivityTerms of a FranchiseHave students research the franchise terms for two or more parent compa-nies, such as Subway or Burger King. Ask students to research and identify which parent company offers the entre-preneur more personal freedom.

Extended ActivityCalculating Franchise CostsGive students the following scenario: It costs $75,000 to obtain a franchise for a Sport Store sporting goods store. Have students calculate the percentages for each of the following items:

Answers should read:

a) Franchise fee: $13,500 a) 18%; $13,500 � $75,000 � .18;b) Inventory: $35,000 b) 47%; $35,000 � $75,000 � .47;c) Fixtures and Equipment: $6,500 c) 9%; $6,500 � $75,000 � .09;d) Leasehold Improvements: $15,000 d) 20%; $15,000 � $75,000 � .2; e) Working Capital: $5,000 e) 7%; $5,000 � $75,000 � .07


Purchase a Franchise BusinessA franchise is a legal agreement to sell a

parent company’s product or services in a des-ignated geographic area. McDonald’s Corpora-tion and Taco Bell are examples of companies that sell franchises. They are franchisors. The franchisee (the person buying the business) has to invest money to buy the franchise and also pays an annual fee and a share of the profits. In exchange, the franchisor provides a well-known name, a business plan, advertis-ing, and the proven methods and products of the parent company.

In franchise businesses, new business own-ers have a lot of help. All the business planning is done by the franchisor. Planning generally includes management training, merchandis-ing, and day-to-day operations.

One disadvantage of franchising is the initial cost. A significant amount of capital is needed to purchase most franchises. The fran-chisee must also pay high initial fees to begin operations. In addition, the franchisor is often very strict about how the business is run.

Forms of Business Organization The choice of legal organization or struc-

ture a new business should have is a critical decision. It may make the difference between success and failure. It determines how fast business decisions are implemented and how well the business competes in the market-place. There are four possible forms of business organization (see Figure 33.2):

• sole proprietorship • partnership • corporation • limited liability company (LLC)

The choice depends on the financial and tax situation of the owner, the type of busi-ness, the number of employees who will be hired, and the level of risk involved in the new business. As a business grows, these factors may change and may require reorganization. A business could start out as a sole proprietor-ship, grow into a partnership, and ultimately wind up as a corporation.

Sole ProprietorshipA sole proprietorship is a business

owned and operated by one person. This is the most common form of business owner-ship. Approximately 70 percent of all U.S. businesses are sole proprietorships. Sole pro-prietors usually have a special skill by which they can earn a living; for example, plumb-ers, contractors, and many entrepreneurs who start Web site businesses are often sole propri-etors. The sole proprietor must provide the money and management skill to run the busi-ness. In return for all this responsibility, the sole proprietor is entitled to all the profits.

Advantages and Disadvantages of Sole Proprietorship

A sole proprietorship is easy to start. The sole proprietor provides the money to start the business. For instance, a plumber will spend money on tools, a truck, office space and sup-plies, and possibly advertising. The sole pro-prietorship is generally taxed less than other forms of business, and there is more freedom from government regulation. Because the owner is usually the only investor in the busi-ness, that person is entitled to all the profits. A sole proprietorship also gives a business owner great control over the business.

However, this also means that the owner is responsible for all business debts and legal judgments against the company. If the debts of a business exceed its assets, creditors can claim the owner’s personal assets, such as a home, cars, and savings. This is called unlimited liability, which means that a business own-er’s financial liability is not limited to invest-ments in the business, but extends to his or her total ability to make payments.

The PartnershipA partnership is a legal agreement

between two or more people to be jointly responsible for the success or failure of a busi-ness. Partnerships represent about 10 percent of U.S. businesses. Common partnerships in your community may include real estate agen-cies, law offices, and medical offices.

Online ActivityTerms of a FranchiseHave students research the franchise terms for two or more parent compa-nies, such as Subway or Burger King. Ask students to research and identify which parent company offers the entre-preneur more personal freedom.

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D Develop ConceptsSole Proprietorship Clip several “business for sale” ads for sole propri-etors from a local or national newspaper. Read the ads to students. Ask them to generate a list of the things they would consider before buying each business using these headings: Money Needed to Invest, Products Sold, Legal Requirements for Start-Up, and Location.

