Technopreneurship Powerpoint presentation, Slides of Business networking

Download Technopreneurship Powerpoint presentation and more Slides Business networking in PDF only on Docsity! TECHNOPRENEURSHIP Lesson Outlines: ➢ Scrutinize the characteristics and functions of business entities ➢ Identify differences of micro business, small business, and medium sized business according to its sales and employees Characteristics of Small Business Small business may be defined in various ways e.g. in terms of investment, number of persons employed, volume of output and sales, technique of production etc. A business which functions on a small-scale level involves less capital investment, less number of labor and fewer machines to operate is known as a small business. Small scale Industries or small business are the type of industries that produces goods and services on a small scale. These industries play an important role in the economic development of a country. The owner invests once on machinery, industries, and plants, or take is a lease or hire purchase. These industries do not invest more than one crore. Few examples of small-scale industries are paper, toothpick, pen, bakeries, candles, local chocolate, etc., industries and are mostly settled in an urban area as a separate unit. Characteristics of Small Business Small Business Limited investment Personal character/Ow ner Management Labor- intensive Unorganized labor Local Area of Operations Flexibility Resources Problems Faced by Small Business Enterprises: Small business enterprises in India face many problems, which come in the way of their growth and prosperity. These problems could be put into two categories: • Financial problem – the central problem • Other problems Management Functions Ethical accounting practices Human resources Facility management Information technology Customer focus Website development Social media Search engines Work-life balance Don’t forget the fun les Y= ¢ nT) Sm! 0 m) e hn \e] re Forms of Entities Easy to start (no need to register your business with the state). No corporate formalities or paperwork requirements, such as meeting minutes, bylaws, etc. You don’t need to absorb all the business losses on your own because the partners divide the profits and losses. Owners can deduct most business losses on their personal tax returns. Sole Proprietorship Each owner is personally liable for the business’s debts and other liabilities. In some states, each partner may be personally liable for another partner’s negligent actions or behavior (this is called joint and several liability). Disputes among partners can unravel the business (though drafting a solid partnership agreement can help you avoid this). It’s more difficult to get a business loan, land a big client and build business credit without a registered business entity. Most people form partnerships to lower the risk of starting a business. Instead of going all-in on your own, having multiple people sharing the struggles and successes can be very helpful, especially in the early years. If you do go this route, it’s very important to choose the right partner or partners. Disputes can seriously limit a business’s growth, and many state laws hold each partner fully responsible for the actions of the others. For example, if one partner enters a contract and then violates one of the terms, the third party can personally sue any or all of the partners. Forms of Entities Owners (shareholders) don’t have personal liability for the business’s debts and liabilities. C corporations are eligible for more tax deductions than any other type of business. C corporation owners pay lower self-employment taxes. You can offer stock options, which can help you raise money in the future. C Corporation More expensive to create than sole proprietorships and partnerships (the filing fees required to incorporate a business range from $100 to $500 based on which state you’re in). C corporations face double taxation: The company pays taxes on the corporate tax return, and then shareholders pay taxes on dividends on their personal tax returns. Owners cannot deduct business losses on their personal tax returns. There are a lot of formalities that corporations have to meet, such as holding board and shareholder meetings, keeping meeting minutes and creating bylaws. Most small businesses pass over C corps when deciding how to structure their business, but they can be a good choice as your business grows and you find yourself needing more legal protections. The biggest benefit of a C corp is limited liability. If someone sues the business, they are limited to taking business assets to cover the judgment — they can’t come after your home, car or other personal assets. Corporations are a mixed bag from a tax perspective — there are more tax deductions and fewer self-employment taxes, but there’s the possibility of double taxation if you plan to offer dividends. Owners who invest profits back into the business as opposed to taking dividends are more likely to benefit under a corporate structure. Corporation formation and maintenance can be complicated, but online legal services can help with these things. Forms of Entities Owners (shareholders) don’t have personal liability for the business’s debts and liabilities. No corporate taxation and no double taxation: An S Corp is a pass-through entity, so the government taxes it much like a sole proprietorship or partnership. S Corporation Like C corporations, S corporations are more expensive to create than both sole proprietorships and partnerships (requires registration with the state). There are more limits on issuing stock with S corps than C corps. You still need to comply with corporate formalities, like creating bylaws and holding board and shareholder meetings. To organize as an S corporation or convert your business to an S corporation, you must file IRS form 2553. S corporations can be a good choice for businesses that want a corporate structure but like the tax flexibility of a sole proprietorship or partnership. Forms of Entities Owners don’t have personal liability for the business’s debts or liabilities. You can choose whether you want your LLC to be taxed as a partnership or as a corporation. Not as many corporate formalities compared to an S Corp or C corp. Limited Liability Company It’s more expensive to create an LLC than a sole proprietorship or partnership (requires registration with the state). LLCs are popular among small business owners, including freelancers, because they combine the best of many worlds: the ease of a sole proprietorship or partnership with the legal protections of a corporation.