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fs management > small business management > Flashcards

small business management Flashcards

1
Q

functions of management

A
  • planning
  • organizing
  • leading
  • controlling/evaluating
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2
Q

manufacturing

A

business or company that makes or manufacturers a product

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3
Q

merchandising

A

company that buys products from another business and sells it to its customer

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4
Q

service

A

business that provides a particular service to its customers

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5
Q

service-merchandising

A

provides products and services

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6
Q

small business

A

a business that is independently owned and operated and is not dominant in its field operation

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7
Q

quantitative small business

A
  • # of employees 25-300
  • average annual revenue = less than 6 million
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8
Q

qualitative small business

A
  • actively managed by its owners
  • highly personalized
  • largely local in its area of operation
  • largely dependent on internal sources of capital to finance its growth
  • nota major force in their industry
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9
Q

entrepreneur

A

one who organizes, manages, and assumes the risk or a business firm or venture (seeking wealth, not just in one business)

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10
Q

sole proprietorship

A

an individual conducting a business as an individual and sole owner. the owner is held personally responsible for all those of the employees

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11
Q

advantages of sole proprietorship

A
  • ease of starting
  • low cost of organization
  • freedom of management
  • profit incentive
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12
Q

disadvantages of sole proprietorship

A
  • unlimited risk
  • limited size
  • limited life
  • limited management ability
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13
Q

partnership (general)

A
  • an association of 2 or more persons who conduct business as co owners. personally liable for the obligations of the business
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14
Q

partnership (limited)

A

general partners and partners with limited interest (money or experience). put up capital, have a limited interest in the profits, and their liability is limited to the amount of their capital

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15
Q

advantages of partnerships

A
  • combined management, talent, and capital
  • ease of formation
  • efficiency of labor
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16
Q

disadvantages of partnership

A
  • lack of continuity
  • decisions binding on both parties
  • unlimited liability
  • frozen assets
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17
Q

C corporations

A

legal entities established under law

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18
Q

advantages of C corps

A
  • continuity of existence
  • ease of ownership
  • limited liability
  • large financial capability
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19
Q

disadvantages of C corps

A
  • legal restrictions on activities
  • separation of ownership/control
  • lack of personal interest
    double taxation of earnings
20
Q

S corporation

A

special type of corporation that has the protection of limited liability and elects to have a pass of income and losses like the treatment of a partnership

21
Q

advantages of S corp

A
  • independent legal entity
  • only shareholder taxed
22
Q

disadvantages of S corp

A
  • if not properly structured can be taxed as a C corp
  • limited shareholders
  • must have limited life
23
Q

limited liability corporation (LLC)

A

taxed like a partnership, but shields liability like a corp

24
Q

advantages of LLC

A
  • limited personal liability
  • flexibility of partnership
  • no significant requirements
  • members report taxes
25
Q

disadvantages of LLC

A
  • if not properly structured can be taxed as C corp
  • must have limited life
26
Q

you should have these things before starting business

A
  • sales tax ID #
  • state and local required permits and licenses
  • federal employer identification number (EIN)
  • build a team of advisors
  • open a business checking account
  • arrange for a business phone line to be installed
27
Q

capital - circulating

A

money for day to day operations

28
Q

capital - working

A

difference between current assets (less than 1 year) and current liabilities

29
Q

capital - fixed capital

A

long term capital invested in the business

30
Q

capital - sources of fund

A
  • personal, equity capital
  • debt equity
  • trade credit
  • venture capitalist
31
Q

valuation

A

estimate the worth or price of a company

32
Q

book value

A

the cost of a __ asset less accumulated depreciation

33
Q

liquidation value

A

the anticipated value of an asset that would be realized in case of liquidation of the business

34
Q

replacement value

A

an insurance concept in which the fair market price to purchase similar products in similar condition is used to settle claims (difficult to determine at any given time)

35
Q

market value

A

an approach used in business valuation which determines value based upon previous sales of similar business

36
Q

goodwill

A

an intangible asset such as the name of a funeral home; also an intangible asset which enables a business to earn a profit in excess of an normal rate of profit earned by businesses of the same kind

37
Q

copyrights

A

the registered right of creator to reproduce, publish, and sell the work which is the product of the intelligence and skill of that person

38
Q

patent

A

the registered right of an inventor to make, use, and sell and invention

39
Q

trademarks

A

distinct name, sign, or symbol that the federal government grants exclusive rights to use for specific time

40
Q

cash

A

money from private sources or personal assets used for purchase

41
Q

owner finance

A

usually 10% down, then payments go to former owner, rather than financial institution

42
Q

third part financing

A

bank, financial institution or private party finance the operation

43
Q

cash flow

A

must meet business expenses, owners draw, and all payments from the earnings of the business. done with a cash flow projection

44
Q

fixed expenses

A

a cost that, for a given period and range of activity called the “relevant range”, does not change in total, but becomes progressively smaller on the per unit basis as volume increases

45
Q

variable expenses

A

a cost which is uniform per unit but fluctuates in total in direct proportion to change in the related activity or volume

46
Q
A

fs management (7 decks)

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