Model Invite a sole proprietor to the class to talk about his or her experience in launching an entrepreneurship.

Clarify Explain to students that partnerships can take two forms: general and limited. Discuss the advantages and disadvantages of both.

SECTION 33.2

CONTINUED

Business Organization

Discussion After students have read Figure 33.2, discuss the different ways to enter business. Ask students to defi ne each method in their own words.

Caption Answer A sole proprietorship is the easiest to establish because it involves just one person and no legal agreement.


33.2

Ask students: How does a limited liability company differ from a corporation?

Extended ActivityAsk the students to recall the self-evaluation survey they completed in Figure 33.1 on page 702. Ask: Which of the four forms of business organiza-tion would best suit your personality? Have students explain their answers in class. Answers will vary; students should identify specifi c personality traits and the form of business organization that best suits those personality traits.

PARTNERSHIP

SOLE PROPRIETORSHIP

CORPOR ATION

LIMITED LIABILITY COMPANY


Partners share decision-making responsibility

as well as the business’s profits and losses.

In a limited partnership, a limited partner is

responsible for losses only to the level of his

or her investment in the business. The general

partner is fully responsible for losses.

A sole proprietorship gives an entrepreneur the

greatest control over business decisions and all

the profits. It also exposes the owner to greater

risks.

Corporations are owned by stockholders, who

may range in number from one to millions. Each

stockholder owns a portion of the business and

is responsible for losses only to the level of his or

her investment. In a corporation, the owners may

not be involved in the day-to-day decision making

for the business. With this type of organization,

the benefits and risks are shared among the

stockholders. Corporations can raise money

relatively easily, but the decision-making process

can be slow.The limited liability company (LLC) is a cross

between a partnership and a corporation. Its

owners (called members) have only limited

liability, and it has tax benefits over a corporation.

Go to the Marketing Essentials OLC through glencoe.com to find a project on entrepreneurship.

Business Organization33.2

• The Four Forms of Business Ownership The legal organization of a business is a key decision for an entrepreneur.

It determines how fast business decisions can be made, how well the business will compete in the marketplace,

and how quickly it can raise money.

Which form of business ownership is easiest to establish?

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R Reading StrategyUnderstand Preview the following words by reading them in context. Discuss the words’ meanings with students.

• liability vulnerability• incorporate organize together

SECTION 33.2

CONTINUED

Extended ActivityStock Exchanges and

Public CompaniesHave students defi ne IPO, or initial public offering. Ask students to research a past or recent IPO that took place on a major exchange, such as NYSE, AMEX, or NASDAQ, and to share the results of their research with the class.

Promotion and SoccerDiscussion After students read Global Market, discuss how Siemens used its corporate sponsorship of soccer to promote its name and products in a new market.

Answer: Siemens might shift more development of its engineering business toward consumer products, such as cell phones, when it becomes more visible in consumer markets.


Have students suggest three companies that are direct competitors of Siemens.


A partnership is formed by a partnership agreement, usually prepared by an attorney, which specifies the responsibilities of each partner. Partners share the profits if the busi-ness is a success and the losses if it fails. Profits are usually divided according to the amount of time and money each partner invested. There are two kinds of partnerships: general and limited.

General PartnershipIn a general partnership, each partner

shares in the profits and losses. As in the sole proprietorship, each partner has unlimited liability for the company’s debts. Also, each partner’s share of the business profits is taxed as personal income.

Limited PartnershipIn a limited partnership, each lim-

ited partner is liable for any debts only up to the amount of his or her investment in the company. Every limited partnership, how-ever, must have at least one general partner who has unlimited liability. In exchange for their limited liability, limited partners have no voice in the management of the partnership. The withdrawal of a limited partner does not dissolve the partnership.

Advantages and Disadvantages of Partnerships

There are several advantages to a partner-ship. It combines the skills of the owners. A partnership may make more capital (money)

Promotion and SoccerGerman electronics and engineering company Siemens is known in the United States for domestic appliances. However, its major businesses worldwide are transportation and communication systems and large power turbines.

Siemens deals mostly with governments and large corporations, not consumers. The company is huge, with almost $120 billion in sales in 190 countries.

