Small Business & Entrepreneurship
independently owned that has relatively little influence in its market
small business
a businessperson or individual who accepts the risks and opportunities involved in creating and operating a new business venture.
Give an example along with the answer
entrepreneur
a document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how that strategy will be implemented.
business plan
is a business owned and usually operated by one person who is responsible for all its debts.
sole proprietorship
A __________________________ is a form of ownership in which a group of sole proprietors or partnerships agree to work together for common benefits. They are small part of the US economy, but have an important role in agriculture.
cooperatives
the process of seeking business opportunities under conditions of risk and uncertainty
entrepreneurship
a government agency that assists small businesses, has different standards based on industry.
Small Business Administration or SBA
an arrangement in which a buyer purchasers the right to sell the goods or services of the seller.
franchise
____________________________ is a business with 2 or more owners who share in both the operation of the firm and the financial responsibility for its debts.
general partnership
The legal principle holding owners responsible for paying off all debts of a business.
If the business fails to generate cash, bills must be paid out of the business owner’s pockets.
unlimited liability
An organization’s ______________________ _____________________ are the aspects of the business that the firm performs better than its competitors.
distinctive competencies
any advantage that comes to a firm because it exploits an opportunity before any other firm does
first-mover advantage
__________________________ are groups of small investors who invest money in companies with rapid growth potential.
venture capitalists
A _________________________ is a business that is legally considered an entity separate from its owners and is liable for its own debts; owner’s liability extends to the limits of their investments.
corporation
____________________________ is a partner who does not share in a firm’s management and is liable for its debts only to the limits of their investment.
limited partner
A __________________ is a segment of a market that is not currently being exploited. Small businesses often find and use these better than big ones.
niche
A big change in the US is the rise of the ______________ economy. This is where people work short jobs instead of having a full-time job
Give one example along with the fill-in-the-blank answer.
gig
Uber; DoorDash; Lyft; InstaCart
Other than starting a business from scratch, what are the other two options a person has when deciding to own their own business?
1. Franchising
2. Buying an Existing Business
a situation in which taxes may be payable both by a corporation on its profits and by the shareholders on dividend incomes.
double taxation
a corporation whose stock is held by only a few people and is not available for sale to the general public.
closely held or private corporation
About 70% of small businesses are involved in the ______________________ industry, which ranges from marriage counseling to computer software. This is because they require few resources (don’t cost much to start).
service
List 3 entrepreneurial characteristics discussed in class and your notes.
Passion and Motivation - Every successful entrepreneur has a burning passion. This isn’t just about making money, its a genuine love for what they do.
Resilience and Adaptability - Entrepreneurs often face hurdles, setbacks, and failures, so it is important to bounce back, learn from mistakes, and adapt.
Visionary - Entrepreneurs do not just live in the present; they’re always thinking about the future. This vision guides their decisions, from the people they hire to the strategies they employ.
Risk-Taking and Decision-Making - Starting a business is a risk, successful entrepreneurs have a knack for calculating risk. They analyze situations, weigh the pros and cons, and then take informed leaps.
Continuous Learner - The world of business is vast and ever changing, successful entrepreneurs are always eager to learn and stay updated and competitive.
List 2 trends in small business start-ups discussed in class and in your notes.
Emergence of E-Commerce
The most significant trend is the rapid emergence of e-commerce and other online points of entry.
Entrepreneurs have used the internet to create and expand new businesses faster and easier than ever before.
Crossovers from Big Business
More businesses are being started by people who have opted to leave big businesses and use their experience to work for themselves.
Global Opportunities
Many entrepreneurs are finding new opportunities in international markets.
Better Survival Rates
Most entrepreneurs are encouraged to test their skill because of the decline in the failure rate. About half of new businesses survive, up for 20% in the 70s.
Organized like a publicly held corporation
Subject to additional regulation
Subject to partnership taxation
Limited Liability Company or LLC
Corporate governance is established by the firm’s bylaws and usually involves three distinct bodies.
What are the 3?
1. Stockholders (shareholders) are the owners of a corporation, investors who buy ownership shares in the form of stock.
2. The board of directors is a group elected by stockholders to oversee corporate management.
3. Corporate officers are top managers hired by the board of directors to run the corporation on a day-to-day basis.