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Business Principles > Cp3 > Flashcards

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
Q

Reasons why a small business succeeds

A

Hard work, drive a dedication
Market demand
Managerial competence (mangers is successful in managing)

25
Q

Owned and operated by one person

A

Sole proprietorship

26
Q

Most common form of business organization

A

Corporation

27
Q

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

A

Choice of Ownership Form

28
Q

Multiplied by the number of partner-owners

A

Partnership-sole proprietorship

29
Q

Represents most businesses in US

A

Sole proprietorship

30
Q

One person owns and legally operates and is responsible for the business debts

A

Sole Proprietorship

31
Q

Advantages of Sole Proprietorships

A 
Freedom 
Simple to Form 
Low start up costs 
Tax benefits 
Formation of cooperatives (shares profits and benfits)
32
Q

Examples of Tax Benefits

A

Can treat profit as part of their personal financiers

Pay taxes based on their personal tax rate

33
Q

Disadvantages of sole proprietorships

A

Unlimited liability
Limited resources
Limited fundraising capability
Lack of continuity( something that doesn’t stop)

34
Q

Owners are responsible for all debts (due money) of a business

A

Unlimited liability

35
Q

Advantages of a corporation

A

Limited liability
Continuity
Stronger fundraising capability

36
Q

Disadvantages of a corporation

A

Double taxation of dividends (sum money paid regularly)
Fluid control
Complicated and expensive to form

37
Q

The owners responsibility for debts of a business is limited to their investment in a business

A

Limited liability

38
Q

Courts may seize a corporations assets(valuable things) but cannot touch the personal property of

A

Investors

39
Q

Advantages of partnerships

A 
More talent and money
More fundraising 
Easy to form
Limited liability for limited partners  
Tax benefits
40
Q

Invests money but are liable for debts only to the extent of their investors

A

Limited partners

41
Q

Most common type of partnership

A

General partnership

42
Q

Two or more owners who share in the operation of the firm and are financially responsible for its debts

A

Unlimited liability for general partner

43
Q

Disadvantages of partnerships

A

Unlimited liability for general partner
Disagreements among partners
Lack of continuity

44
Q

An artificial being, invisible and existing only in contemplation(looking thoughtfully) of the law

A

Corporation

45
Q

Account for 20 percent of US businesses but generate 90 percent of US sales revenues (income company makes)

A

Corporation

46
Q

Corporations may

A

But hold and sell property
Make and sell products
Commit crimes and be punished for them
Be sued

47
Q

Examples of private corporations

A

UPS/Calvin Klein is not available to the general public

48
Q

Most common form of US corporation

A

Private corporation

49
Q

Has stock that is widely held and available for sale to the general public

A

Public Corporation

50
Q

Example of a Public Corporation

A

Ralph Lauren

51
Q

Two firms combine to create a new company

A

Merger

52
Q

One firm buys another

A

Acquisition

53
Q

When company A purchases company B is a example of

A

Acquisition

54
Q

A firm sells one or more of its business units

A

Divestiture

55
Q

A firm sells part of itself to raise capital

A

Spin-off

56
Q

Issues in corporate ownership

A

Merger
Acquisition
Divestiture
Spin-off

57
Q

What are the three main decisions Amy had to make?

A

Location
How to raise money
How to structure her business

58
Q

What kind of business did Amy had to make?

A

Corporation

Business Principles (10 decks)

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