Global Promotion Siemens is also a cell phone manufacturer in Europe. To compete with big names Nokia and Motorola, it needs to get the company name in the public eye.

The strategy Siemens has chosen is corporate sponsorship of sports, choosing teams that are extremely popular in its target markets of Europe, Latin America, and Asia. Siemens is the major sponsor of the Real Madrid Spanish soccer team. Soon after the Siemens deal, Real signed two soccer superstars, Brazilian Ronaldo and Englishman Beckham. Once the Siemens logo was on the jerseys of the team, Siemens’s share of the cell phone market tripled in Latin America. The effect was strongest in Brazil.

What effects on its major engineering business could come from Siemens being more visible in consumer markets?

Go to the Marketing Essentials OLC through glencoe.com to find an activity about international entrepreneurship.

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D Develop ConceptsThe Corporation Have students create a chart that compares each type of business ownership using these headings: Initial Investment, Level of Risk, Taxes, Ease/Diffi culty of Starting a Business.

Model Bring in examples of private and public corporation materials. These materi-als should detail each company’s business units, board of directors, contact informa-tion, etc. Discuss the structure of each company with students.

Clarify Explain to students that the phrase foreign corporation often means a company that does business in another state, not another country.

SECTION 33.2

CONTINUED

Extended ActivityAsk students: Why might certain groups of professionals, such as doctors, at-torneys, accountants, and other profes-sionals, form corporations? Answers could include the following: to limit liability, share costs of doing business, share work responsibilities, etc.

Online ActivityOnline StoreHave students choose and analyze an online store. The store can sell products, services, or a combination of both products and services. Ask students to decide what an entrepreneur who wishes to have an online store must take into account and report their conclusions in a one-page response.


available, allowing easier operation and expansion. It gives each partner a voice in the management of the business. A partnership is taxed solely on the profits of the business and regulated less heavily than a corporation.

What are some of the disadvantages of partnerships? The owners may not always agree on business decisions, yet the actions of one partner are legally binding on the other partners. This means that all partners must assume their share of the business debt. They must also be responsible for the shares of any partners who cannot pay. Finally, the business is dissolved if one partner dies. It can be reor-ganized as a new partnership, but the process is time consuming and costly.

The CorporationA corporation is a legal entity created

by either a state or a federal statute authoriz-ing individuals to operate an enterprise. In other words, a corporation is a business that is owned by several people but is considered to be just one person or entity under the law. A corporation has several unique features:

• Legal permission to operate To operate a business as a corporation, the owners must file an application with state officials for permission. Once the application is approved, this document becomes the corporation’s charter.

• Separate legal entity A corporation is a separate legal entity that is created by law. A corporation can borrow money, sign contracts, buy or sell property, and sue and be sued in court.

• Stockholders The ownership of a corporation is divided into shares of stock. If the corporation sells stocks, it is one way to raise money. The owners of a corporation are the stockholders.

• Board of directors Stockholders own the corporation, but often they do not manage it. Instead, the stockholders elect a board of directors that is responsible for major decisions that affect the company.

Corporations offer owners limited liabil-ity. Limited liability means that the per-sonal assets of the owners cannot be taken if the company does not meet its financial obli-gations or if it gets into legal trouble. Unlike a partnership, a corporation is not affected by the death, incapacity, or bankruptcy of an officer or a shareholder.

Types of CorporationsThere are many types of corporations,

but the two main categories are private and public corporations. A public corporation is a business entity created by the federal, state, or local government. This group can include incorporated cities as well as school, transit, and sanitation districts.

A private corporation is formed by pri-vate persons. This category is very broad and includes closely held corporations (or “close corporations”) and publicly held corporations (sometimes these are called public corpora-tions even though they are subject to different rules than the public corporations described above).

A closely held corporation is owned by a few persons or a family. Shares or stocks of a closely held corporation are not sold to the public. On the other hand, a publicly held corporation is one whose stock (shares) is owned by a large group of people. Selling stock helps a corpora-tion raise capital. In the United States, stocks or shares of a publicly held corporation are usually sold on the New York Stock Exchange (NYSE), the American Stock Exchange (AMEX), or the National Association of Securities Deal-ers Automated Quotations (NASDAQ) system. Microsoft is an example of a publicly held cor-poration whose stock is traded on NASDAQ.

