Chapter 4 Flashcards
(25 cards)
New venture
Requested formed, organization, opened within the last 12 months, that sells goods or services
Small businesses
- owner- managed business with fewer than 100 employees
Definition may very some stats do not include unincorporated businesses with one owner and no employees
Entrepreneurship
Process of identifying an opportunity in a market place and capitalizing on it
Nascent entrepreneurship
People who start a business from scratch
Intrapreneurs
create something new witching an existing large organization.
Roles of a small business
- 98% of all employers business in Canada are small business
- main source of job creations
- leaders in innovation and new technology
The entrepreneurial process - identifying opportunities
1) generating ideas
2) screening ideals
- ideas add or create value
- idea provide a competitive advantage
- idea is marketable and financially viable
- ideals have low exit costs
3) developing the opportunity
- business plan
Accessing resources
1) bootstrapping: going more with less prefers my external resources
2) financial resources: debt, equity
3) other resources: bank of Canada (BDC), incubators, the Internet
debt
Financial institutions
Suppliers
Equity
Personal savings
Private investors
Venture capitalists
New venture start up
Growth
Stability
Decline
Demise
Alternate approches
- starting up a small business
- buying an already existing business
- taking over a family business
- buying a franchise
Family owned business challenges
1) Ongoing management
I.e which family member has control, families right to job…
2) Succession
Forms of business organizations
1) Sole proprietorship
2) partnership
3) corporation
4) cooperative
Franchising
An agreement that gives franchisees (buyers) the right to sell the product for the franchise (the seller)
Partnership
Two or more people agree to combine their financial, managerial, and technical abilities to run a business
3 basic types of partnerships
1) general partnership
2) limited partnership
3) limited liability partnership
Characteristics of a corporation
1) desperate legal entity from its owner
2) property rights and obligations
3) indefinite lifespan
Types of corporations
1) public corporation
2) private corporation
3) board of directors
- inside directors, outside directors, CEO’s
4) shareholders
Public corporation
- shares are widely help and available for sale to the general public
- initial public offering (IPOD) - the sale of shares for the first time to the general investing public
Private corporation
Shares held by a few shareholders
Board of directors
Governing body responsible for shareholders interests
- appoint management, set policy, make major decisions
Shareholders
- investors who buy shares of ownership in a company
- may share in profits through dividends
Cooperatives
Organizations formed to benefit its owners
Reduced prices and distribution of surpluses
