Operating A Business Test 3 Flashcards
Uneventful protection for a small business or small business owner
in regards to monetary compensation in the event that a business &/or
personal peril is experienced.
Insurance
Identify business risk to be…
covered
obtain coverage for…
major potential
losses.
Insurance Planning (Risk to consider)
Loss / Damage to property Vehicles / rolling stock Loss of income resulting from business interruption Burglary / Robbery Extensive loss from bad debts Liability to employees Financial hardship Liability to public shoplifting / loss through dishonest employees Death of Key employees Riots / Civil disobedience
life insurance that protects a firm against losses
due to the death of a key person.
Key Person Insurance
insurance on a owner that will supply money for a
partner to buy his share upon death
Buy – sell Insurance
examples of insurance (including but not limited to)
Key-Person Insurance
Buy-Sell Insurance
Protects financial losses
incurred by producers / sellers of goods or services due to injury or damage
resulting fro use of said product.
Product Liability / Malpractice Insurance
insurance that provides monetary benefits to a
business that has experienced an unforeseen peril such as a flood or fire.
Casualty Insurance
Types of insurance
Product Liability / Malpractice Insurance Whole Life Casualty Insurance Universal Life Term Life Insurance
buy for a period of time, dissolves at end of time
period unless renewed.
Term Life Insurance
Refers to efforts designed to preserve assets and earning power associated with a business
Risk Management
Risk Management Considerations
Eliminate risks
Minimize risks
Shift the risk
Absorb the risk
remove the cause (security and/or neighborhood
watch.
Eliminate Risk
good management (morale, pricing, promotions).
Minimize Risks
purchase outside insurance…….to cover the business in regards to monetary compensation in the event that peril is experienced. . . . . business or personal.
Shift the Risk
Percentages of earnings as a
contingency for possible future losses; (property, workers comp. medical).
Absorb the risk (sole insurance)
Those, over a relevant range, which do not change but becomes progressively smaller on a per-unit basis as volume increases.
Likewise, these do not decrease with increased business, nor do they decrease with declining business activity.
Fixed Expenses
Fixed Expenses - examples:
Rent Salaries Depreciation Insurance Debt
That cost which is uniform per unit but fluctuates in
total in direct proportion to change in the related activity or volume.
Variable Expenses
Variable Expenses - example:
Supplies - pins, paper, etc. Hourly wage expense Repairs Utilities Taxes
Any cost not specifically associated with production of identifiable products and services. The cost to open the doors.
.
Overhead
The point at which total sales revenue equals total cost.
Break even point
Break Even Point may also be referred to as…
break even analysis
Expense Classification is usually based on the industry standard.
Cost Control
likewise compared to the industry standard. Best defined as profit on each item of expense in the income statement expressed as a percentage
of sales income.
Operating Ratios
Examples of Ratio Utilization
Total operating expense ratio. Net worth - Gross - Employee wage ratio. Proprietor’s wage. Advertising expense.
before deductions.
gross
after deductions.
net worth
people who are willing to invest in a risky business
Angels
document that lists the major responsibilities
& task of a specific position. Find the right person for the job and retain them.
Job description
process for determining the critical components of a job for purposes of selecting, training, and rewarding personnel
job analysis
COMPONENTS OF A JOB DESCRIPTION
Job description Effective date Supervisory person salary range Qualifications Responsibilities
the ONLY thing that is optional in a job description is…
salary range
A document that lists knowledge, skills, abilities and personal characteristics
a job holder must possess to perform effectively.
JOB SPECIFICATION
RECRUITMENT & SELECTION
Factors to consider
Labor Market – Supply & Demand Demographics Wages / Benefits Identity of the organization Security & potential for advancement Environmental conditions Responsibilities Experience requirements
Title VII of the Civil Rights Act of 1964, amended in 1972 and amended again in 1978 by the Pregnancy Discrimination Act
• Jurisdiction: employers &/or unions with 15 or more employees,
employment agencies, union hiring halls, institutions or higher
learning, federal, state and local governments
FEDERAL LEGISLATION / Affecting Employment
FEDERAL LEGISLATION CIVIL RIGHTS 1964, 1972, 1978
FEDERAL LEGISLATION CIVIL RIGHTS 1964, 1972, 1978
• outlaws discrimination in employment based on
race, color, religion,
sex, pregnancy or national origin.
• Outlaws discrimination in employment against those over 40 years old.
• Jurisdiction: Employers and unions with 25 or more employees;
employment agencies; federal, state and local governments.
Age Discrimination Employment Act 1967
• Outlaws discrimination in pay based on the sex of the worker.
• Jurisdiction: Employers engaged in interstate commerce and most
employees of federal, state, and local governments.
Equal Pay Act 1963
• Outlaws discrimination in employment based on handicaps of employees who, with practical accommodation could do the job.
• Jurisdiction: Covers federal government contractors with contracts of
$2,500 or more.
Rehabilitation Act 1973
- Outlaws discrimination in employment against Vietnam era veterans
- Jurisdiction: Covers Federal Government contractors with contracts of $ 10,000 or more
Vietnam Era Veterans Readjustment Act (1974)
- Outlaws non documented persons from employment in the United States
- Jurisdiction: Covers all employers
Immigration Reform Act (1986)
- Prohibits discrimination against any qualified individual with a disability…… mental or physical
- Jurisdiction: Covers firms with 15 or more employees
Americans with Disabilities Act (1990)
- Outlaws discrimination practices in pay: to pay a minimum wage of one and one-half of the regular wage for hours beyond 40 hours
- Jurisdiction: All business are covered under Federal/or State Legislation
Fair Labor Standards Act (Wage & Hour Law)
Employment application process
vital info
employment history
info which will determine qualifications
A qualification that is absolutely necessary for the job. . . . it is an allowed and approved reason for discrimination.
Bona Fide Occupational Qualification (BFOQ).
(BFOQ).
Bona Fide Occupational Qualification
Types Employment Interviews
Formal
Informal
structured - a pre-determined set of questions asked of all applicants.
Formal interview
unstructured - questions developed as the interview
proceeds.
Informal interview
That which is illegal to seek would be personal information not related to employment.
Reference Checking
Is usually submitted voluntarily by the applicant
The Resume
What have you done with your life?
Antiquated term for resume
Curriculum Vitae (CV)