If a corporation succeeds, the value of the stock rises and stockholders benefit. Stock-holders own their shares with limited liabil-ity. For example, if a stockholder purchased $1,000 worth of Dell Computers stock and the company failed, the investor would lose the investment amount but would not be respon-sible for the company’s debt.

D

709

SECTION 33.2

INDEPENDENT REVIEW

L1 Assign and review Chapter 33 activities in the Student Activity Workbook.

L2 Assign and review Chapter 33 activities in the Marketing Math Workbook.

L3 Assign and review Chapter 33 activities in the BusinessWeek Reader with Case Studies.

AFTER YOU READHave students complete the Section 33.2 After You Read section review.

ONLINE STUDY TOOLSHave students to the Marketing Essentials OLC through glencoe.com for the Section 33.2 practice test.

CONCEPTS

1. Have students review and list the four forms of business ownership.These include: sole proprietorship, partnership, corporation, and limited liability company.

2. Ask students to list the legal steps involved in setting up a company:Legal steps include: fi nd help, register the business, and obtain licenses.

KEY TERMSIn small groups, have students review key terms, their spellings, and defi nitions.

Online ActivityLegal Steps and Online BusinessesAsk students to research any regulations required for registering businesses that con-duct operations over the Internet. Encourage students to choose one company or organi-zation which conducts its business over the Internet and describe at least two characteris-tics of that business which relate to the Inter-net. Have students summarize their fi ndings in a one-page report.


The Limited Liability CompanyThe limited liability company (LLC) is

a relatively new form of business organization. This business structure is a hybrid of a part-nership and a corporation. Its owners (called members) are shielded from personal liability, and all profits and losses pass directly to the owners without taxation of the entity itself.

Legal Steps to Establishing a Business

Before an entrepreneur can officially open the doors of a new business, he or she must take specific steps to legally establish and pro-tect the business. These steps vary depending on whether the business will be a sole propri-etorship, partnership, corporation, or limited liability company.

Step 1: Find HelpNew business owners may wish to consult

an accountant, attorney, or other business advisor to determine the best organization for their new businesses. When a corporation is formed, the laws of many states require that an attorney be hired to guide the entrepreneur through the complicated process of incorpora-tion. The entrepreneur must check the laws of the state in which she or he is incorporating.

Step 2: Register the BusinessTo form a sole proprietorship or partner-

ship, a business owner must file for a DBA at the local county clerk’s office. A DBA (Doing Business As) is the registration by which the county government officially recognizes that a new proprietorship or partnership exists.

A DBA also protects the name of the busi-ness for a certain number of years. This name protection applies only to the county where the business is registered. There is usually a fil-ing fee for registration.

To form a corporation, an entrepreneur must file Articles of Incorporation with the corporation and securities bureau in the state department of commerce.

Articles of Incorporation identify the name and address of a new corporation, its purpose, the names of the initial directors,

Forming a CorporationForming a corporation is a complicated

process. An entrepreneur must determine the company’s internal corporate structure, which is defined by its bylaws, and the processes for selecting a board of directors and electing offi-cers (those who handle the day-to-day opera-tions). In small corporations, members of the board of directors are frequently elected as the officers of the corporation.

An entrepreneur must also choose the state in which to incorporate (establish) the com-pany. For small companies, it is generally best to do this in the state where the company will do business.

A foreign corporation is one that is incorporated under the laws of a state that dif-fers from the one in which it does business. (Foreign here means another state, not another country.) These foreign corporations must reg-ister with each state in which they intend to do business.

Advantages and Disadvantages of Corporations

Why would an entrepreneur decide to incorporate his or her business? There are four main advantages of incorporation:

1. Each owner has limited liability.2. It is easier to raise capital (money) with

corporations than with other forms of business. Capital is often needed for expansion.

3. Owners can easily enter or exit the business simply by buying or selling stock.

4. Management is shared—each area of the business is handled by someone with expertise in that area.

Disadvantages include the following:

1. Complexity of formation 2. Increased government regulation

3. Corporate profits are taxed. Shareholders are taxed on dividends they earn as well as on profits made from the sale of a stock.

