Required informationSkip to questionHardware House: Finding Sources of Cash for Expansion This activity is important because if you decide to start your own business, you may be faced with difficult decisions regarding how to structure the ownership of that business. While the majority of businesses operate as a sole proprietorship, many grow beyond the capability of a sole proprietorship and evolve into a different type of ownership. For example, companies often need to evolve their ownership in order to acquire cash necessary to expand the business. The goal of this exercise is to demonstrate your understanding of the different ways that businesses can be organized. Read the case of describing the growth of a small start-up manufacturing organization and answer the questions that follow. Case:Doug Datner had an eclectic background. He completed his law degree from the University of Virginia, then went to work for a technology start-up in Dubai. After the start-up was purchased by a larger corporation, affording Doug a hefty sum of money, Doug and his spouse returned to the United States. While working with an architect and a designer to build their dream home, they realized that there was not a provider of high-quality custom-made door and window hardware at a reasonable price point in the United States. Even though Doug had no experience in the field, he decided to start a business manufacturing high-quality custom-made door and window hardware. He named the company Hardware House. Doug and his wife cleared space in their newly constructed garage, designed several basic prototypes, and hired a metalwork expert to replicate their prototypes. They decided to have a few designs in catalog as one component of their business, but have the capability to alter those designs to provide designers with custom hardware.  The first few years were tough. Business was steady enough to hire a second metalwork expert, but cash flow challenges often made Doug worry whether he would be able to pay his metalwork experts on time. Still, the Hardware House had gained a number of consistent clients, and was able to move into an old warehouse space and expand operations. Ten years later, Hardware House has nearly 100 employees. While the majority of the employees work in manufacturing, there are also employees in marketing, design, accounting, and human resources. Doug structured the business to limit his liability in case of lawsuit but still managed to maintain the business without sharing ownership.  Doug has determined that the most advantageous way to acquire cash is to sell stock to public markets. Doug will need to file which of the following? Multiple Choiceinitial public offeringarticles of partnershiparticles of incorporationlimited liability corporationquasi-public corporation

One major advantage of organizing a business as a sole proprietorship is that:A.the business has an unlimited life span.B.it is easy to quickly raise large sums of capital.C.risk and liability are divided among many people.D.it is fairly simple to get the business started.

Explain one method a business may use to expand

Required informationSkip to questionBusiness Ownership: Zingerman's Deli This activity is important because there are three primary forms of business ownership—sole proprietorship, partnership, and corporation—each with advantages and disadvantages. These forms are the most often used, regardless of whether the business is a traditional "bricks-and-mortar" company, an online-only one, or a combination of both. Other forms of ownership that are increasingly popular include joint ventures, S corporations, and limited liability companies. The goal of this exercise is to demonstrate your understanding of the progression of a small business from a partnership into a corporation. Read the case below and answer the questions that follow. Part I: Paul Saginaw and Ari Weinzweig opened Zingerman's deli in 1982 in Ann Arbor, Michigan. With a reputation for great service and tasty specialty foods, Jewish dishes, and sandwiches, the little deli grew into a local institution with annual sales of $ 5 million in just eight years. The firm also gained praise for helping support local charities and for their Food Gatherers service, which provided food to those in need. Zingerman's became world renowned, thanks to glowing reviews in the New York Times, Bon Appétit, Esquire, and many other publications. Part II: Despite the accolades, the owners felt the maturing deli had run out of steam in 1992. Employees, frustrated by the lack of advancement opportunities, were leaving, and competitors were beginning to take a bite out of the deli's business. Saginaw and Weinzweig recognized that Zingerman's had arrived at the same crossroads as countless other small businesses: remain the same and risk stagnation, or grow aggressively and risk sacrificing the qualities that had made the deli so successful. Weinzweig in particular had detested the idea of franchising Zingerman's copies in far-flung cities where it would be difficult to maintain the firm's reputation for quality. Part III: So, after much research and debate, Saginaw and Weinzweig created the Zingerman's Community of Businesses (ZCoB), a collective of businesses, all with Zingerman's name and centralized marketing and administrative functions, but with their own products, identities, and managing partner/owner. Partner/owners and employees note that they have been drawn in by Zingerman's environment – one promoting passion for food, community, and opportunity. ZCoB today includes eight small firms and was even named Inc. Magazine's "Coolest Small Company in America." Not bad for a company in a strong growth mode while retaining all the elements that made it world famous for its unique culture, exceptional service, and products of the highest quality.Even after growing from a partnership to a multi-divisional corporation, Zingerman's had the culture of Multiple Choicea large company.a small company.a joint venture.a competitive franchise.

An owner contributes $50,000 to expand the business. This transaction wouldincrease expensesincrease capitalincrease incomedecrease income

Required informationSkip to questionHershey Foods: May Melt Your Heart This activity is important because it discusses long-term financing, which can occur through equity, or the owners' investment in an organization. Sole proprietors and partners own all or a part of their businesses outright, and their equity includes the money and assets they have brought into their ventures. Corporate owners, on the other hand, own stock or shares of their companies, which they hope will provide them with a return on their investment.The goal of this exercise is to demonstrate your understanding of ownership of public corporations. Read the case below and answer the questions that follow. Part I. Milton Hershey was not only interested in innovative candy making, he also wanted to help the members of the community. An example of his concern for the community was the founding of a home for orphan children, the Hershey Industrial Schools (now called the Milton Hershey School) in 1909. Many of the children who attended the school became Hershey employees, including former Hershey chairman William Dearden (1976–1984). Today, the 10,000-acre campus houses and provides education for nearly 2100 financially and socially disadvantaged children. While the majority of MHS students are from Pennsylvania, over 25 percent of students hail from other states. Although Hershey remains a public corporation, the Milton Hershey School Trust, which financially supports the school, owns about 30 percent of Hershey Foods' total equity. Part II. The Milton Hershey Trust also owns 100 percent of the Hershey Entertainment and Resort Company, which operates a number of Hershey’s nonchocolate properties, including the Hershey Park theme park, the Dutch Wonderland theme park for younger children, the Hershey Hotel, the Hershey Lodge and Convention Center, the Hershey Bears, a minor league hockey team, Hershey's zoo, a four-course golf club, an outdoor sports stadium, and an indoor sports arena. Part III. Because Milton Hershey's original funding was the wise investment management by the trust managers, the assets of the Milton Hershey School Trust have grown to a value of more than $12 billion, which makes the school one of the wealthiest schools in the world. Milton Hershey was a visionary in terms of using a public corporation to support his philanthropic dreams.The selling of stock generates ____________ for the firm.Multiple Choiceretained earningsloanscapitalliabilities