Chapter 15 + 16 Deck Flashcards
In the “Marketing” section of a business plan, the ( ) section describes the proposed business’s typical business customer.
“Target Market”
The Small Business Administration offers an array of programs to help small business owners and prospective business owners. Services include all of the following except assistance in ( ).
interviewing job candidates
A small business that buys goods from other firms and sells them to consumers is known as a ( ).
retailer
The ( ) section of the business plan describes the fundamental beliefs about what is and isn’t appropriate in conducting company activities.
“Core Values”
The monthly fee that a franchisee must pay to keep the company’s trade name is called a ( ).
royalty fee
Which of the following is not an advantage of buying an existing business?
You have access to current cash flow.
The ( ) section of the business plan is designed to convince the reader that the company will be operated by well-qualified and experienced people.
“Management Plan”
The ( ) section of a business plan specifies the firm’s cash needs and explains how the owners will be able to repay its debts.
“Financial Plan”
The ( ) section of your business plan tells the reader where you will purchase products for resale.
“Goods, Services and the Production Process”
In a ( ) partnership, a single partner runs the business and any number of other partners have little involvement in it.
limited
Maria Martin owns an advertising company. She gets to keep all of the income earned by the business. She operates it as a ( ).
sole proprietorship
The number and severity of disputes between partners can be lessened if the partners have executed ( ) that specifies everyone’s rights and responsibilities.
a partnership agreement
Which of these statements is true in regard to the sole proprietorship form of business?
it makes financing more difficult
Who is considered hostile in a hostile takeover?
- the targeted company’s management
2. the targeted company’s board of directors
Which of the following is a disadvantage of the corporate form of organization?
owners and managers are not always the same people
The major problem with general partnerships is:
unlimited liability
Many people are reluctant to enter into partnerships because of ( ).
unlimited liability
As attorneys who share equal ownership, profits, and losses in their firm, Raymond James and Alexander Doss have opted for which legal form of business ownership?
partnership
A local bakery is acting as a ( ) when it sells desserts to a restaurant.
wholesaler
An ( ) is someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it.
entrepreneur
There are three characteristics of entrepreneurial activity:
- Innovation
- Running a business
- Risk-taking
A ( ) is one that is “independently owned and operated, is organized for profit, and is not dominant in its field.”
small business
The twenty-eight million small businesses in the United States generate about ( ) of our gross domestic product.
50%
An ( ) is a group of companies that compete with one another to sell similar products.
industry
The ( ) includes all businesses that produce tangible goods.
goods-producing sector
The ( ) includes all businesses that provide services but don’t make tangible goods.
service-producing sector
A ( ) a document that identifies the goals of your proposed business and explains how it will achieve them.
business plan
An ( ) is a one- to three-page overview in a business plan.
executive summary
A sole proprietorship is the most common form of business and accounts for ( ) of all U.S. businesses.
72%
A ( ) is a legal entity that’s separate from the parties who own it.
corporation
Corporations are owned by ( ) who invest money in them by buying shares of ( ).
shareholders/stock
Corporations elect a ( ) that’s legally responsible for governing the corporation.
board of directors
Corporations are taxed on their earnings so they’re subjected to ( ).
double taxation
The ( ) gives small business owners limited liability protection, but taxes company profits only once, when they are paid out as dividends. It can’t have more than one hundred stockholders.
S-corporation
A ( ) is similar to an S-corporation: its members are not personally liable for company debts and its earnings are taxed only once, when they’re paid out as dividends. But it has fewer rules and restrictions than does an S-corporation. For example, an LLC can have any number of members.
limited-liability company (LLC)
A ( ) is a business owned and controlled by those who use its services. Individuals and firms who belong to the cooperative join together to market products, purchase supplies, and provide services for its members.
cooperative
A ( ) is an organization formed to serve some public purpose rather than for financial gain. It enjoys favorable tax treatment.
not-for-profit corporation
A ( ) occurs when two companies combine to form a new company.
merger
An ( ) is the purchase of one company by another with no new company being formed.
acquisition
Companies merge or acquire other companies for the following reasons:
- to gain complementary products
- attain new markets or distribution channels
- realize more-efficient economies of scale
A ( ) is an act of assuming control that is resisted by the targeted company’s management and its board of directors.
hostile takeover
