Untitled Flashcards Set

What is a business plan?

A formal document outlining business goals, strategies, and financial projections.

Why does an entrepreneur need a business plan?

To secure funding, attract investors, and provide a roadmap for success.

What is a franchise?

A business model where an individual buys the rights to operate a business using the franchisor's branding and business structure.

What is a franchisor?

The company that owns the brand and business model, granting licenses to franchisees.

What is a franchisee?

An individual or business that purchases the rights to operate a franchise under the franchisor's brand.

What are the advantages of franchising to the franchisor?

Rapid expansion, consistent revenue from franchise fees, increased brand recognition, reduced operational costs.

What are the advantages of franchising to the franchisee?

Established brand and reputation, proven business model, training and support from the franchisor, lower risk.

What are the disadvantages of franchising to the franchisor?

Loss of control over franchise locations, potential damage to brand reputation.

What are the disadvantages of franchising to the franchisee?

High startup costs, ongoing fees, limited flexibility, dependence on franchisor's reputation.

What is a small business?

An independently owned and operated company with a limited number of employees and revenue.

What is an entrepreneur?

Someone who starts and runs their own business.

Why would someone want to be an entrepreneur?

Reasons include financial independence, pursuing a passion, and creating job opportunities.

Why do some businesses fail?

Poor financial management, lack of market demand, strong competition, ineffective marketing strategies.

Why is small business important?

Drives innovation, creates jobs, strengthens local economies.

What are the advantages of a small business?

More flexibility and control, ability to build strong customer relationships, lower startup costs.

What are the disadvantages of a small business?

Limited financial resources, higher risk of failure, greater workload for owners.

What are the three sources of funding an entrepreneur may use?

Personal savings, loans, investors.

What is a sole proprietorship?

A business owned and operated by one person.

What are the advantages of a sole proprietorship?

Easy to start and manage, full control, all profits go to the owner.

What are the disadvantages of a sole proprietorship?

Unlimited personal liability, limited funding options, heavy workload.

What is a partnership?

A business structure where two or more people share ownership and management responsibilities.

What are the advantages of a partnership?

Shared responsibilities, more resources and expertise, easier access to funding.

What are the disadvantages of a partnership?

Shared profits, potential conflicts, unlimited liability for general partners.

What is a corporation?

A legal entity separate from its owners, providing limited liability.

What are the advantages of a corporation?

Limited liability, easier access to funding, perpetual existence.

What are the disadvantages of a corporation?

Double taxation, expensive and complex, more government regulations.

What is an LLC?

A Limited Liability Company that combines benefits of a corporation and a partnership.

What are the advantages of an LLC?

Limited liability protection, flexible management structure, pass-through taxation.

What are the disadvantages of an LLC?

Can be more expensive to establish, varies in regulations by state.

What are ethics?

Principles of right and wrong that govern behavior.

What is business ethics?

Applying ethical principles in a business environment.

What is situational ethics?

Ethical decision-making that depends on the context.

What are some ethical issues you may encounter?

Fraud, discrimination, environmental impact, conflicts of interest.

What factors influence ethical behavior?

Personal values, company policies, social influences, legal requirements.

What might encourage ethical behavior?

Enforce laws, provide ethics training, establish corporate policies.

What is a whistle-blower?

An individual who exposes unethical or illegal activities within a company.

What is the economic view of social responsibility?

A business's primary responsibility is to maximize profits for shareholders.

What is the socioeconomic view of social responsibility?

A business has a responsibility to benefit society, not just generate profits.