Chapter 5: Small Business, Entrepreneurship, and Franchises

These flashcards cover key vocabularies related to small businesses, entrepreneurship, and franchises, aimed at aiding review for an upcoming exam.

Small Business Administration (SBA)

A government agency that assists, counsels, and protects the interests of small businesses in the United States.

Small business

An independent business with fewer than 500 employees, depending on its industry.

Venture capital

Money that is invested in small (and sometimes struggling) firms that have the potential to become successful.

Franchise

A license to operate an individually owned business as though it were part of a chain of outlets or stores.

Franchisor

An individual or organization granting a franchise, providing brand name, management skills, training, and methods of doing business.

Franchisee

A person or organization purchasing a franchise that supplies labor and capital, operates the franchised business, and agrees to franchise terms.

Business plan

A carefully constructed guide for starting a business, serving as a communication, management, and planning tool.

Small-business size standards

Criteria for defining small businesses, usually articulated in terms of the number of employees or average annual sales.

Equity financing

Funding obtained by a small business through investments from venture capital or private investors in exchange for ownership.

Debt financing

Funding obtained by borrowing money, which must be repaid later by the business.

Crowdfunding

A method where entrepreneurs invite contributions from the public to fund their business projects or startups.

Women’s Business Centers (WBCs)

A network of educational centers in the U.S. that assists women entrepreneurs in starting and growing their businesses.

Small-business investment companies (SBICs)

Privately owned firms that provide venture capital to small enterprises that meet specific investment standards.

Service Corps of Retired Executives (SCORE)

A group of businesspeople who volunteer to provide counseling and mentoring to small businesses through the SBA.

Globalization

The process by which businesses develop international influence and operate on an international scale.