Connect Chapter 5

Small Business, Entrepreneurship, and Franchising

Entrepreneurship

The process of creating and managing a business to achieve desired objectives.

Microentrepreneurs

Entrepreneurs who develop businesses with 5 or fewer employees.

Social Entrepreneurs

Individuals who use entrepreneurship to address social problems.

Small Business

An independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.

Small Business Administration (SBA)

An independent agency of the federal government that offers managerial and financial assistance to small businesses.

What 2 industries are among the top for small business employment?

Agriculture and Construction

Which 3 functions are most typical of a wholesaler?

Planning and negotiating for supplies, promoting, and distributing.

Services

Intangible products that involve a performance or any effort to provide something of value that cannot be physically possessed.

High Technology

Businesses that heavily depend on advanced scientific and engineering knowledge.

Wholesalers

Supply products to industrial, retail, and institutional users for resale or for use in making other products.

Sharing Economy

An economic model involving the sharing of underutilized resources.

Gig Economy

An economic model involving independent contractors selling their services on demand.

Social Listening

Monitoring and analyzing trends in conversation on social media around an industry, a brand, or specific products.

Market Niche

A specific group of customers.

Undercapitalization

The lack of funds to operate a business normally.

Business Plan

A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals,

What are 2 principal immediate threats to small and mid-sized businesses?

Supply shortages and rising inflation.

Venture Capitalists

Persons or organizations that agree to provide some funds for a new business in exchange for an ownership interest or stock.

Collateral

A financial interest in the property or fixtures of the business.

Line of Credit

An agreement by which a financial institution promises to lend a business a predetermined sum on demand.

Trade Credit

Suppliers allow the business to take possession of the needed goods and services and pay for them at a later date.

Bartering

Trading their own products for the goods and services offered by other businesses.

Equity Financing

An owner brings useful personal assets as part of their ownership interest in the firm.

Franchise

A license to sell another’s products or to use another’s name in business, or both.

Franchiser

The company that sells the franchise.

Franchisee

The purchaser of the franchise.

SCORE

An agency comprised of retired executives willing to provide advice and knowledge to owners and small firms.

The ______ population represents over 17 percent of the total U.S. workforce with retailers employing most from this group.

Immigrant

Intrapreneurs

Individuals in large firms who take responsibility for the development of innovations within the organization.

Downsizing

To reduce management layers, corporate staff, and work tasks in order to make the firm more flexible, responsible, and innovative.