FBLA

Sole proprietorship

One owner, easiest to start, unlimited personal liability for business debts.

Partnership

Two or more owners share profit and liability; general partners have unlimited liability.

Corporation

Separate legal entity, limited liability for owners, subject to double taxation.

LLC

Limited liability + pass-through taxation (profit taxed once, on owners' personal returns).

Unlimited liability

Owner is personally responsible for all business debts.

Limited liability

Owner's personal assets are protected from business debts.

Double taxation

Corporate profit taxed once at the company level, again when paid out as dividends.

Feasibility study

Research done before starting a business to check industry trends, competition, and market viability.

Mission statement

Describes what a company does right now — its core purpose.

Vision statement

Describes what a company aspires to become long-term.

Entrepreneur traits

Risk-tolerant, self-motivated, creative, persistent, adaptable.

Business plan components

Executive summary, company description, market analysis, organizational plan, financial plan.

Balance sheet

Snapshot at one point in time; Assets = Liabilities + Equity.

Income statement

Shows performance over a period; Revenue minus Expenses = Net Income.

Cash flow statement

Tracks actual cash moving in and out of the business.

Statement of retained earnings

Tracks changes in owner's equity over time.

Break-even point

Point where total revenue equals total costs (no profit, no loss).

Break-even formula

Fixed Costs divided by (Price per unit minus Variable cost per unit).

Gross profit

Revenue minus cost of goods sold.

Net profit

What remains after ALL expenses, including operating costs, taxes, and interest.

5 C's of credit

Character, Capacity, Capital, Collateral, Conditions.

Character (credit)

Borrower's credit history and reputation.

Capacity (credit)

Borrower's ability to repay, based on income and cash flow.

Capital (credit)

How much the borrower has personally invested.

Collateral (credit)

Assets pledged to secure a loan if the borrower defaults.

Conditions (credit)

Loan terms and broader economic conditions.

Debt financing

Borrowing money that must be repaid with interest; owner keeps full ownership.

Equity financing

Selling a portion of ownership in exchange for funding; no repayment required.

Venture capital

Equity financing from professional investors, typically for high-growth startups.

Angel investor

An individual who provides equity financing, often in early-stage startups.

Crowdfunding

Raising small amounts of money from many people, often online.

4 P's of marketing

Product, Price, Place, Promotion.

Demographic segmentation

Dividing customers by age, income, gender, education.

Geographic segmentation

Dividing customers by location.

Psychographic segmentation

Dividing customers by lifestyle, values, and personality.

Behavioral segmentation

Dividing customers by purchase habits and brand loyalty.

Cost-plus pricing

Adding a standard markup percentage to the cost of a product.

Competitive pricing

Setting prices based on what competitors charge.

Penetration pricing

Setting a low price to enter the market and gain share quickly, often raised later.

Price skimming

Setting a high price at launch, then lowering it over time.

B2B

Business-to-business — selling to other companies.

B2C

Business-to-consumer — selling to individual end users.

Job description

Lists duties, qualifications, and compensation for a role.

Hiring process order

Job posting, applications, interviews, background check, offer.

On-the-job training

Training that happens while actually performing the work.

Off-the-job training

Training that happens away from the actual job, like a classroom or seminar.

Grievance procedure

A formal channel for employees to raise complaints fairly.

At-will employment

Either employer or employee can end the relationship at any time, with some legal exceptions.

Progressive discipline

Step-by-step process before termination — verbal warning, written warning, suspension, termination.

OSHA's role

Sets and enforces workplace safety standards.

Self-employment tax rate

15.3% (12.4% Social Security + 2.9% Medicare), paid in full by sole proprietors/partners.

Payroll tax (employer)

Employer withholds employee's share of Social Security (6.2%) and Medicare (1.45%) and matches it.

Sales tax

Tax collected from customers at point of sale, varies by state/locality.

Estimated quarterly taxes

Tax payments made four times a year by self-employed individuals.

W-2

Tax form given to employees reporting annual wages; employer withholds taxes.

1099

Tax form for independent contractors; no taxes withheld, contractor pays own taxes.

Tax deduction

Reduces taxable income before tax is calculated.

Tax credit

Reduces the tax bill directly, dollar for dollar (generally more valuable than a deduction).

Depreciation

Spreading the cost of an asset over its useful life instead of expensing it all at once.

CSR (Corporate Social Responsibility)

A business's commitment to act ethically and benefit society beyond just profit.

Public relations program

Manages how the public perceives a company, especially during crises.

Collective bargaining

Negotiation process between unions and employers over wages, benefits, and conditions.

Why ethics matter in business

Protects long-term reputation even at short-term cost.

SBA

Small Business Administration — provides loans, resources, and advocacy for small businesses.

EEOC

Equal Employment Opportunity Commission — enforces laws against employment discrimination.

OSHA

Occupational Safety and Health Administration — enforces workplace safety standards.

FTC

Federal Trade Commission — polices unfair or deceptive trade practices and anti-competitive behavior.

EPA

Environmental Protection Agency — enforces environmental regulations.

Zoning laws

Restrict what type of business can operate in a given area.

Business license

Legal permission to operate a business.

Certificate of occupancy

Confirms a building is safe and legal for its intended use.

Sherman Antitrust Act

Prevents monopolies and anti-competitive practices.

Valid contract requirements

Offer, acceptance, and consideration (doesn't have to be written).

Patent

Protects an invention or process.

Trademark

Protects a brand name, logo, or slogan.

Copyright

Protects original creative works like writing, music, and art.

Trade secret

Protects confidential business information that is not publicly registered.

Employee vs. independent contractor

Employer controls how/when/where an employee works; contractors control their own methods.

Express warranty

A stated guarantee, written or verbal.

Implied warranty

An automatic, unstated guarantee that a product works for its normal purpose.

ADA

Americans with Disabilities Act — protects people with disabilities from discrimination.

Title VII

Prohibits employment discrimination based on race, color, religion, sex, or national origin.

FLSA

Fair Labor Standards Act — sets minimum wage and overtime pay standards.