ME Ch. 33, 35

Entrepreneurship
STUDY
PLAY

Terms in this set (...)

Entrepreneurship
The process of starting and operating your own business.
Entrepreneurs
People who create, launch, organize, and manage a new business and take the risk of business ownership.
Franchise
A legal agreement to sell a parent company's product or services in a designated geographic area.
Franchisee
Person buying the business who has to invest money to buy the franchise and also pays an annual fee and a share of the profits.
Franchisor
The originator of a trade name, product, methods of operation, and so on that grants operating rights to another party to sell its product.
Unlimited liability
A business owner's financial liability is not limited to investments in the business, but extends to his or her total ability to make payments.
Sole proprietorship
A form of business ownership with a single owner who usually actively manages the company
Partnership
A contract between two or more persons who agree to pool talent and money and share profits or losses
General partnership
A way to organize a business in which each partner shares in the profits and losses.
Limited partnership
Form of partnership where one or more partners are not active in the daily running of the business, and whose liability for the partnership's debt is restricted to the amount invested in the business. Every limited partnership must have at least one general partner who has unlimited liability.
Corporation
A legal entity created by either a state or a federal statute authorizing individuals to operate an enterprise.
Stockholders
Shareholders; owners of a corporation
Limited liability
Personal assets of the owners cannot be taken if the company does not meet its financial obligations or gets into legal trouble.
Foreign corporation
A company that is incorporated under the laws of a state that differs from the one in which it does business.
Limited liability company
A relatively new form of business organization that is a hybrid of a partnership and corporation.
DBA (Doing Business As)
The registration by which a county government officially recognizes that a new proprietorship or partnership exists.
Entrepreneurs
Carmen and Ashley who earn money after school by babysitting and tutoring the children of their neighbors. Carmen and Ashley are ___.
2/3
Only __ of new businesses survive at least two years.
Collateral
Anything of value that you pledge as payment for a loan.
Business plan
Proposal that outlines a strategy that turns a business into reality
Description & Analysis Section
Part of the business plan that explains the type of business, business philosophy, description of goods, self-analysis, trading area, market segment, and proposed location
Business philosophy
Explains how you think the business should be run and demonstrates your understanding of the businesses role in the marketplace
Trading area
Geographical area where a business draws its customers
Buying behavior
Process used to decide what, where, from whom you will buy a product
Organization & Marketing Plan Section
Part of the business plan that may include the staff needed for the business and their duties and how the business will be promoted.
Equity capital
Raising money from within your company or by selling part interest of the company
Debt capital
Money that is borrowed to fund a business that must be repaid
Collateral
Something of value you pledge as payment
Financial Statements Section
Part of the business plan that displays businesses' projected income and expenses to help persuade investors to lend you money
Corporation
What form of business organization can own assets and borrow money without directly involving the people who own it, and therefore it is more closely regulated by the government than other business organizations?
Limited
Stockholders have __ liability.
The general partner
In a partnership, the partner who has unlimited liability and
Partnership
The type of business ownership that is dissolved if one of the owners dies.
Trading Area Analysis
What section of a business plan includes data about population distribution and local prevailing economic conditions?
Organizational Chart
Diagram of the various jobs and functions within a company
Personal Savings
Method business owners most frequently use to finance their businesses
Articles of Incorporation
Paperwork that must be filed by an entrepreneur(s) of a corporation. It identifies the name and address of the new corporation, its purpose, names of the directors, and the amount of stock that will be issued to each director.
Business Toolkit
Online library of business management information
Small Business Administration
U.S. government agency that has created over 900 centers to provide management and technical assistance to small businesses and new entrepreneurs
Buying income
Disposable income (income after taxes are deducted)
Self analysis
An assessment of one's own skills, interests, and personal qualities
Capital
Property and goods that can be converted into money to finance business operations
Target market
The group of people who are most likely to buy a particular product
Find help; register the business; obtain licenses
Legal steps to establish a business.
Purchase an existing franchise or non-franchise business; take over the family business; start a new business
Ways to enter business.
Sole proprietorship; partnership; corporation; limited liability company
Possible forms of business organization
Description and Analysis of the Proposed Business; Organizational and Marketing Plan; Financial Plan
Main components of a business plan
Secure financial assistance
Purpose of the business plan
Buying power index
Economic measurement combines population size, disposable income, and retail sales figures
Character
A person's repayment history
Coverage
A bank must know that you have enough insurance to cover the amount of the loan for your new business.
Six C's of credit
Used to evaluate a business owner's credit worthiness: capital, collateral, capability, character, coverage, and circumstances.
Sole proprietorship
Most common form of business ownership/organization
Demographics
Identifiable and measurable population statistics such as age, gender, race, marital status, income level, educational level, etc.
Economic conditions
trends in employment, interest rates, governmental regulations, etc.
Disposable income
Money remaining from wages after all taxes are taken out; referred to as buying income
Inventory policy
An explanation of how your business will manage the products you purchase or manufacture. How much will be kept on hand; How will you track what needs to be ordered and what has been sold; Where will you store the products that are in stock?
Outside experts
Trained professionals that could be used as advisors to your business to help you avoid mistakes
Personal savings
The most common method of financing a business.