Chapters 5-6: Starting And Structuring A Business

Question 1

What is a small business?

Answer 1

Independently owned and operated, not dominant in a field and less that 500 employees.

Question 2

What is the SBA?

Answer 2

Small Business Administration

Question 3

What does the SBA do?

Answer 3

Aid, counsel, assist, and protect the interests of small businesses`

Question 4

What is an Entrepreneur?

Answer 4

Someone who assumes the risk of creating, organizing, and operating a business

Question 5

What is a Lifestyle Entrepreneur?

Answer 5

Look for businesses that matches their desired lifestyle

Question 6

What is a Micropreneur?

Answer 6

Satisfied with keeping the business small to achieve a balanced lifestyle

Question 7

What is a Home-based Entrepreneur?

Answer 7

Run their businesses out of their homes

Question 8

What is an Internet Entrepreneur?

Answer 8

Run their businesses strictly online

Question 9

What is a Growth Entrepreneur?

Answer 9

Strive to create fast growing businesses and look forward to expansion

Question 10

What is a Social Entrepreneur?

Answer 10

Start businesses with a social mission in mind

Question 11

What is a Intrapreneur?

Answer 11

Ones who work in an entrepreneurial way with-in organizations owned by other people

Question 12

What is a serial entrepreneur?

Answer 12

Create and grow many different businesses over their business career

Question 13

What is a Franchise?

Answer 13

Sells a company’s products or services under the company’s name to independent third party operators

Question 14

What is a Business Plan?

Answer 14

Outlines the goals and strategies of a company including its marketing plans financial forecast, risk analysis, and operational plan

Question 15

What is S.C.O.R.E?

Answer 15

Volunteers provide free assistance b viewing business plans, helping with tax planning, and offering new ideas and fresh insights.

Question 16

What are Business Incubators?

Answer 16

Support start up businesses by offering resources such as administrative, technical and networking sources

Question 17

What are advisory boards?

Answer 17

Offer guidance to new business owners, but they generally do not have authority to make decisions

Question 18

What are enterprise zones?

Answer 18

Geographic areas targeted for economic revitalizing by state and federal governments

Question 19

What are Grants?

Answer 19

Financial awards offered by federal and state governments and some private organizations

Question 20

What is an Angel Investor?

Answer 20

Wealthy individuals who are looking to invest in interesting businesses with good prospects for growth and returns

Question 21

What is a Venture Capitalist?

Answer 21

Invest in a business in return for some form of equity or ownership in the business

Question 22

What is a Sole Proprietorship?

Answer 22

Business owned and usually operated by a single individual

Question 23

What are some advantages of a Sole Proprietorship?

Answer 23

No formal legal requirements for starting, and revenues and expenses are reported directly on the business owners personal tax return

Question 24

Name a disadvantage of Sole Proprietorship?

Answer 24

Personal and business assets are at risk in the event of a business catastrophe

Question 25

What is a Partnership?

Answer 25

Business structure where two or more individuals share aspects of the business including its financial management and sales and marketing. Income and expenses flow directly through each partners tax return

Question 26

What is a Partnership Agreement?

Answer 26

Formal document that outlines the responsibilities of each partner and how the business's profits will be divided and disputes will be settled

Question 27

What is a General Partnership?

Answer 27

Arrangement in which all partners have equal liability

Question 28

What is a Limited Partnership?

Answer 28

Some partners do not participate in the daily ops of the business and liabiliy is limited to the amount of capital they contributed

Question 29

What is a Limited Liability Partnership? (LLP)

Answer 29

Protect partners from any debt or liability incurred by a business as well as each partner from the liability of another partner

Question 30

What is a Corporation?

Answer 30

Businesses structured as separate legal entities

Question 31

What is a CEO?

Answer 31

Chief Executive Officer

Question 32

What are the duties of the CEO?

Answer 32

Responsible for the entire operations of the corporation and reports directly to the board of directors

Question 33

What is a CFO?

Answer 33

Chief Financial Officer

Question 34

What are the duties of the CFO?

Answer 34

Reports directly to the CEO and is responsible for analyzing and reviewing the businesses financial data

Question 35

What is COO?

Answer 35

Chief Operating Officer

Question 36

What are the duties of a COO?

Answer 36

Responsible for the day-to-day operations of the organization and reports directly to the CEO

Question 37

What are First-line Managers?

Answer 37

People who directly supervise lower-level employees and help run the business

Question 38

What is a S Corporation?

Answer 38

Have shareholders and must comply with all other regulations involving traditional C Corporations

Question 39

What is a C Corporation?

Answer 39

Under IRS Sub-chapter C and can be structured as a S Corporation

Question 40

What is a Limited Liability Company? (LLC)

Answer 40

Offers the protections of limited liability like an S Corporation does but have a unlimited member base

Question 41

What is a Not-for-Profit Organization?

Answer 41

Corporations whose purpose is to serve the public interest rather that to seek to make a profit

Question 42

Define Cooperatives.

Answer 42

Businesses that are owned not by outside investors but are governed by members who use its products and services

Question 43

What is Synergy?

Answer 43

Effect achieved when two companies combine and the result is better that each company could achieve individually

Question 44

What is Acquisition?

Answer 44

Occurs when one company buys another outright

Question 45

What is a Merger?

Answer 45

Occurs when two or more companies of similar size mutually agree to combine to form a new company

Question 46

What is a Horizontal Merger?

Answer 46

Two companies that share the same product lines and are in direct competition with each other merge

Question 47

What is a Vertical Merger?

Answer 47

Two companies that have a company/customer relationship or a company/supplier relationship merge

Question 48

What is a Product Extension Merger?

Answer 48

Two companies selling different but related products in the same market merge

Question 49

What is a Market Extension Merger?

Answer 49

Two companies that sell the same products in different markets merge

Question 50

What is a Conglomeration?

Answer 50

Two companies that have no common business areas merge to obtain diversification