Lecture 1: Intro to Business

Industries/Verticals/Market Segments

• Group of businesses in the same field

• Substitute goods

• Competitors

Chain

• Transportation

• Real estate

• Change in subindustries

SLC: Standard Industrial Classification

• Import/Export/Taxes (IRS)

Small Business Administration (SBA)

• Loans

• Census

• Disposable Income Places

• Write a business plan, fund it.

Structures for Businesses

1. Most common: Sole Proprietorship

   • Legal structure, tax code

   • Very easy to start, least filing, decision making efficient

   • All treated as personal income

2. Partnerships

   • 2-3 people co-own

   • Treat everything as income, money split along lines, individual people

3. Limited Liability Partnership (LLP/LP)

   • Law firms, accounting firms

   • Wall of separation so liability/legal falls on the business

   • Pay independent taxes

4. Limited Liability Corporation (LLC)

   • First business structure

   • Stock (members allocated by stock ownership)

   • First organization by which another company owns stocks

     • Microsoft owns 40% of OpenAI

   • Own entity in tax laws, filing practices, insurance

   • Loans, debt, credit issued in business’ name

   • Can still ask for personal guarantee by banks

5. Corporation

   1. C-Corp: Full corp

   2. S-Corp: Startup, small corporation

   • Most intensive filing, own independent, separate entity

   • Citizens United: Corporations can politically participate

   • Double tax, taxed as own entity (W2 Form), property tax but no stock tax, anything justified as part of business is paid for

6. Franchise

   • Agrees to operate like another business with royalty fees

   • Use foods, processes, marketing, logistics, employee handbook, etc.