Businesses
Forms of Business Ownership
Definition: A type of enterprise which is unincorporated and owned by one person
Advantages: Minimal paperwork and starting up is cheap
Disadvantages: All responsibility of the business is on you and less legal protection
Examples: Personal trainer and freelance jobs
Interesting Information: Sole proprietors have complete control over their business
Partnership
Definition: When two or more individuals combine their resources and form a business
Advantages: Greater borrowing capacity and start up costs are still low
Disadvantages: Profits will be split and disagreements may come
Examples: Accounting groups and law firms
Interesting Information: There are fewer tax forms due to no additional business entity taxes
Corporation
Definition: A business that is owned by shareholders who elect others to work for the company. Shareholders are not liable for the actions of the business
Advantages: Better access to capital and limited personal liability
Disadvantages: Time consuming and expensive and complicated to form
Examples: Microsoft Corp and Coca-Cola Corp
Interesting Information: Corporations pay a very low tax rate (15.5%)
Franchise
Definition: A business model where a franchisor grants a franchisee a license to sell products under the franchisors business name
Advantages: little to no experience is needed and there is an already existing customer base
Disadvantages: higher operating costs due to royalties and limited growth potential
Examples: McDonalds and Pizza Hut
Interesting Information: You have access to constant support and don't need to start from scratch
Co-operative
Definition: A business owned by people to meet their shared needs
Advantages: shared decision making and less taxation
Disadvantages: less operational control and equal voting rights regardless of investment
Examples: Desjardins and Mountain Equipment Co-op
Interesting Information: There are over 3 million co-ops around the world that employ over 280 million people
Types of Businesses
Service
Definition: The act of assisting or performing a job for someone
Advantages: Easy to start since you don't have to search for products
Disadvantages: Time taking services
Examples: Tree cutting services
Interesting information: low investment ideas meaning they take minimal cash to get started
Merchandising
Definition: a business form of promoting the sale of goods in the retail market
Advantages: Increased sales
Disadvantages: Number of Staff
Examples: Walmart
Interesting Information: Some products are only available at retailors who produce them
Manufactoring
Definition: Uses raw materials to build goods
Advantages: High quality products
Disadvantages: High transportation cost
Examples: Food Manufacturing
Interesting Information: Manufacturing has around 18 million employs and the numbers are expected to double within a few years
E-Commerce
Definition: A business model in which buys and sellers exchange goods & services with clients over the internet
Advantages: Cost Reduction
Disadvantages: Can't test product before purchasing
Examples: Amazon
Interesting Information: In 2022, over 2.3 billion people bought goods and services online
Non-Profit
Definition: Businesses that don't work for financial gain
Advantages: Make a difference
Disadvantages: Relying on donations
Examples: The Canadian red cross society
Interesting Information: Non-profit organisations receive the majority of government financing.