Ch 12 Flashcards
The process of starting a new business
entrepreneurship
A conventional or basic form of corporate organization
C corporation
A hybrid entity that is organized like a corporation, with stockholders, directors, and officers, but taxed like a partnership, with income and losses flowing through to the stockholders and taxed as their personal income
S corporation
A hybrid organization that offers the same liability protection as a corporation but may be taxed as a partnership, corporation, or as part of its owner’s tax return
LLC
A legally recognized for-profit corporate entity specifically created to offer a benefit to the public
Benefit corporation
The process of combining two companies, resulting in only one entity remaining
merger
The process of buying another company, thus resulting in the sold company becoming owned by the buyer (parent company)
aquisition
A problem-solving method that encourages people to engage in a step-by-step process to develop and refine ideas before taking them to market
Design thinking.
Empathize
Define
Ideate
Prototype
Test
A business with under 500 employees that is independently managed, owned by an individual or a small group of investors, based locally, and not a dominant company in its industry
Small business
Employees who apply their creativity, vision, and risk-taking within a large corporation, rather than starting a company of their own
Intrapraneuer
A formal written statement that describes in detail the idea for a new business and how it will be carried out in nine parts; includes a general description of the company, the qualifications of the owner(s), a description of the product or service, an analysis of the market, and a financial plan
Business plan
This element of a business plan provides an overview of the total document. This is written after the other sections are completed, as it highlights significant points and (ideally) creates enough excitement to motivate the reader to keep reading
Executive summary
This element of a business plan states an organization’s purpose, reason for existing, and describes its basic philosophy
Vision and mission statement
This element of a business plan explains the type of company that is envisioned, provides background information on the company if it already exists, and includes the proposed form of organization
Company overview
This element of a business plan describes the product and/or service and points out any unique features, as well as explains why people will buy the product or service
Product and/or service plan
This element of a business plan shows who the firm’s customers will be and what type of competition it will face; outlines the marketing strategy and specifies the firm’s competitive edge; and describes the strengths, weaknesses, opportunities, and threats of the business.
Marketing plan
This element of a business plan identifies key players—active investors, management team, board members, and advisors—citing their experience and competence
Management plan
This element of a business plan explains the type of manufacturing or operating system to be used and describes facilities, labor, raw materials, and processing requirements
Operating plan
This element of a business plan specifics the financial needs and contemplated sources of financing, as well as presents projections of revenues, costs, and profits
financial plan
This element of a business plan provides any materials that supplement the full plan
Appendix of supporting documents
A business that is established, owned, operated, and often financed by one person
Sole prop
An association of two or more individuals who agree to operate a business together for profit
Partnership
A partnership in which all partners share in the management and profits; each partner can act on behalf of the firm and has unlimited liability for all its business obligation
General partnership
A partnership with one or more general partners, who have unlimited liability, and one or more limited partners, whose liability is limited to the amount of their investment in the company
Limited partnership
A partner within a business who has unlimited liability
General partner
A business partner whose liability is limited to the amount of their investment
Limited partner
Similar to a general partnership except that partners are not held responsible for the business’s debt and liabilities
Limited liability partnership
Basically, a limited partnership that extends limited liability to all partners, hence protecting the general partner from the partnership’s debt and liabilities
Limited liability limited partnership
A legal entity with an existence and life separate from its owners, who are not personally liable for the entity’s debts. A corporation is chartered by the state in which it is formed and can own property, enter into contracts, sue and be sued, and engage in business operations under the terms of its charter
Corporation
