Studied by 2 people
small business
an independent owner-managed business with fewer than 100 employees
new venture
A recently formed commercial organization that provides goods and/or services for sale.
Entrepreneurship
The process of identifying an opportunity in the marketplace and accessing the resources needed to capitalize on it
Entrepreneur
a person who accepts the risks and opportunities involved in creating and operating a new business venture
Index of Economic Freedom
determines the extent of governmental intervention in a country
goal of independence
independence from working for someone else coupled with a reasonable degree of financial security
Goal of growth and expansion
transforming the venture into a large business
Intrapreneur
someone who works inside an existing organization who sees an opportunity for a product or service and mobilizes the organization's resources to try to realize it
new ventures
main source of job creation and responsible for most new products and services
idea generation
abandoning traditional assumptions about how things work and seeing what others do not
Screening
the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new-product strategy or are obviously inappropriate for some other reason
gig economy
a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
3 types of entry strategies
totally new product, customization of an existing product, franchising
business plan
a formal written document that describes the nature of a business and how it will operate
Bootstrapping
using low-cost or free techniques to minimize your cost of doing business
collateral
something pledged as security for repayment of a loan, to be forfeited in the event of a default.
trade credit
the practice of buying goods and services now and paying for them later
Personal Savings
Money that has been set aside and not spent by individuals and households.
love money
investments from friends, relatives, and business associates
Angel Investors
individuals who invest in start-up companies with high growth potential in exchange for a share of ownership
venture capitalists
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.
business development bank of Canada
bank that provides small and medium sized businesses with flexible financing, affordable consulting services and venture capital
incubators（incubator）
centers that offer new businesses low-cost offices with basic business services
Crowdfunding
raising money for a project or venture by obtaining many small amounts of money from many people
Entrepreneur-Opportunity Fit
realistic self-assessment is needed to know if a venture should be pursued
Opportunity-Resources Fit
Determining whether the resources needed to capitalize on the opportunity can be acquired.
Entrepreneur-Resources Fit
Entrepreneur needs to assess whether they have the capacity to meet the resource requirements.
debt
no giving up control to outsiders
financial institutions
main providers of debt financing
trade credit
agreement between supplier and buyer to bill the entrepreneur later
Buying an existing business
business is established and has a clear picture of what to expect
Taking Over the Family Business
exclusive management resources and high employee loyalty
buying a franchise
existing business that you buy the rights to open in a new location
franchising agreement
Stipulates the duties and responsibilities of the franchisee and the franchiser.
market demand
careful analysis of market conditions will help owners succeed
managerial competence
solid understanding of how to manage a business is required
managerial inexperience
overestimation of skills
neglect
not devoting enough time to the business
Weak control systems
efficient control system is needed in order to be alerted to issues
insufficient capital
overly optimistic about how quickly they'll start earning profits
Sole Proprietorship
business owned and typically operated by one person who is responsible for all of its debts
partnership
business with two or more owners who share in the operation of the firm and in financial responsibility for the firm's debts
general partner
partner who is actively involved in managing the firm and has unlimited liability
limited partners
partner who generally does not participate actively in the business and whose liability is limited to the amount invested in the partnership
corporation
business considered by law to be a legal entity separate from its owner with many of the legal rights and privileges of a person
shareholders
investors who buy shares of ownership in the form of stock
voting by proxy
granting voting authority to someone who will attend the meeting
common stock
shares whose owners usually have last claim on the corporation's assets but who have voting rights in the firm
board of directors
group of individuals elected by a firm's shareholders and charged with overseeing, and taking legal responsibility for the firm's actions
inside directors
employees of the company, they are top managers
outside directors
non-employees of the firm
corporate officers
top managers hired by the board to run the corporation on a day-to-day basis
public corporation
business whose shares of stock are widely held and available for sale to the general public
private corporation
business whose stock is held by only a few people and isn't typically available for sale
Initial Public Offering (IPO)
selling shares of stock in a company for the first time to general investing public
private equity firms
companies that buy publicly traded companies and makes them private
income trust structure
structure allowing companies to avoid paying corporate income tax if they distribute all or most of their earnings to investors
Federal Incorporation
used if a company is going to operate in more than one province
provincial incorporation
company can operate in only one province
cooperative
organization that is formed to benefit its owners in the form of reduced prices or the distribution of surpluses at the end of the year
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Flashcard (60)