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Cp3 Flashcards

0
Q

Process of seeking businesses opportunities under conditions of risk

A

Entrepreneurship

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1
Q

Is independent (not part of a larger business) and has little influence it’s market

A

Small business

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2
Q

One who accepts risks and opportunities of creating and growing a new business

A

Entrepreneurship

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3
Q

Does not always have growth of the business as a primary entrepreneurial goal

A

Small Business Owner

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4
Q

The most significant recent trend in small business startup is

A

Rapid emergence of electronic commerce

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5
Q

According to SBA small business association

A

40% of all new business expect to survive for 6 years (60% do not)

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6
Q

A description of the business strategy for the new venture(risky journey and how it will be implemented

A

Crafting a Business

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7
Q

What should a business plan address?

A

Entrepreneurs goals and objectives
The strategies used to obtain (get) them
The implementation(putting the process in effect) of the chosen strategies

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8
Q

How to prepare a business plan

A

Setting goals and objectives
Sales forecasting
Financial planning
Cash budget

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9
Q

Company that allows a individual (franchisee) to run a location of their business Parent company=

A

Franchisor

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10
Q

marketing another company’s goods and services in a certain local area
Local owner=

A

Franchisee

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11
Q

Advantages of Franchising

A

Access to management expertise of franchisor
Less likely to fail then new businesses
Proven business opportunity for franchisee

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12
Q

Disadvantages of Franchising

A

Start up costs are usually high
Management rules
May be obligated to contribute a percentage of sales to Parent corporations

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13
Q

64 percent of business started in

A

Past decade

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14
Q

Examples of new business that have started in past decade

A

Wal-mart
Dell Computers
Microsoft

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15
Q

Disadvantage of starting from scratch/ a new business

A

Higher risk of business failure

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16
Q

Advantage of of starting from scratch/ new business

A

Avoides baggage of an existing business

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17
Q

Most experts recommend

A

Buying a existing business besides starting from scratch because odds of success is higher

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18
Q

Name at least three questions that need to be answered when starting a small business

A

Who and where are my customers?
How much will those customers pay for my product?
How much of my product can I expect to sell?
Who are my competitors?
Why will customers buy my product rather then the product of my competitors?

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19
Q

Most important source of money for a new business’s

A

Personal Resources

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20
Q

1 resource of funding new businesses

A

Personal resources

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21
Q

Ways of financing a small business

A

Loans from family and friends

Bank loans

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22
Q

Do not lend money

Invest for partial ownership

A

Venture Capital Companies

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23
Q

Reasons why a small business fails

A

Poor management due to poorly execute business plans
Neglect (uncared for)
Insufficient Capital (not enough money)

24
Reasons why a small business succeeds
Hard work, drive a dedication Market demand Managerial competence (mangers is successful in managing)
25
Owned and operated by one person
Sole proprietorship
26
Most common form of business organization
Corporation
27
Based on the entrepreneurs needs/desires for control, ownership participation, financing and appropriateness of the chosen form for the industry in which firm will compete
Choice of Ownership Form
28
Multiplied by the number of partner-owners
Partnership-sole proprietorship
29
Represents most businesses in US
Sole proprietorship
30
One person owns and legally operates and is responsible for the business debts
Sole Proprietorship
31
Advantages of Sole Proprietorships
``` Freedom Simple to Form Low start up costs Tax benefits Formation of cooperatives (shares profits and benfits) ```
32
Examples of Tax Benefits
Can treat profit as part of their personal financiers | Pay taxes based on their personal tax rate
33
Disadvantages of sole proprietorships
Unlimited liability Limited resources Limited fundraising capability Lack of continuity( something that doesn't stop)
34
Owners are responsible for all debts (due money) of a business
Unlimited liability
35
Advantages of a corporation
Limited liability Continuity Stronger fundraising capability
36
Disadvantages of a corporation
Double taxation of dividends (sum money paid regularly) Fluid control Complicated and expensive to form
37
The owners responsibility for debts of a business is limited to their investment in a business
Limited liability
38
Courts may seize a corporations assets(valuable things) but cannot touch the personal property of
Investors
39
Advantages of partnerships
``` More talent and money More fundraising Easy to form Limited liability for limited partners Tax benefits ```
40
Invests money but are liable for debts only to the extent of their investors
Limited partners
41
Most common type of partnership
General partnership
42
Two or more owners who share in the operation of the firm and are financially responsible for its debts
Unlimited liability for general partner
43
Disadvantages of partnerships
Unlimited liability for general partner Disagreements among partners Lack of continuity
44
An artificial being, invisible and existing only in contemplation(looking thoughtfully) of the law
Corporation
45
Account for 20 percent of US businesses but generate 90 percent of US sales revenues (income company makes)
Corporation
46
Corporations may
But hold and sell property Make and sell products Commit crimes and be punished for them Be sued
47
Examples of private corporations
UPS/Calvin Klein is not available to the general public
48
Most common form of US corporation
Private corporation
49
Has stock that is widely held and available for sale to the general public
Public Corporation
50
Example of a Public Corporation
Ralph Lauren
51
Two firms combine to create a new company
Merger
52
One firm buys another
Acquisition
53
When company A purchases company B is a example of
Acquisition
54
A firm sells one or more of its business units
Divestiture
55
A firm sells part of itself to raise capital
Spin-off
56
Issues in corporate ownership
Merger Acquisition Divestiture Spin-off
57
What are the three main decisions Amy had to make?
Location How to raise money How to structure her business
58
What kind of business did Amy had to make?
Corporation

Business Principles (10 decks)

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