lists chapter 6,7,8 Flashcards
what are the 6 advantages to a sole proprietorship?
easy and inexpensive to form
profits are retained by the owner
direct control of the business
freedom from government regulation
taxed once
ease of dissolution
what are the 7 disadvantages of a sole proprietorship?
unlimited liability
difficulty raising capital
limited managerial expertise
trouble finding qualified employees
personal time commitment
unstable business life (limited lifespan)
losses are the owners responsibility
few fringe benefits
what are the 3 forms of partnerships?
general partnership
limited liability partnership
limited partnership
what are the 6 advantages of a partnership?
more financial resources
shared management and pooled, complementary skills and knowledge
longer survival
shared risk
special taxes
flexibility
what are the 5 disadvantages of a partnership?
unlimited liability
division of profits
disagreements among partners
difficulty of termination
possibility of higher taxes
what are the 5 types of corporations?
private
public
non-profit
professional corporations
crown corporations
what are the 7 advantages to a corporations?
limited liability
more money for investment
size: may be larger due to increased resources
perpetual life
ease of ownership change
ease of attracting talented employees
separation of ownership from management
what are the 6 disadvantages of corporations?
high initial costs
extensive paperwork
double taxation
two tax returns
termination is difficult
stock holder and board conflict
what are the 5 ways of corporate expansion?
a merger
an acquisition
a vertical merger
a horizontal merger
a conglomerate merger
what are the four reasons why mergers do not work?
companies overpay to acquire another firm
acquiring company overestimates cost saving and synergies
after merger, managers disagree about integrating operations
after merger, cost cutting obsession hurts business
what are the 6 things the franchisee agrees to in the franchise agreement?
to follow the franchisor’s operating rules
keeping inventory at certain levels,
buying a standard equipment package,
keeping up sales and service levels
taking part in franchisor promotions
maintaining relationship with the franchisor
what are 5 things the franchisor agree to in a franchise agreement?
franchisor provides the use of a proven company name and symbols
provides training
provides management assistance
provides employee training
provides financial assistance
what are the 5 responsibilities of a franchisor?
assign territory
may provide financial aid/advice
offers merchandise or supplies at a competitive price
provides training and support
business expansion
what are the 4 responsibilities of a franchisee?
pay upfront costs
make monthly or annual payments to the franchisor (royalty fee)
runs business by franchisors rules and procedures
buys materials from franchisor or approved supplier
what are the 5 advantages to franchises?
management and marketing assistance
personal ownership
nationally recognized name
financial advice and assistance
low failure rate
what are the 6 disadvantages to franchises?
large start up cost
shared profit
management regulations
coattail effect
restrictions on selling
fraudulent franchisors
what are the 4 ways to avoid disaster in a franchise?
research officers and their business experience
get all summary of any bankruptcy and litigation
estimate ALL costs to set up a franchise
review franchise contract and three most recent financial statments
what are the 4 ways entrepreneurial ventures differ from small business?
amount of wealth creation
speed of wealth creation
risk
innovation
what are the 6 reasons people take the entrepreneurial challenge?
opportunity presents itself (to fill a customers needs, or they have a skill or resources)
new idea, product or product
profit
challenge
family pattern
independence
what are the four types on entrepreneurs?
classic entrepreneurs
micropreneurs
multipreneurs
intrtapreneurs
what are the 5 reasons small business is important?
contribute to growth in specific areas of the economy
create jobs
spark innovation
best route to success
compliment the economic activity of large organizations by providing them with services
what are 10 potential small businesses?
home renovation services
pet products and services
catering services
cleaning services
events management services
E-commerce
beauty services
sewing and alteration services
business/life coach services
online course creators
what are the 7 advantages of a small business?
independence
personal satisfaction from work
best route to success
rapidly changing technology
major corporate restructuring and downsizing
outsourcing
small business are resilient
what are the 5 disadvantages of small business?
financial risk
stress
time commitment
undesirable duties
limitations
what are the 3 causes for small business success?
pay attention to competition
business in a growth industry
product is not easily replicated
what are the 12 things that can lead to small business failure?
plunging in without first testing testing the waters on a small scale
underpricing or overpricing goods or services
underestimating how much time it will to take to build a market
staring with too little capital
starting with too much capital and being careless in its use
going in to business with little or no experience and without first learning something about the industry or market
borrowing money without planning how and when to pay it back
not allowing for setback and unexpected setbacks
buying to much on credit
extending credit to freely
expanding credit too rapidly
failing to complete accurate records
what are the four ways to get into your first business venture?
start your own company
buy an existing franchise unit
inherit or take over a family business
get some experience from another company
what are the five functions of managing a small business?
planning the business
financing the business
knowing the customers (marketing)
managing the employees
maintaining records (accounting)
what are the details (4) of a written business plan?
nature of the business
target market
advantages the business will have over competition and the resources
qualifications of the owners
what are the 10 key elements of a business plan?
cover letter
executive summary
company background
management team
financial plan
capital required
marketing plan
location analysis
manufacturing plan
appendix
what are the three basic categories of managerial skills?
technical
human relations
conceptual skills
what are the 4 functional areas of management?
planning
organizing
leading
controlling
what are the three things that are in a company vision?
goals
objectives
plans
what is a SWOT analysis?
how strengths can be capitalized on
how weakness can be improved
how opportunities can be exploited
how strengths can be mitigated
what are the 4 planning strategies?
strategic planning
tactical planning
operational planning
contingency planning
what are the 5 steps in the decision making process?
recognize or define the problem or opportunity
gather information to identify alternative solutions or actions
select one or more alternatives after evaluating the strengths and weakness of each possibility
put chosen alternative into action
gather information to obtain feedback on the effectiveness of the chosen plan
what are the 4 intrinsic values leaders are motivated?
needs
desires
motive
will power
what are the 5 kinds of power?
legitimate power
reward power
coercive power
expert power
referent power
what are the three leadership styles?
autocratic
participative/ democratic
free rein
what are the 5 steps of the controlling function of management?
establish clear performance standards
monitor actual performance
compare performance results against plans and standards
communicate results to the employees involved
take corrective action when needed and provide positive feed back
what is the difference between the intent of small business and the intent of entrepreneurship?
small business is fine remaining small and does try to innovate and grow to become a larger company or corporation
entrepreneurship may start small but the intention is to grow to a large scale company corporation and revolutionize the market
what is management?
the process of guiding the development and allocation of resources to attain organizational goals
