Chapter 2 - slides 1-82

what does it mean to name a business?

. Involves more than just thinking of a catchy name • Can require registration and approval from the government • May require research or help from a marketing firm

what is a patent?

A grant of intellectual property rights to the inventor

What is the government business loan program?

Are loans made by SBA's partners. Requirements and practices change as the government funding alters to meet economic conditions.

what does SBIC do?

Are privately owned and operated investment firms who entitle small businesses to receive capital through SBIC funds borrowed from the government

define both types of capital how do they differentiate?

Equity Capital - money raised by a business or investor in exchange for a share of ownership of the company Debt Capital - money borrowed from a business or investor which must be repaid over time with interest

REMEMBER!!

General partnership means that partners get and equal share Limited partnership means that partners do not get and equal share. so, one partner is making more than the other even though they are supposed to cooperate with each other.

What is partnership?

Is a legal agreement between two or more people to be responsible for a business • Is the least common form of business organization

What does securing financing mean?

Is one of the many parts of business ownership. It should be calculated before start - up. Should be estimated for start-up and continual operating costs.

What does SBA stand for?

Small Business Administration

What does SBIC mean?

Small Business Investment Companies.

What is a separate legal entity?

a business which is granted a charter establishing its own rights, privileges and liabilities distinct from those of its members

what are loans?

amounts of money borrowed which will accumulate interest

What are the disadvantages of a franchise?

because you don't have the flexibility to make changes to the company.

What is a sole proprietorship?

business owned and operated by one person/individual.

what is separate legal entity?

business which is granted a charter establishing its own rights, privileges and liabilities distinct from those of its members

what are the two types of capital?

equity capital and debt capital

what are investors?

groups of individuals who invest their money in various types of companies in search of making a profit.

what does secured mean?

guaranteed by collateral; items pledged making sure debt is repaid

Business ownership

individual or groups which own a business and its legal entities

Legal Entity

law which allows a group of people to conduct business as a single unit - for example: a group ownership

what is microlending?

loans which are in small amounts

what is a financial cushion?

money in savings which can pay expenses when income may not be accumulating

what is location?

one of the many parts of business ownership. • Plays a major factor in a business' success or failure • Should be researched to find zoning restrictions, strong customer location and leasing or buying options • Should allow for business growth

What is a limited partnership?

partners have an unequal share and liability in the business; they are responsible only for the amount they invested.

what is a copyright?

protections provided to authors of original work

What is a franchise?

right or license to sell a company's product or service at a designated location

What is a corporation?

separate legal entity which forms a board to act as governing bodies. most complicated form of business.

What are the types of Business Forms?

sole proprietorship, partnership, corporation, and franchise

what is a mentor?

someone who has business experience and will aid in guiding a company to success

what are domain names?

unique names which identify Internet sites and businesses

what is capital?

wealth in the form of money or property; used in a business by a person, partnership or corporation

what are angel investors?

wealthy individuals who seek high returns through private investments

what is a trademark?

words, symbols, names or devices used to specify goods and to differentiate them from others

What is partnership?

• Is a legal agreement between two or more people to be responsible for a business • Is the least common form of business organization

what is a license?

• Vary depending on the business • May require complying with both state and federal regulations • Need to be approved and verified at a licensing authority

Examples of business ownership

−determining which type of business fits the needs of the owner −securing financing −naming the company −protecting business ideas −licenses and permits −location

Disadvantages of Partnership

−disagreements about business decisions can arise between partners −actions of one partner are legally binding for the other partners −if one partner dies, the partnership is dissolved and must be reorganized as a new partnership which can consume time −partners must contend with the fact they are working under unlimited liability

Advantages of a corporation

−easier to raise wealth and assets for company expansion than other forms of business −easier for people to enter or leave; can usually simply buy or sell company stocks −limited liability for each owner • responsible for amount of liability equal to amount of money invested in company −each department can easily be managed by a professional in the area

Advantages of Partnership

−easy start-up −combines the skills of two or more people −more money could be available to operate or expand the business −each partner has a voice in the business operation −taxed and monitored less heavily than a corporation

What are the two forms of partnership?

−general partnership −limited partnership

Disadvantages of Sole Proprietorship

−harder to raise money to expand the business since the company's shares are not sold −unlimited liability • complete personal responsibility for all business debts and losses • if sued the proprietor can lose a portion of personal assets −higher start-up cost −owner may have limited skills

Disadvantages of a corporation

−is difficult to build −process of incorporation requires more time and money than other forms of organization −can be very complex, especially accounting and record keeping −has more analyzed governmental regulations −can increase taxes on corporate profits and on its shareholders

Service Business examples.

−lawn care −income tax preparation −web design −wedding planning −carpet cleaning

What is a general partnership?

−partners share equal liability in the profits and losses of the business

Advantages of Sole Proprietorship

−relatively simple with less taxes and government regulations −entitlement to all profits of the business −relatively easy to start −easy to maintain business confidentiality

How can you become a business owner?

−starting a new business −purchasing a franchise −purchasing an existing business (non- franchise) −taking over family business

What are ways to become an owner?

−starting a new business −purchasing a franchise −purchasing an existing business (non- franchise) −taking over family business