Small Business
A Business that is independent (not part of a larger business) and that has relatively little influence in its market
Small Business
–arrangement in which a buyer purchases the right to sell the good or service of the seller
Franchise
is when a one firm buys another
Acquisition
A business owned and usually operated by one person. This is the most common type of ownership.
Sole Proprietorship
Business that is legally separate from its owners and is liable for its own debts. A “legal person” that can a) sue or be sued, b) buy, hold or sell property, c) make and sell products, and d) commit crimes and be punished for them.
government agency charged with assisting small businesses
SBA
Advantages:
Proven business opportunity, with history of profit.
Employees and customers in place
Disadvantages:
Capital goes to old owner not into business
Why are they selling? Retirement? Lack of success?
Transaction costs (brokers, bankers, lawyers)
Buying an existing Business
Hard work, drive, and dedication
Market demand for the products or services being provided
Managerial competence and experience
Luck - market and timing is right
Why Small Businesses are Successful
Form of ownership in which a group of sole proprietorships or partnerships work together for common benefits.
Mostly used in the agricultural markets
Cooperatives
Situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes.
Disadvantage of a corporation
Double Taxation
Is the Most Popular Small Business Sector
Services
○Identifying Niche Markets
Identifying New Markets
First-Mover Advantages
Distinct Competencies
Purchasing over the web has seen an increase in small business. This is classified as?
Emergence of E-Commerce
Legal principle holding owners responsible for paying off all debts of a business.
Used by Sole Proprietorships and General partnerships
Unlimited Liability
Hybrid of a publicity held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability.
LLC
businessperson who accepts both the risks and the opportunities involved in creating and operating a new business venture
Entrepreneur
Any advantage that comes to a firm because it exploits an opportunity before another firm did.
When a company decides to sell a part of its existing business. Usually because they are underperforming.
Divestitures
Legal principle holding investors liable for a firm's debts only to the limits of their investment.
Limited Liability
Corporation that eliminates double taxation (if less than 100 shareholders)
S-Corp
Document in which the entrepreneur describes her or his business strategy for the new venture and demonstrates how it will be implemented
Business Plan
group of small investors who invest money in companies with rapid growth potential
Venture Capital Company
when two or more organizations collaborate on a project for a mutual gain.
Strategic Alliance-
Partnership that allows for Limited Partners that only have liability up to their investment.
Limited Partnership
Owner of shares of stock in a corporation
Stockholders