Small Business, Entrepreneurship, and Forms of Ownership

Vocabulary flashcards covering key terms, concepts, and structures related to small business, entrepreneurship, and forms of business ownership discussed in the lecture notes.

Small Business

A firm that operates independently, has limited market influence, fewer employees, and lower revenue than larger competitors.

Entrepreneurship

The process of seeking and exploiting business opportunities under conditions of risk.

Entrepreneur

An individual who creates and operates a new venture, accepting both risks and opportunities.

Gig Economy

A labor market where freelancers and contractors perform short-term, project-based work using digital platforms.

Business Plan

A document outlining a new venture’s strategy and the steps for implementing it.

Franchise

A legal arrangement allowing a buyer to sell a seller’s product or service using a proven business model.

Franchisee

The buyer who purchases the right to operate a business under a franchiser’s brand and system.

Franchiser

The seller who grants a franchisee the right to market its goods or services.

Sole Proprietorship

A business owned and usually operated by one person who is personally liable for all debts.

Partnership

A business with two or more owners who share operation responsibilities and financial liabilities.

General Partner

A partner with unlimited liability who actively manages a partnership.

Limited Partner

A partner whose liability is restricted to the amount invested and who typically does not manage the firm.

Corporation

A legal entity separate from its owners, bearing liability for its own debts.

Limited Liability

Protection that restricts owners’ financial risk to the amount they invest in the business.

Closely Held (Private) Corporation

A corporation whose stock is owned by a small group and not offered to the public.

Publicly Held (Public) Corporation

A corporation whose stock is widely traded and available to the general public.

S Corporation

A hybrid entity taxed like a partnership but organized like a corporation, with restrictions on ownership.

Limited Liability Corporation (LLC)

A structure combining partnership taxation with the limited liability of a corporation.

Professional Corporation

A corporate form that offers business liability limits to licensed professionals while leaving them personally liable for professional acts.

Multinational Corporation

A corporation that operates in and is regulated by multiple countries.

Job Creation

The generation of new employment opportunities, primarily attributed to small businesses.

Innovation

The introduction of new ideas, products, or processes, often driven by small firms.

Resourcefulness

An entrepreneur’s ability to find creative solutions and maximize limited resources.

Customer Focus

An entrepreneurial trait emphasizing strong relationships and personalized service.

Risk Tolerance

Comfort with uncertainty and willingness to make decisions without complete information.

Insufficient Capital

Running out of funds before a venture reaches profitability; a key reason for failure.

Weak Controls

Poor financial or operational oversight that undermines business performance.

Negligence

Failure to devote adequate attention to a business, leading to potential failure.

Management Issues

Inexperience or incompetence in leadership that can cause business failure.

Buying an Existing Business

Entering ownership by purchasing an operating firm with established customers and processes.

Starting from Scratch

Launching a brand-new venture developed entirely by the entrepreneur.