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Business Study Guide
Terms in this set (51)
What is business?
A person's regular occupation, profession, or trade.
What is profit?
A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
Why do business exist? What motivates them?
They exist to make money and to provide goods and services to and and for people.
What is positioning?
perception/image of a product or brand
What is product differentiation?
How the product separates itself from the competition
How can firms compete against one another?
They can compete by having difference in their products like price, features, and different technology.
Commodity and why firms do not want their product viewed as one?
What are the advantages and disadvantages of buying an existing business?
Advantages: Startup work is already done, have employees, and they have plans already in place.
Disadvantages: You may already have a bad reputations, the business might need some improvements, and you may need to hire new employees.
Buying a franchise- advantages/disadvantages?
Advantages: Franchises offer the independence of small business ownership supported by the benefits of a big business network. You don't necessarily need business experience to run a franchise. Franchisors usually provide the training you need to operate their business model.
Disadvantages: You have to use the franchises menu and you have to pay them to start and royalty fees.
Buying a franchise steps one should take to evaluate it?
What is a Franchisee?
A company individual purchasing rights to run a buisness.
What is a Franchisor?
The person/company that owns the product or service and grants the rights to another buisness.
What are initial franchise fees?
Usually one-time expense to purchase a franchise.
What are start up costs?
Expenses associated with getting the franchise up and running.
What are royalty fees?
Ongoing expense; typically a percentage of the franchisees sales, and a source of revenue for the franchisor.
What are advantages and disadvantages of starting your own business?
Advantages: You can make the rules and you are in charge.
Disadvantages: Most of your money is invested in the company and you are at risk of losing all your assets.
What are advantages and disadvantages of sole proprietorship?
Advantages: You own the business by yourself, the government has little control, taxes is the only government regulation.
Disadvantages: Difficult to raise money and your the only one to contribute money.
What are advantages and disadvantages of partnership?
Advantages: You will not have to come up with capital alone, all losses will be shared, offer different areas of expertness, face little government regulation.
Disadvantages: Share profit and responsibility, partner could mess up, and could lead to disagreements that end bad.
What are advantages and disadvantages of corporation?
Advantages: Less liability, raise money by selling stocks, lenders are more willing to lend money, shareholders don't manage the company.
Disadvantages: Its more complicated, need a leader, cost a lot of money, income taxed twice, and more government regulation.
What are stocks?
A piece of the company that you can buy and sell.
What does going public mean?
Going public means becoming a publicly traded and owned entity. Businesses usually go public to raise capital in hopes of expanding.
What are three ways to make money on stocks?
2. Buy low sell high
3. Short Sell
What is a board of directors?
The people who oversee the company.
What is the difference between startup costs and operating expenses?
Startup costs are the expenses incurred during the process of creating a new business. All businesses are different, and can require different types of startup costs.
Operating expenses are those expenditures that a business incurs to engage in any activities not directly associated with the production of goods or services (see an alternative definition at the bottom). These expenditures are the same as selling, general and administrative expenses.
What is the difference between revenue and profit?
The short answer is that revenue is the total of all money that a company receives from people paying for its products or services, and profit is what is left over at the very end after the company has paid for the cost of goods sold, plus all of its expenses.
What resources could you use to help prepare a business plan?
What are common mistakes in making a business plan?
Don't make it too long, make it professional, don't rush it, and be confident when writing it.
Why do business with countries abroad?
If you have a strong dollar then you will be making money
What is the weak and strong dollar?
- Makes exports more expensive in foreign countries
- Imports are cheaper
- Makes exports cheaper in foreign countries
- Imports are more expensive
What are the formal trade barriers?
Any regulation or policy that restricts international trade, especially tariffs, quotas, etc.
What is push and pull production?
Push is manufacturers decide what to produce
Pull is retailers decide what to sell
What are the informal trade barriers?
Social Differences between trading partners
Cultural Difference between trading partners
Wealth gap (poverty/rich) between trading partners
Negotiation Styles between trading partners
Communication styles between trading partners
What government action can promote trade?
1. Free trade zones
2. Free trade agreements
3. Common markets
What is an operation system and what are the parts?
An operation system is planning that goes into production of q good and service. The parts are Facilities, Processing/Manufacturing, People.
What are the types of manufacturing systems?
1. Mass production/Assembly line
2. Batch production/Intermittent
3. Job shop/Coustom
What is a job description?
A written statement listing the tasks and responsibilities of a position. Often indicates the education and professional experience required and salary range of the position.
What is the recruiting process?
1. Post the job
2. Screen applicants
3. Conduct interviews
4. Conduct background checks
5. Make an offer
What are the alternatives to hiring people?
1. Hire part time workers
2. Hire freelancers/consultants
3. Hire temporary workers
4. Hire interns
What are the types of employee compensation?
What are employee reviews?
It is a performance review that happens once a year. They are typically given a rating and the higher the rating the more likely you are for a pay increase. But lower ratings could mean no pay increase and in the future they could lose their job.
What are the types of theft?
Shoplifting and credit card fraud
What are the types of insurance?
Property and workers compensation
What is depreciation?
When an asset goes down in price.
What is a target market? What are market segments?
What's the difference between demographics and psychographics?
Demographics: Specific age and gender
Psychographics: Personality, sub group, and life style
What the difference between accounts payable and accounts receivable?
What is a customer profile?
A description of the ideal customer for a product.
What is market research?
What is indirect and direct competition?
What are the 4 P's of Marketing?
What is a SWOT Analysis?
THIS SET IS OFTEN IN FOLDERS WITH...
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