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small business

independent business with fewer than 500 employees, not dominant in its market

home-based business

firm operated from residence of the business owner

business plan

written document that provides an orderly statement of a company's goals, methods, and standards

Small Business Administration

principal government agency concerned with helping small U.S. firms


small-business based loans often used to buy equipment or operate a business

business incubator

local programs designed to provide low-cost shared business facilities to small start-up ventures

venture capital

money invested in a business by another business firm or group of individuals in exchange for an ownership share


contractual business arrangement between a manufacturer or other supplier, and a dealer such as a restaurant or retailer


individual or business firm purchasing a franchise


firm whose products are sold to customers by the franchisee

sole proprietorship

business ownership in which there is no legal disitinction between the sole proprietor's status as an individual and his or her status as a business owner


association of two or more persons who operate a business as co-owners by voluntary legal agreement


legal organization with assets and liabilities separate from those of its owner(s)

S corporation

corporations that do not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes

limited-liability corporation

corporation that secures the corporate advantage of limited liability while avoiding the double taxation characteristic of a traditional corporation

employee ownership

business ownership in which workers buy shares of stock in the company that employs them

not-for-profit corporation

organization whose goals do not include pursuing a profit


owners of a corporation due to their purchase of stock in the corporation

preferred stock

shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock

common stock

shares that give owners voting rights but only residual claims to the firm's assets and income distributions

board of directors

governing body of a corporation


agreement in which two or more firms combine to form one company


agreement in which one firm purchases another

vertical merger

merger that combines firms operating at different levels in he production and marketing process

horizontal merger

merger that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines

conglomerate merger

merger that combines unrelated firms, usually with the goal of diversification, spurring sales growth, or spending a cash surplus in order to avoid a takeover attempt

joint venture

partnership between companies formed for a specific undertaking

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