SBM Exam 2 Review

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SBM Exam 2 Review
2010-09-23 17:20:58
SBM Exam Review

SBM Exam 2 Review
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  1. A customer must have:
    purchasing power
  2. Advantages & disadvantages of a sole proprietorship & a corporation.
    Advantages: Very little red tape, simplest & cheepest way of starting a business, low cost organization, freedom to manage, profit incentives: profits add to personal income & losses can be deducted from personal income for tax purpose.

    Disadvantages: Unlimited Risk, Limited Life (continuity), Limited size, raising money is limited, collateral loans require a co-signer
  3. What governs purchasing power?
    unsatisfied needs, money-available funds.
  4. What is associated with an area's economic base?
    Wealth produced in an area by employment
  5. Angels:
    Private investors who are willing to supply financing for new & or risky small venture startups
  6. Better Business Bureau:
    Association of business firms that promotes ethical conduct by all business firms in the community
  7. Business policies:
    Fundamental statements that serve as guides to management practice
  8. C Corporation:
    An ordinary corporation taxed by the federal goverment as a separate legal entity
  9. Competition:
    The practice of trying to obtain something that is being sought by others under similar circumstances at the same time.
  10. Consumerism:
    The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also a social movement that seeks to strengthen the rights of consumers.
  11. Corporation
    A legal form of organization whereby a legal entity is authorized by a state to operate a business under the entity's charter or articles of incorporation
  12. Customer profile
    A description of potential customers in a target market
  13. Delegation of authority:
    A superior's act of granting to subordinates on the basis of competence the right to act or decide
  14. Direct forecasting
    A forecasting method in which sales is the estimated variable
  15. Economic base
    The wealth produced in or near a community that provides employment and income to the local population
  16. General partner
    A partner in a limited partnership who has unlimited personal liability
  17. indirect forecasting
    a forecasting method in which variables related to sales are used to project future sales
  18. Limited liability company
    a new form of business ownership that combines the aspects of partnerships with the limited liability of a corporation; owners are known as memebers
  19. limited partner
    a partner is a limited partnership who is not active in its management and has limited personal liability
  20. market
    a group of potential customers possessing purchasing power and unsatisfied needs
  21. market survey/analysis
    a study that is used by a business to determine where the potential customers are located. The process of locating & describing potential customers
  22. marketing
    the process of planning and executing the development, pricing, promotion, and distribution of an organizations goods or services
  23. marketing mix
    the combination of product, pricing, promotion and distribution activities
  24. modified book value
    determination of the value of a business by adjusting book value to reflect obvious differences between the historical cost and the current market value of the assets
  25. partnership
    a form of legal organization in which a business association made up of two or more persons is formed for theprupose of carrying on as co-owners
  26. S Corporation (Subchapter S corporation)
    a type of corporation that offers limited liability to its owners but is taxed by the federal government as a partnership
  27. Sales forecast
    a prediction of how much of a product or service will be purchased within a market during a specified time period
  28. Sole proprietorship
    a legal form of organization whereby the business is owned & operated by one person