4. Intricate accounting and record keeping

710


CULMINATING ACTIVITY

Have students complete the following statements:

• Entrepreneurs must have the skills necessary _________. to run the business.

• To form a sole proprietorship or partnership, _________. a business owner must fi le for a DBA.

SECTION 33.2

NCLB

NCLB Activity correlated to Mathematics and Social Studies Standards

33.2 AFTER YOU READ

Find answers at the Marketing Essentials OLC through glencoe.com.

Key Terms and Concepts

1. Four ways to become a business owner include start a new business, purchase a franchise, purchase an existing business, and take over a family business.

2. Four legal forms of business organization are sole proprietorship, partnership, corporation, and limited liability company. Sole proprietorship is the most common.

3. Advantages of a limited liability company include: it has tax benefi ts and its owners are shielded from personal liability.

Academic Skills 4. This person works 2,805 hours;

11 � 5 � 51 � 2,805. This is equivalent to 70.125 40-hour work weeks; 2,805 � 40 � 70.125.

5. A trademark is a symbol, word, phrase, or design that identifi es the source of goods; it can be used legally only by the owner of the trademark. A copyright pro-tects an original artistic or literary work. A patent protects an invention.

Measurement: Time When solving problems that ask for values associated with time periods, know the equivalent measurements. For example, there are 24 hours a day, 7 days a week, and 52 weeks a year.1. To solve this problem, multiply the

number of hours worked a day by the number of days worked each week, and then the number of weeks worked a year to determine the total number of hours worked in a year.

2. Divide the total hours worked in a year by 40 to determine the number of 40-hour work weeks.

For help, go to the Math Appendix located at the back of this book.


and the amount of stock that will be issued to each director.

There is a filing fee, but the business becomes protected and no other business may register under that business’s name. The necessary forms, applications, and informa-tion on filing fees can be obtained from the state department of commerce.

An LLC is established by filing Articles of Organization with the state. This document describes the LLC and lists the names of its members and initial managers. Many states also require LLCs to have an operating agree-ment. For the company to have the tax advan-tage of an LLC, this document must show that the company is distinct from a corporation.

Step 3: Obtain LicensesDepending on the type of business and

where it is located, a new owner may have to

obtain one or more licenses in order tooperate. Licenses establish minimum stan-dards of education and training for people who practice in a particular profession. They also regulate where businesses can lo cate, and they protect neighborhoods and the environment.

Individual states license many businesses and occupations, such as doctors, accoun-tants, cosmetologists, barbers, marriage coun-selors, and pharmacists.

Licensing is done to protect the public from unqualified people practicing in a busi-ness and to maintain the health and welfare of the citizens.

In addition to state licenses, the com-munity may require special local licenses or permits to comply with zoning ordinances, building codes, and safety standards.

Local governments use licensing as a way to regulate people who plan to enter cer-tain types of businesses. Most communities require a business owner to obtain a license before opening a hotel, restaurant, or movie theater.

Summarize How is a corporation formed?

Check your answers at the Marketing Essentials OLC through glencoe.com.

Key Terms and Concepts 1. List the four ways to become a business owner. 2. What are the four legal forms of business orga-

nization and which is the most common? 3. What is one advantage of a limited liability

company?

33.2 AFTER YOU READ

Academic SkillsMath

4. An entrepreneur works 11 hours a day, five days a week, 51 weeks a year. How many hours does this person work annually? To how many 40-hour workweeks is this equivalent?

Social Studies/Government

5. The U.S. government protects entrepreneurs by issuing trademarks, copyrights, and pat-ents. Research each of these terms and write a description of the type of protection provided by each.

Answer To form a corporation, an entrepre-

neur must determine the company’s internal corporate structure, which is defi ned by its bylaws, and the processes for selecting a board of directors and electing offi cers. The entrepreneur must also choose the state in which to incorporate (establish) the company.

NCLB

711




Students should demonstrate an under-standing that during start-up, many com-panies have few employees; it is common for entrepreneurs to perform tasks at all levels.


