the ability to obtain additional financial resources.

the protection of limited liability.

an unlimited lifespan.

the chance to be their own boss.

possibility of limited liability.

heavy tax liability that must be assumed.

overwhelming time commitment often required of the owner.

lack of incentives to motivate the owner.

sole proprietorship.

cooperative.

Corporation.

general partnership.

reducing your working hours.

having the freedom to set your own working hours and taking lots of vacations, particularly when just beginning the business.

accepting accountability for the mistakes of the business.

having limited financial resources to throw into the business.

achieve both goals since this form of ownership is both the easiest to form and the least risky.

meet her first goal since sole proprietorships are easy and inexpensive to form. However, she would expose herself to personal risk because owners of sole proprietorships have unlimited liability.

not achieve either goal since proprietorships are both costly to set up and subject to unlimited liability.

achieve her second goal, since the owners of sole proprietorships are legally protected from losing more than the amount they invest in their company. However, she would find that the start-up costs would be higher than if she had incorporated her business.

Ease of starting and ending the business

Unlimited liability

Shared management and pooled skills

Little time commitment

joint venture.

general partnership.

limited partnership.

cooperative.

Creditors

Stockholders

Managers

Employees

One of the advantages of buying a franchise is that franchisors are so closely regulated that there is virtually no chance for scams to succeed.

Before purchasing a franchise, the buyer should carefully evaluate the franchise, the franchisor, his or her own situation, and the nature of the market.

Franchise agreements are simple to evaluate, since federal law requires that all such agreements must be written in plain English with all fees and terms clearly explained.

Buying a franchise is the simplest and least expensive way to set up a business, since the franchisor has already worked out all of the details for setting up and running the business.

an economic shakeout at work.

the coattail effect.

the law of diminishing returns.

management by exception.