FBLA Entrepreneurship Study Guide

Flashcards based on FBLA Entrepreneurship Study Guide notes.

debt financing

You borrow the money and agree to pay it back in a particular time frame at a set interest rate. You owe the money whether your venture succeeds or not.

equity financing

You sell partial ownership of your company in exchange for cash.

friends and family in the context of business financing

Less stringent regarding your credit and their expected return on investment, but structure the deal with legal rigor.

the role of Credit cards in business financing

A great tool for cash flow management, but not for long-term financing.

bank loans in business financing

Easier to obtain when backed by assets or third-party guarantors; lines of credit are preferable as interest isn't paid until money is spent.

leasing in business financing

A good option for big-ticket items such as equipment, vehicles, or computers.

angel investors

Fill the gap between friends/family and venture capitalists; enlist a savvy financial advisor.

private lending

A viable alternative when the bank says 'no,' specializing in an industry and willing to take on higher-risk loans.

the accounting equation

Assets=Liabilities+Equity

Examples of fixed assets

Land, buildings, equipment

Examples of current assets

Cash, accounts receivable, marketable securities, notes receivable, and inventory

Examples of liabilities

Accounts payable, notes payable, interest payable, wages payable, taxes payable

Examples of equity

Stocks, earnings, equity

Net Income

Revenue-Expenses

the Sherman Law protect against

Against monopolies

the Clayton Law protect against

No tying products one another, forcing people to buy one thing with another

the Robinson Patman Act protect against

Against price discrimination on customers

the Wheeler Lea protect against

Against deceptive advertising and false advertising

the Safety and Health Act of 1970 responsible for

Provide safe and sanitary work environments

the Employee Retirement Income Security Act responsible for

Receive retirement plan and health plan benefits

What workers are allowed according to the Immigration and Nationality Act

Only US citizens and individuals with work visas can work; business must keep I-9 file on hand

the FDA ensure

Ensures safety of food and drugs

the FCC regulate

Regulates broadcast signals (TV and Radio)

the FTC protect

Protects consumers from unfair practices

the CPSC regulate

Regulates everything that is not regulated by others (not food and drugs etc.)

a business plan

Written plan of a company’s future and goals

the general contents of a business plan

Executive Summary, Business Description, Market Strategies, Competitive Analysis, Design and Development Plan, Operations and Management Plan, Financial Factors

the key components of an Executive Summary

Mission statement and goals, company info, product overview, growth highlights, current investors, future plans

the key components of an Company Description

Review of the company - description of business + market, why your product serves the market, who specifically is in your target market, competitive advantages

the components of Market Analysis

Industry Description and Outlook, Information about target market, Distinguishing Characteristics, Size of primary target market, Market share, Pricing and Gross Margin targets, Competitive Analysis, Regulator Restrictions

What should be included given the Ownership information of Organization and Management

Names of owners, percentage ownership, Extent of involvement with the company, Forms of ownership, Outstanding equity equivalents, Common stock, Management Profiles

main types of businesses

Sole Proprietorships, Partnerships, C Corporation, S Corporation, Limited Liability Corporation

Taxation for Sole Proprietorship

Reported by owners Form 1040

Taxation for General Partnership

Partners are taxed individually on their share of the partnership's profits; the partnership itself does not pay federal income tax.

Taxation for C Corporation

Subject to double taxation: the corporation pays income tax on its profits, and shareholders also pay income tax on any dividends received.

Taxation for S Corporation

Reported by owner Form 1120S and 1040

a Traditional Economy

An economic system rooted in custom, history, and beliefs, often found in rural or indigenous communities, where decisions about production and distribution are based on traditions.

a Market Economy

Consumer based economic system where the economy relies on the choices of the consumer

a Command Economy

The economy is controlled by the government

a Mixed Economy

A market economy mixed with government regulations/involvement

a PERT Diagram used for

Statistical tool for project management, analyze and represent tasks involved in completing a certain project, used to see dependencies and connections of things

SWOT stand for

Strengths, Weakness, Opportunities, Threats

Scarcity

The basic economic problem that arises because people have unlimited wants but resources are limited

Demand

An economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service

Supply

A fundamental economic concept that describes the total amount of a specific good or service that is available to consumers

Equilibrium point

The state in which market supply and demand balance each other and, as a result, prices become stable

GDP

The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis. It includes all of private and public consumption, government outlays, investments and exports less imports that occur within a defined territory

Patent

Valid 20 years from date of application, only effective within US

Trademarks

Company logo, etc. (as long as renewed)

Copyright

Lifetime of author and 70 years after