Lifelong Learning

CAREER INFORMATION Have students go to the Marketing Essentials OLC through glencoe.com and fi nd the Chapter 33 Careers page and click on the link for the American Market-ing Association’s Careers Strategies and Tips. Ask students to select one article, read it, and summarize it in three short paragraphs.

MANAGEMENT SKILLSCreativity, knowledge of online consumers’ behavior, and dynamic decision-making skills contribute to Jermaine Griggs’ success at the online company. Being aware of the internal and external drives of consumers, coworkers, competitors, and other decision-makers allows marketers and managers to remain competitive in the marketplace.

PrimarySourceAsk students to go to the Marketing Essentials OLC through glencoe.com and fi nd Chapter 33 Resources. Ask them to click on the link for the American Market-ing Association’s marketing dictionary and read the defi nitions of the terms related to entrepreneurial concepts.

Test-Taking StrategiesShow students how they can create a chapter outline by recording the different levels of headings as they read. They can then record their notes on the outline and use the outline to review chapter concepts.


JERMAINE GRIGGSCEO AND FOUNDER, HEARANDPLAY.COM

What do you do at work?

In the beginning, I was head customer service representative, phone operator, fulfi llment manager, and Web designer. As the business grew, the day-to-day operations began to be automated, allowing me to focus more on building and growing the business. I now focus on attracting joint-

venture partners, building and cultivating relationships with affi liates, product development, and implementation of new strategies. Lastly, because of the power of the Internet to split-test different versions of a Web site, I am regularly testing and changing sales copy, advertisements, order form layouts, and other sections of our Web site to better improve conversion rates, visitor values, and overall sales.

What skills are most important to you?

A manager who has had wide success in the offl ine world is not necessarily guaranteed success on the Internet. If I had to rely totally on employees for Web design, e-mail marketing, search engine optimization, and other functions, I would truly be lost! To know at least the minimum rules of the game is essential. The ability to be aware of trends, consumer behaviors online, and audience inter-action, and to be able to respond and alter strategic plans accordingly is vital. Also, patience and the ability to watch extraordinarily good days pass as well as all-time low days are defi nitely attributes of a net entrepreneur.

What is your key to success?

My eagerness to learn. I never stop learning.

Courses general business, computer

Degrees High School, BS, MBA

Web entrepreneurs come from all walks of life—this has historically been a fi eld in which people can succeed, if they have the right idea and the willingness to follow through.

Growth about as fast as average for the next ten years

Source: Occupational Outlook Handbook

Creativity, knowledge of the Internet and the product/service being offered

Go to the Marketing Essentials OLC through glencoe.com to fi nd a career-related activity.

Why is it a good idea for net entrepreneurs to perform many of the tasks that might ordinarily fall to employees?

712






See the Glossary at the back of this book for defi nitions of Key Terms. Academic Vocabu-lary defi nitions are on the book’s OLC.

1. A sample answer might read:Key Terms Entrepreneurship is the process of starting and operating your own business.Academic Vocabulary To indicate means to point out or point to.

Ask volunteers to read the summaries aloud and give one real-life example for each concept.

CHAPTER 33 REVIEW

2. Entrepreneurship is starting and managing your own business.

3. Potential failure, loss of income, and poor health are risks.

4. Advantages include personal free-dom, satisfaction, increased income, and increased self-esteem.

5. Characteristics include: like making decisions, enjoy competition, have will power and self-determination, plan ahead, get things done on time, take advice from others, and adapt to changing conditions.

6. Small businesses employ 55 percent of the labor force and produce 50 percent of GDP.

7. Opportunities include starting a new business, purchasing a franchise, purchasing an existing business, and taking over a family business.

8. The prospective buyer of an exist-ing business must investigate the reasons for the sale of the business, and also examine business records, the condition of the property, inven-tory, and the business’ reputation in the community.

9. A franchise is a legal agreement to sell a parent company’s product or services in a designated geographi-cal area.

10. Answers can include any four advantages of a sole proprietorship (easy to start, less taxes, the owner receives all profi ts) or various part-nerships (combines skills of owners, may make more money, allows for easier operation and expansion).

11. two


C H A P T E R 33 R E V I E W

SECTION 33.1• Being an entrepreneur involves risk taking but can bring personal and fi nancial rewards.

