Independent business with fewer than 500 employees, not dominant in its market.
Small Business according to the SBA
Independent business with fewer than 500 employees, not
dominant in its market.
What are the three key ways small businesses contribute to
-Creating new jobs
-Creating new industries
3 main causes of small business failure?
written document that provides an
orderly statement of company's goals, methods, and standards.
Five main sections of a business plan?
1. executive summary
3. financial section
4. marketing section
5. resumes of principals
SBA Small Business Administration
principal government agency concerned with helping small US firms.
small business loans often used to buy equipment or operate the business.
program designed to provide low-cost shared business facilities to small start-up ventures.
money invested in a business by another business firm or group of individuals in exchange for an ownership share.
What are the various ways the SBA helps small businesses?
The SBA small businesses by providing small businesses a means to get microloans from private lenders.
The SBA also helps procure a portion of government spending so that small businesses can secure these contracts. This is because small businesses can't often compete with larger firms for government contracts.
franchisee vs franchisor
franchisee- individual purchasing a franchise
franchisor- franchise providor
Benefits of franchising for the franchisee and the franchisor?
-easier to spread geographically because locals know culture and easier to find labor.
-franchisor will be very attentive likely more so than just a chain-ownership.
-quick way to become an owner
Drawbacks of franchising for both parties?
If the franchisor fails so does the franchisee and vice versa.
There is a close relationship with the brand so representing it well is important on each end.
business ownership in which there is no legal distinction between the sole proprietor's status as an individual and his or hers 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 of it's owner(s)
Gain access to an expanded financial capabilities by offering direct outside investment such as stock sales.
Deal with more taxes.
LLC Limited-Liability Corporation
corporation that has the corporate advantage of limited-liability while avoiding the double taxation characteristic of a traditional corporation.
Many new businesses are going LLC
example is Amazon.
business ownership in which workers buy shares of stock in the company that employs them.
Benefit is the worker's have more incentive in their work and the companies well being.
Public (government) ownership
Sometimes public ownership results when investors are unwilling to invest in a high-risk project.
The Federal Government operates the hoover damn to provide electricity to Las Vegas.
Collective (Cooperative) Ownership
Cooperative owners join forces to operate all or part of the activities of their firm or industry.
Can share equipment and expertise.
Frequently found in the agricultural businesses.
Corporations fall into three categories..
3. alien corporation
Stock ownership and stockholders rights.
there is closed or closely held stock ownership such as in a family business or publicly held. In publicly held managers will report own major business decisions and share-holders may vote on officers etc.
shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock. Also have first claim on assets if the company dissolves.
shares that give owners voting rights but only residual claims on the firms assets and income distribution.
Board of directors
Governing body of a corporation.
Levels of management in a corporation
board of directors
agreement in which two or more firms combine to form one company.
agreement in which one firm purchases another.
merger that combines firms operating at different levels in the production and marketing process.
Two primary goals are:
1. ensures adequate flows of raw materials and supplies for a firm's products or
2. to increase distribution
merger that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines.
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.