Business 2 unit 2

Entrepreneur

someone who is in business with themselves, organizes and operates their company, and take on greater financial risk

venture

new business understanding that involves risk

small business

independently owned company, and owner is manager

fewer than 500

How many employees are in a small business?

SBA

U.S government agency that provides support to entrepreneurs and small business

virtual business & dot-com company

another name for internet business

boss, what you enjoy, opportunity to be creative, building enterprise

What are the 4 rewards of being an entrepreneur

sole proprietorships

Most US business are what?

99%

What % of US business are small business

52%

What % of workforce do small business eploy?

2/3

What fraction of US new jobs generate from small business?

funds, responsibility, alone/insecure, long hours, uncertain income, 4 out 5 fail, finding good workers

What are the challenges of being an entrepreneur?

business plan

written description of all aspects of a new business venture

no

Is there a set format for a business plan?

determine demand for your product by market research

what is the 1st step in setting up a business?

write business plan

what is the 2nd step in setting up a business?

produce

what will I ...?

competitors

Who are my main…?

product/service

Why is my … needed?

cost

How much will my product/service… product?

people

How many… will I need?

physical facilities

What… will I need?

licenses, permits

What …,… or other legal documents will I need?

money

How much… I need to get started?

executive summary

account of key points or the most important parts of the business plan

management team plan

qualifications & background of you and partner, how will you guys work together so you are using your qualifications to an advantage?

company description

outline of the business (size, scope, type of business)

product/service plan

description of product/service, potential spin-off

vision statement

establishes purpose of company and tells their values and beliefs

mission statement

specific aspirations of a company and the major goals

industry overview

research of the industry, companies similar or complementary

market analysis

research about customer profile, target market, and what marketing & sale strategies to use

marketing plan

how you are going to make customers aware of product/service

competitive analysis

looks at advantage over competitors and their websites, and talk to their customers

operational plan

process of product and delivery of product/service (shipping, packaging)

organizational plan

who is going to do what/ own what, management philosophy

financial plan

how much $ is to be spent, financial forecast, $ to start, cash flow, $ in sales

growth plan

prediction of how business will expand

contingency plan

looks at likely of risks and how to handle them (what could go wrong)

owned by one person

define sole proprietorship

sole proprietorship

advantages are:

easy to form

owner boss

make decisions

keep all profits

taxed once

2/3

how much of the business in america do sole proprietorships make

Sole Prop

disadvantages are:

hard to raise money

unlimited liability

may not have all skills needed

ends when owner dies

owned by 2 or more people

define partnership

yes

In a partnership do they need to agree?

partnership

advantages :

easy to start

easy to raise capital

can relay on others

taxed once

Partnership

disadvantages:

may not agree/ get along

unlimited legal & financial liability

partner leaves than partnership ends

company that is registered by state and operate apart from owners

define corporation

yes

does a corporation require a charter from state where their main office will be located

limited liability

what is the major advantage of corporation

what does limited liability mean

owners responsible for no more than capital they have invested

corporations

advantages :

limited liability

doesn’t end when dead

sell stock to raise capital

Corporations

disadvantage:

double taxation

YES

Do S-corporations and limited liability companies have doubled taxation?

NO

Do corporations undergo less government regulation?

NO

Are corporations cheap to start up?

YES

Do corporations need a corporation charter chart and board of directors?

cooperative

organization that is owned and operated by it’s members

save money on the purchase of certain good/services

What is the purpose of a cooperative

nonprofit organization

type of organization that focuses on providing services and not to make profit

YESS

do nonprofits register with the government?

NOO

Do nonprofits pay taxes?

franchise

contractual government to use the name and sell the product or service of a company in a designated geographic areas

nooo (same thing in every store)

is a franchise specialized?

McDonalds, taco bell, Starbucks

what are example of franchise

producers

gathers raw goods (from natural resources)

examples of producers

agriculture, mining, fishing, forestry

processors

changes raw materials into more finished products

examples of processors

sugar cane turned into sugar, crude oil into gasoline

intermediaries

moves goods from one business to another

example of intermediaries

in bulk, resells

manufactures

makes finished products out of processed goods, turn raw goods into finished

examples of manufactures

desks, cars, anything we use

wholesaler

buys in large quantities and divided into smaller and sells to retailer

examples of wholesaler

distributor

retailers

buys from wholesaler and sells to customers, final buyer

examples of retailer

clothing stores, auto dealerships

production

process of creating, expanding, manufacturing or improving goods/services

procure

most retailers do what with goods from producers for resale?

service based

perform tasks rather than provide good , most americans do this

procurement

buying and reselling of goods that have already been produced

marketing

process of planning, pricing, promotion, selling and distributing ideas, goods, service

management

sachieving company goals by planning, organizing, leading, control and evaluate effective use of resource

finance

money management

accounting

billing, preparing financial report, maintaining record,

finance

what is the future?

accounting

which is historic?

interdependence

functional areas of business depend on each other

management

responsibility for control of a company or organization (plan, organize, lead, control)

helps business focus on setting and meeting goals efficiently

what is the purpose of management?

planning, organization, leading, controlling

What are the 4 functions of management?

planning

create goals,execute them, strategies, determine resources

organizing

resources arranged to accomplish goals, organize people, determine org chart

leading

direction, delegate work, lead by example, standards set, enforce policies, resolve conflict

controlling

company on track, goals met, monitor employees, customer satisfaction, action

top-level manager

type of manager that sets goals, plan future, lead, control

middle manager

type of manager that makes decisions for top management,various departments in business, organizing function, have to carry out plans made from top managenment

operational manager

type of manager that does daily operations, some planning and organizing, oversees workers in meetings, supervisors

line authority

managers on one level and in charge of people below

authority clearly defined

what are adv of line authority?