• Advantages of entrepreneurship include being your own boss and earning a high income

if the business succeeds. Entrepreneurs can try out their own ideas, set their own work

schedules, and make their own business decisions. Disadvantages of entrepreneurship

include the risk of failure, long working hours, and the potential loss of income.

• Entrepreneurship is important to our economy. It creates jobs, which provide income to

individuals and communities.

SECTION 33.2• The four ways to become a business owner are (1) purchase an existing business, (2) take

over the family business, (3) start a new business, and (4) purchase a franchise business.

• The four forms of business organization are (1) sole proprietorship, (2) partnership, (3)

corporation, and (4) limited liability company.

Key Terms• entrepreneurship (p. 698)• entrepreneurs (p. 698)• franchise (p. 706)• sole proprietorship (p. 706)• unlimited liability (p. 706)• partnership (p. 706)• general partnership (p. 708)• limited partnership (p. 708)

• corporation (p. 709)• stockholders (p. 709)• limited liability (p. 709)• foreign corporation (p. 710)• limited liability company

(LLC) (p. 710)• Doing Business As (DBA)

(p. 710)

• Articles of Incorporation (p. 710)

Academic Vocabulary• indicate (p. 701)• domestic (p.702)• community (p. 705)• vary (p. 710)

1. On a sheet of paper, use each of these key terms and academic vocabulary words in a written sentence.

2. Defi ne entrepreneurship. (33.1)

3. List risks of entrepreneurship. (33.1)

4. List advantages of entrepreneurship. (33.1)

5. List the characteristics and skills needed to

be a successful business owner. (33.2)

6. Why are small businesses important to the

U.S. economy? (33.2)

7. List four opportunities for becoming a

business owner. (33.2)

8. Name three things to examine before buying

an existing business. (33.2)

9. What is a franchise business? (33.2)

10. List advantages of a new business. (33.2)

11. What is the minimum number of people

required for a partnership? (33.2)

713

12. Workplace Skills Responses might include: a sound

business structure, contract, the abil-ity to work together, and fi nances are factors to consider.

13. Technology Applications Student reports will vary depending

on the type of business; all reports should include: the name of the business and the procedures for fi ling for a DBA locally.

Formative AssessmentFormative assessment is an essential component of classroom work. This type of assessment provides information that is then used as feedback to modify teaching and meet student needs.

L1 Have students identify the four forms of business organization.

L2 Have students write an evaluation of the effectiveness of small business.L3 Have students create a corporation promoting a product or service of their choice. Have students outline the structure of their company and discuss the legal steps they need to take to set up the company.

If the results of this formative assessment seem low, consider the following activity:

Read each of the key terms aloud. Have students defi ne the key terms and use them in a sentence. Address any questions that students may have.

CHAPTER 33 REVIEW

14. Math Practice $76,500 is left after buying

equipment; $90,000 � ($90,000 � 0.15) � $76,500.

15. English Language Arts/

Writing Accept all reasonable reports that

refl ect what the student has learned about the key fundamentals in starting or running a business.

16. Innovation and

Entrepreneurship Answers may include: Entrepreneurs

often have an idea, or business concept, that drives their business. It may be a perceived need in the marketplace, a new product, or a variation of an existing product. These new ideas are innovations.

17. Buying a Franchise Research and interviews will vary.

Accept responses that show student has done the work and understands the concept.


12. Workplace Skills Human Relations A very good friend of

yours wants to start a bicycle rental shop.

Both of you are bicycle enthusiasts, and you

decide to explore this possibility together.

What important factors should you consider

so that becoming business partners does not

destroy your friendship?

13. Technology ApplicationsFiling a DBA Continue to explore the

business opportunity described in the

previous exercise. Create a name for your

new business. Using the Internet, research

the procedures and fees for fi ling for a DBA

at your county clerk’s offi ce. Also determine

whether another business is using this

business name. Use a word processing

program to write a report of your fi ndings.

14. Math Practice Business Numbers Your company had

sales revenue of $2,000,000 last year. Profi t

was $90,000. Of that you decide to allocate

15 percent of that profi t to new equipment.

How much is left after you have bought the

equipment you need?

