Upgrade to remove ads
Only $2.99/month

Chapter 5 Review Small Business, Entrepreneurship and Franchises Test Review

Terms in this set (29)

Advantages of Franchising To the Franchisee
The franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others. If business problems arise, the franchisor gives the franchisee guidance and advice. The franchisee receives materials to use in local advertising and can take part in national promotional campaigns sponsored by the franchisor.
Advantages of Franchising To the Franchisor
There is a well-controlled distribution of the product without incurring the high cost of constructing and operating its own outlets. Benefits from the fact that the there is a high degree of motivation to succeed. It's success means more sales, which translate into higher royalties
Advantages of Small Business
Personal relationships with customers and employees, ability to adapt to change easily, simplified record keeping, and independence
Business plan
is a carefully constructed guide for the person starting a business. "this" should answer the following four questions:
1. What exactly are the nature and mission of the new venture?
2. Why is this new enterprise a good idea?
3. How much will the new venture cost? and
Capital, management skills, and planning
are the key ingredients in the survival of a small business.
Disadvantages of Franchising
Conflicts, paying a one-time fee plus continuing royalty and advertising fees collected as a percentage of sales. Must work hard, often putting in 10- and 12-hour days, six days a week. IF the endeavor is very successful that the franchisor opens its own outlet nearby, in direct competition.
Disadvantages of Small Business
risk of Failure, limited potential, limited ability to raise capital
Distribution Industries
industries that are concerned with the movement of goods from producers to consumers
Dual-branded franchises
situation in which two small franchisors offer their products together
Entrepreneurial spirit
the desire to create a new business.
Franchisee
a person or organization purchasing a franchise.
Franchising
the actual granting of a franchise.
Franchising arrangements
fall into three categories
(1)A manufacturer authorizes a number of retail stores to sell a certain brand-name item.
(2) A producer licenses distributors to sell a given product to retailers.
(3) The franchisor supplies brand names, techniques, or other services, instead of a complete product.
franchisor's primary responsibility
the careful development and control of marketing strategies.
Franchisor
an individual or organization granting a franchise.
Independent
The type of person likely to start a small business is ______, has a desire to determine his or her own destiny, and is willing to find and accept a challenge.
Minority Business Development Agency
awards grants to develop and increase business opportunities for members of racial and ethnic minorities.
mismanagement
the primary reason for small-business failure which results from lack of business know-how.
Production Industries
industry that includes the construction, mining, and manufacturing industries.
Real estate, Leisure and hospitality, Construction
The 3 industries that dominate the small businesses industry
Service Corps of Retired Executives
is a group of more than 11,000 retired businesspeople who volunteer their services to small businesses through the SBA.
Service Industries
industries that completes some type of work for a customer
small business
is one that is independent, operates as a for-profit organization, and is not dominant in its field.
Small Business Administration
created by Congress in 1953, is a governmental agency that assists, counsels, and protects the interests of small businesses in the United States. It helps people get into business and stay in business. The agency provides assistance to owners and managers of prospective, new, and established small businesses.
Small-Business Institutes
a group of senior and graduate students in business administration who provide management counseling to small businesses
Small-business investment company
privately-owned company that provides venture capital to small firms
Technical Innovation, Employment, Competition, and fulfilling the needs of Society and Other Businesses
The 4 things small businesses provide to our economy
small-business development center
a university-based group that provides individual counseling and practical training to owners of small businesses.
Venture capital
money invested in small and sometimes struggling firms that have the potential to become very successful.
THIS SET IS OFTEN IN FOLDERS WITH...