register with state government receive corporation charter (license) sell stock board of directors

Unit 4 Flashcards by Camille Sunshine

entrepreneur

organizes, manages and assumes risks of business in order to make a profit

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what must the entrepreneur have

an idea and a willingness to take a risk

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what must the entrepreneur do

gather factors of production, learn laws

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most common type of business

sole proprietorship

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what is sole proprietorship

business owned and operated by one person, oldest, most basic, only need licenses/fees

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how many sole proprietorships in US

23 million, 75% of businesses

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advantages of sole proprietorship

management simple
keep profits
don't have to pay separate business taxes
psychological satisfaction
easy out

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disadvantages of sole proprietorship

unlimited liability if sued
small size
difficulty attracting qualified employees

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what is a partnership

business owned and operated by 2 or more people, helps with capital or workload

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what is a limited partnership

general partner in charge, other one gives money

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joint venture

temporary partnership for a specific purpose

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advantages partnership

easy to start up
focus on expertise
taxes low
runs efficiently

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disadvantages of partnership

high liability

personality differences

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corporation

recognized by law as separate legal entity, distinct from any person, profits split among shareholders

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why incorporate

need capital, legal protection from lawsuits and bankruptcy

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corporations are how much of businesses

20%

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corporations are how much of revenue

80%

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how to form a corp

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about selling stock

if large enough, shares traded by brokerage firms and eventually on stock exchange

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about the board of directors

owners and founders select first, later stockholders select

board doesn’t run businesses it hires officers

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advantages of corporation

ease in raising capital
limited liability
board can hire pros
unlimited life
easy to transfer ownership

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disadvantages of corp

double taxation
difficulty and expense of getting charter
separation of ownership and management
government regulation

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what is a franchise

hybrid form of businesses that involves renting another firm’s business model
fast food, operated by network of independent franchisees

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advantages of franchise

known name
advice
free advertising
cheap to expand

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disadvantages of franchise

no progress | can't control everything

starbucks

not a franchise | 23768 stores

injunction

government stops protests

arbitration

both sides agree to have neutral party make final decision

mediation

neutral party works to get labor and management to agree

collective bargaining

process by which unions and employees negotiate conditions of employment

agency shop

all employees pay union dues

wage restrictions

why wages can't remain too high or too low

factors of demand

skill job type location

union shop

new employees must soon join, sometimes outlawed

closed shop

companies can only hire union members outlawed

wage restrictions

employees don't know what they could get and employers don't know what they would accept minimum wage laws labor unions

skill categories

``` blue collar white collar service unskilled semiskilled skilled professional ```

civilian labor force

US Bureau of Labor Statistics - those who have jobs look for jobs at least 16 not in military or institutionalized

how many are unionized

1/9

union workers are mostly

african American men over 45 working full-time in the government

big act to know

Taft Hartley Act of 1947

unemployment in the depression

25%

company union

unions organized and supported by employers

which are employer tools

lockout strike breaking company unions

craft union

all in same field

industrial union

all in same business ondifferent levels

First union

NYC printers 1778

first threat to unions

immigrants

view of unions

courts didn't like them | they got better in the depression but as unions got mean people stopped liking them

how much of price is marketing

50%

marketing

all activities needed to move goods and services from producer to consumer (includes research, ads, promo)

types of donors

incubator venture capitalist angel investor crowd funding

crowd funding

using social networking to appeal to potential investors

angel investors

wealthy and generous, 1 time injection

venture capitalist

shark tank | fund, expertise or money in exchange for partial ownership

incubator

funded by universities,government, can get training funds and other

multinational

large corp that operates and pays taxes in multiple countries

merger

2 or more businesses become 1

types of mergers

horiz and vert

reasons for mergers

faster growth, reduced costs, diversification, and elimination of rivals

net income

funds left over after expenses are subtracted from sales

cash flow

reward shareholders and owners reinvest in the business to make it grow

investment

costs include inventory, wages, salaries, taxes, interest, depreciation

7 pitfalls

``` You start your business for the wrong reasons Poor Management Insufficient Capital Location, Location, Location Lack of Planning Overexpansion No Website ```

Unit 4 Flashcards

(64 cards)