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SOM 122 Midterm > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

Small Business Association

A

government agency charged with assisting small businesses

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2
Q

small business

A

independently owned business that has relatively little influence in its market

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3
Q

entrepreneurs

A

businessperson who accepts both risks and opportunities involved in creating and operating a new business

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4
Q

entrepreneurship

A

process of seeking business opportunities under conditions of risk

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5
Q

established markets

A

one in which many firms compete according to relatively well defined criteria

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6
Q

niche

A

a segment of a market that is not currently being exploited

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7
Q

first mover advantage

A

any advantage that comes to a firm because it exploits an opportunity before any other firm does

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8
Q

business plan

A

document in which the entrepreneur summarizes their business strategy for the proposed new venture and how the strategy will be implemented

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9
Q

franchise

A

arrangement in which a buyer (franchisee) purchases the right to see the product of the seller (franchiser)

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10
Q

venture capital companies

A

group of small investors who invest money in companies with rapid growth potential

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11
Q

small business investment company

A

government regulated investment company that borrows moment from the SBA to invest in or lend to a small business

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12
Q

Small Business development center

A

consolidates information from various disciplines and makes it available to small businesses

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13
Q

sole proprietorship

A

business owned and usually operated by one person who is responsible for all debts

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14
Q

unlimited liability

A

legal principle holding owner responsible for paying off all debts of a business

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15
Q

general partnership

A

business with two of more owners who share and operate the firm and financial responsibly for debts

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16
Q

silent partner

A

invests all the funds needed but plays no managerial role

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17
Q

sweat equity

A

the partner who invests no money, gradually gains ownership via labor

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18
Q

limited partnership

A

consists of limited partner and a general/active partner

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19
Q

limited partner

A

partner who does not share in a firm’s management and is liable for its debts only to the limits of said partner’s investment

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20
Q

general/active partner

A

partner who actively manages a firm and has unlimited liability

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21
Q

corporation

A

business that legally is considered an entity separate from its owners and is liable for it sown debts; owner’s liability extended to the limits of their investments

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22
Q

limited liability

A

investors are liable for a firm’s debts only to the limits of they personal investments in it

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23
Q

tender offer

A

offer to buy shares made by a prospect buyer directly to target a corporation’s shareholders who then make individual decisions about where to sell

24
Q

double taxation

A

taxes may be payable both by a corporation’s profits and by shareholders on dividend incomes

25
Q

closely/privately held corporation

A

stock is held by only a few people and it is not for sale to the general public

26
Q

publicly held corporation

A

stock is widely held and available for sale to the general public

27
Q

S Corpoation

A

hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes

28
Q

limited liability corporation

A

hybrid of publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability

29
Q

professional corporation

A

allows professionals to take advantage of the benefits of a corporation while granting limited business liability and unlimited professional liability

30
Q

multinational corporation

A

(translational) spans over national borders

31
Q

corporate governance

A

roles of shareholders, directors, and all other managers in corporate decision making and accountability

32
Q

stockholders

A

owners of shares of stock in a corporation

33
Q

board of directors

A

governing body of a corporation that report its shareholders and delegates power to run its day to day operations while remaining responsible of sustaining assets

34
Q

officers

A

top management team of a corporation

35
Q

strategic alliance

A

strategy in which two of more organization collaborate on a project for mutual gain

36
Q

joint venture

A

strategic alliance in which the collaboration involves joint ownership of the new venture

37
Q

employed stock ownership plan

A

arrangement where corporation hold its own stock in toys t for its employees who gradually receive ownership of the sock and control its voting rights

38
Q

institutional investors

A

large investors such as mutual funds or pension funds that purchase large blocks of corporate stock

39
Q

merger

A

union of two corporations to form a new corporation

40
Q

acquisition

A

purchase of one company by another

41
Q

divestiture

A

strategy whereby a firm sells one or more of its business units

42
Q

spin-off

A

strategy of setting up one or more corporate units as new independent corporations

43
Q

measurements of small business contributions

A

job creation
innovation
contribution to big business

44
Q

popular areas of enterprise for small businesses

A 
services
retail
construction
wholesale
finance and insurance
manufacturing
transportation
other
45
Q

characteristics of an entrepreneur

A 
resourceful
concern for good
desire to be own boss
deals well with uncertainty and risk
passionate
46
Q

distinctive competencies

A

identifying niches in established markets
identifying new markets
first mover advantage

47
Q

parts of business planning

A

setting goals and objectives
sales forecasting
financial planning

48
Q

ways to start a small business

A

buy an existing small business
franchising
start up

49
Q

how to finance

A 
family, friends savings, lending institutions, investors, government agencies
venture capital comptines
SBIC
SBA programs
SBDC
overseas investors
the internet
50
Q

facts of small business start ups

A 
ecommerce
crossover from big businesses
opportunities for women and minorities
global and foreign opportunities
better survival rates
51
Q

reasons for small business failure

A

managerial incompetence
neglect
weak control
INSUFFIICIENT CAPITAL

52
Q

reasons for success

A 
hardwork
drive
dedication
the market demand is there
managerial competence
luck
53
Q

types of business ownership

A

sole proprietorship
partnership
corporation
cooperative

54
Q

types of corporations

A 
Closely held
Publicly held
S Corp
LLC
Professional 
Multinational
55
Q

3 levels of corporate management

A

stockholders
board of directors
officers

SOM 122 Midterm (6 decks)

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