Business Test2 Flashcards
Define: partnership
Business is owned and controlled by two or more people.
Responsibilities and distribution of profits/losses are outlined in partnership agreement.
Define: Corporation
Corporation is a separate legal entity from it’s owners. A corporation often has shareholders who own stock. These people own a small percentage of the business but don’t run the business.
Define: loan
Borrowing money to start a business and having to pay interest.
Define: investor
Someone who gives you money to start or grow a business but takes a percentage of your business
Define: entrepreneur
Individual who comes up with new business ideas and takes the risk to start a new business
Define: producers
Producers create the products and services used by individuals and other businesses
Name the two type of producers
Extractor-takes resources from nature such as mining, timber, oil, farming
Manufacture- get supplies from other producers and convert them into products such as automotive companies, construction businesses etc
Define: intermediaries
Intermediaries- businesses involved in selling goods/services from producers. They don’t make the product, they just buy it and resell it.
Define: service businesses
Businesses that offer an intangible service, they do not sell a product. Examples include dentist, doctors, lawyers, painters, etc
Names the three types of businesses
Producers
Intermediaries
Service businesses
Define: Mission statement
Short, specific statement of the reason a business exist and what it wants to achieve.
Define:Goals
Precise statement of results a business wants to achieve. Goals can be used to judge whether a business is successful or unsuccessful.
Define: policies
Guidelines used to make consistent decisions
Example: policies might include guidelines within the business (coming to work late, raises, etc) or outside the business (dealing with costumers-refunds complaints, etc)
Define: procedures
Descriptions of the way work should be done.
Example: a procedure for subway might be: what order you put meat and vegetables on the sandwich
Define: responsibility
All employees understand their responsibilities and what is expected of them
Define-authority
All employees know they can make decisions as to how to accomplish their responsibilities
Define-accountability
all employees are held responsible for their actions
Define unity of demand
Clear reporting relationship for all employees
Define-span of control
Number of employees assigned to a certain task and manager
Define-organizational chart
Diagram that shows the structure of the business, how jobs are classified, and the relationship among employees.
Two types:
Functional structure
Matrix structure
Define- functional structure
People with jobs related to one another work together (all accountants work together, all sales people work together)
Define: matrix structure
Employees are organized around specific projects or customers instead of by job titles.
Define: business plan
Written description of the business idea, how it will be carried out, including all major business activities
Define: Sole Proprietorship
Business is owned and controlled by one individual. Most common form of business structure.
Define: target market
the consumers at which a product is aimed (ex. College students, young families, women over the age of 50, etc.)
Key characteristics to identify about your target market:
- demographics (age, gender, ethnicity, income, etc.)
- size and location of target market
- lifestyle
- needs/wants → are they being met?
- is your product/service a need/want?
- any seasonal/cyclical trends?
Define-marketing
the actions of promoting or advertising your product/service
Brand Awareness –
Brand Awareness – the extent to which a brand is recognized by potential customers
What are the six business activities?
- Generating ideas
- Raising capital
- Employing and training personnel
- Buying goods and services
- Marketing goods and services
- Maintaining business records
Explain: generating ideas
Businesses must begin with a new idea or a better way of doing something (price, quality, convenience, etc.)
Explain more about what it means to raise capital:
6 business activities
Businesses need financial resources ($$$) to operate and pay for day to day needs.
A large amount of money is needed to start a business – loans or investors
Money is needed to keep a business running
Tell more about employing and training personnel:
6 business activities
Businesses need well-trained human resources to succeed.
Most businesses have procedures for recruiting, hiring, and training employees.
Types of training – 1) On the Job Training, 2) Computer Training, 3) Training Center, 4) Orientation
Explain more about buying goods and services
Six business activities
All businesses buy goods and services. Some are used within the business and others are resold.
Tell about marketing goods and services
Marketing refers to activities that a business uses to advertise their goods or services
What types of advertising are there? Which do you think are most effective?
TV, infomercial, radio, print (newspaper/magazine), billboards/signs, email, direct mail, internet, social media, in-store
Explain more about maintaining business records
Six business activities
All businesses must have some sort of recordkeeping system
Records to keep track of:
- income/expenses/wages (required)
- performance
- past decisions
- sales/marketing results
What does a SMART goals stand for?
Specific Measurable Attainable Relevant Time-oriented
Describe more about the SMART goals
Does anyone know what the acronym SMART stands for?
Specific – Goals are well-defined and focused
Measureable – How much? How many? Easy to answer yes/no
Attainable – goal is not set too high or too low
Relevant – choosing goals that matter to the business
Time-Oriented – set a target date for goals
Understand: about ideas, business experience, and experience managing people
A successful business begins with an idea and previous experience
- hobbies
- interests
- business experiences
Managing people (employees) is a critical past experience that can help a new business owner succeed
Understand about team approach in running a business
Many people who start a new business want to be independent, but a team approach is critical to success
•Employees •Assistance from outside sources -bankers -lawyers -accountants
Understand about right time and place
Finding the right place and time to open a new business is critical
Place can have two meanings
- city or rural area where you start your business
- location within the town or rural area
Timing – successful businesses start when the demand for their product/service is high
Understand about preparation and research
Enough information needs to be gathered to make good decisions about the business
- saves time and money later
- helps avoid problems
-information is available on the internet, through libraries, from universities, and small business assistance centers
Name the six keys to starting a successful business
Idea Business experience Experience managing people Right place and time Team approach Preparation and research
Name four different parts of the business outline
Vision and mission.
a. Mission statement and goals
Market analysis
a. Who will buy your goods and services? Is it a want or a need
b. What’s your businesses target market?
Organizational chart
a. Who are your employees and managers?
b. What does your organizational chart look like
Marketing plan.
a. The four P’s of marketing- price, product, promotion, place
What is the four P’s of marketing/ marketing mix ?
1) Product
2) Price
3) Place
4) Promotion