Problem Solving: Multi-Step

Problems When solving problems that

require multiple steps, make a list of the

information given in the problem as well as

the information for which you will be solving.

This will make clear the relationships between

what you are looking for and what is given.

For help, go to the Math Appendix located at the back of this book.

15. English Language Arts/Writing Entrepreneurship Skim the chapter,

reviewing the requirements of entrepre-

neurship. Decide on a type of business you

would like to open. Make a list of all the

things that you think you will need.

16. Innovation and Entrepreneurship

Why is entrepreneurship associated

with innovation? List three reasons and

three examples of companies that have

been innovators. Explain briefl y why each

company you have selected is an example of

innovation.

17. Buying a Franchise Interview the owner of a local franchise.

Learn how he or she decided to purchase this

particular franchise, what kind of support he

receives from the company, what his job is

like, and advice he would give to someone

considering purchasing a franchise.

Activity Use presentation software to create

a report of what you learned.


714

18. Spotting Hot New Market Trends

Encourage students to read their essays aloud to the rest of the class and use their essays to motivate discussion.

CHAPTER 33 REVIEW

STANDARDIZED TEST PRACTICE

ANSWERS

1. C 2. F

TEST-TAKING TIPSWhen your students have a standardized test coming up, these last-minute tips and strate-gies will help students relax and do their best.

Test Format Help your students become familiar with the format of the specifi c test they are going to take by practicing with test items that imitate the actual test items.

Test Timing Have your students take one or more timed practice tests so that they become comfortable with the test format.

MINI-QUIZRead these sentences to the students and have them volunteer the missing words:

1. ________attempt to earn money and make profi ts by taking the risk of owning and operating a business. (Entrepreneurs)

2. A legal agreement between two or more people to be jointly responsible for the success of a business is called a ______. (sole proprietorship)

3. The people who actually own a corporation are known as its _____. (stockholders)

For an expanded chapter quiz, go to Chapter 33 in the TeacherWorks™ Plus DVD and to Chapter 33 in the ExamView® Assessment Suite.

The students should be evaluated on the performance indicators noted in the role play. For another DECA role play, go to the Competitive Events Workbook or the Student Activity Workbook, or go to the Marketing Essentials OLC through glencoe.com.


DECA Advisors CornerOne approach to DECA Week is to highlight a different aspect of DECA each day during that week. Brainstorm with chapter members to plan specifi c activities for each day during the national DECA Week and use the conceptual foundation of the organization, the DECA diamond.



Role PlayBusiness Major GraduateSituation Assume the role of recent college

graduate. You majored in business, as did

a close friend (judge). You have talked of

becoming partners in a business venture

and have worked at various jobs during high

school and college. You have studied the

business climate in your area and decided

that opening a housecleaning service would

fi ll a need and be successful. You can either

start your own independent business or buy a

franchise business. Which opportunity should

you pursue?

Activity You are to explain to your friend

(judge) the advantages and disadvantages of

buying a franchise business so that you can

reach a decision.

Evaluation You will be evaluated on how well

you meet the following performance indicators:

• Explain the types of business ownership.

• Explain the concept of private enterprise.

• Describe the nature of legally binding

contracts.

• Determine

factors

affecting

business risk.

• Make oral

presentations.

For more information and DECA Prep practice, go to the Marketing Essentials

OLC through glencoe.com.

18. Spotting Hot New Market Trends

Entrepreneurs often look into the future

to fi nd new market possibilities. Using the

publication The Futurist, research a new

market trend in your fi eld of interest (go

to the Marketing Essentials OLC through

glencoe.com and look for a link to the World

Future Society Web site or fi nd the publication

in your library). Write an essay about what you

fi nd and describe how your skills would help

you to enter this fi eld.

1. Directions Choose the letter of the best answer. Write the letter for the answer on a separate piece of paper.

How many hours are in 43 days? A 516 B 2,310 C 1,032 D 812

2. Directions Choose either True or False as the answer. Write the letter for the answer on a separate piece of paper.

Limited liability is one of the benefi ts of a sole proprietorship.

T

F

To handle the stress of taking tests, approach exams with a positive attitude. View the exam as an opportunity to show how much you have studied.

Test-Taking Tip

STANDARDIZED TEST PRACTICE

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