Ownership, Funding, Protection
Debt Capital
borrowed money obtained through loans of various types
dividends
earnings distributed to stockholders
Patents
licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time
Microlending
loans which are in small amounts
location
major factor in a business' success or failure
Equity Capital
money raised by a business or investor in exchange for a share of ownership of the company
Sole Proprietorship
owned and operated by one individual
Limited Partnership
partnership in which partners have an unequal share and liability in the business. They are responsible only for the amount they invested.
General Partnership
partnership in which partners share equally in both responsibility and liability
Most common form of business ownership
sole proprietorship
preferred stock
stock that entitles the holder to a fixed dividend, whose payment takes priority over that of common-stock
convertible preferred stock
stock that permits the preferred stockholders to convert their shares into common stock
common stock
the most basic form of ownership, including voting rights on major issues, in a company
Captial
wealth in the form of money or property
Angel Investors
wealthy individuals who seek high returns through private investments
Small Business Administration (SBA)
A U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans.
Franchise
A business established or operated under an authorization to sell or distribute a company's goods or services in a particular area
Partnership
A business in which two or more persons combine their assets and skills
Corporation
A business owned by stockholders who share in its profits but are not personally responsible for its debts. Operates as a separate legal entity.
Balance Sheet
A financial statement that reports assets, liabilities, and owner's equity on a specific date.
stock
A share of ownership in a corporation.
Proforma statements
Based on Financial Projections: Balance Sheet. Cash Flow Statement Profit Loss Statement
Long term loan
Borrowed money that is repayable over a period longer than a year.
Short term loan
Borrowed money that must be repaid within one year
forms boards to act as governing bodies and is the most complicated form of business
Corporation
Disadvantages of Partnership
Disagreements. Unlimited liability.
before
Financing should be calculated ______________ start-up.
Investors
Groups of individuals who invest their money in various types of companies in search of making a profit
Disadvantages of sole proprietorship
Harder to raise money. Unlimited liability. Limited life. Higher start-up costs. Limited skills.
Venture Capital Firms
Invest in start-up businesses with high growth potential in exchange for a share of ownership
zoning restrictions, strong customer location, leasing/buying options
Location should be researched to find...
purchasing real estate, construction, equipment
Long-term loans are often used for
Netflix Personal Computers Smartphones
Market disruption examples
Least Common Form of Business Ownership
Partnership
United States Patent and Trademark Office
Patents are issued by the
Small Business Investment Companies
Private businesses that are authorized to make SBA insured loans to start-ups and small businesses.
licenses and permits
Required documents for performance of professional duties or establishment of a business.
start-up money
Short-term loans are often used as
Ways of becoming a business owner
Start a new business. Purchase a franchise. Purchase existing business. Take over family business.
service sector
The sector of the economy that provides services--such as health care, banking, and education--contrast to the sector that produces goods. Largest portion of the economy.
Competition Customer Satisfaction Product Market Fit Product Maturity Market Disruption Future Earnings and Assets
When purchasing an existing business, what are some potential hidden problems.
bond
a formal contract to repay borrowed money with interest at fixed intervals
Market Distruption
a situation wherein markets cease to function in a regular manner, typically characterized by rapid and large market declines.
Trademark
a symbol, word, or words legally registered or established by use as representing a company or product.
par value
a value assigned to a share of stock and printed on the stock certificate