FBLA Business Management

entrepreneur

person who starts a business and takes on the risk of running it in hopes

of earning a profit.

Liability

who is responsible for the business's debts.

unlimited

liability

owners can lose personal property to pay business debts.

limited liability

owners can lose only what they invested.

Sole proprietorship

One person and makes all decisions

and keeps all profits, but has unlimited liability

General

partnership

Two or more people and share money, skills, and work. Each

partner has unlimited liability and can be held

responsible for the debts and actions of the

business.

Corporation

Shareholders

(stockholders) Has limited liability. Can raise money by selling

stock.

Limited liability

company (LLC)

One or more

“members”

Combines the limited liability of a corporation with

simpler rules and paperwork and flexible taxes.

Planning

Setting goals and deciding how to reach

them

Organizing

Arranging people, tasks, and resources to

carry out the plan

Leading

Guiding, motivating, and directing

employees

Controlling

Comparing actual results with goals and

taking corrective action

mission statement

a company’s purpose

vision statement

what the company hopes to become or achieve in the

future.

SMART goals

Specific, Measurable, Achievable, Relevant, and Time-bound.

Autocratic

The leader makes decisions alone and

expects orders to be followed

Democratic

(participative)

The leader asks for employee input and

considers it before deciding

Laissez-faire

The leader is hands-off and lets

employees make their own decisions

with very little supervision

organizational chart

diagram that shows the structure of a company and the

chain of command (who reports to whom).

Delegation

assigning a task to someone else and giving that person the authority

to complete it.

Physiological

Food, water, shelter, rest, a paycheck that covers

basics

Safety

Job security, safe working conditions

Belonging (social)

Friendships, teamwork, being part of a group

Esteem

Respect, recognition, achievement

Self-actualization

Reaching your full potential, personal growth

Business ethics

the principles that guide decisions about what is right and wrong in

business,

Social responsibility

a business’s obligation to act in ways that benefit society.

Revenue:

money a business earns from selling its products.

Expenses:

costs of

running the business.

Accounting equation:

Assets = Liabilities + Owner’s Equity.

Fixed costs

stay the same no matter how much is produced or sold

Variable

costs change with production or sales

break-even point

total revenue equals total costs, so the business has no

profit and no loss.