business module 2 quiz
Micropreneurs and Home Based Businesses
>50% small businesses run from home, many owned by combining career and family
vertical merger
a combination of firms at different stages in the production of a good or service
conglomerate merger
a combination of two firms that are in unrelated industries
acquisition
one company's purchase of property and obligations of another company
benefits of Micropreneurs and Home Based Businesses
-ability to start immediately -minimal start up capital needed -no rent or excessive start up charges -comfortable/no commuting -tax benefits -etc.
Advantages of Sole Proprietorship
-ease of starting and ending business -own business -pride -leaving legally -retention of company profits -no special taxes
conventional corp.
-has stockholders -limits liability of owners -enables many people to share in ownership
Disadvantages of a corporation
-initial cost -extensive paperwork -double taxation -double tax returns -size -difficulty to terminate -possible conflict w stakeholders/board of directors
home based franchises disadvantages
-isolation -long hours -responsibility
franchise agreement disadvantages
-large start up cost/cause -shared profit
getting started in a small business
-learn from others -get experience -take over successful firm
Advantages of a corporation
-limited liability -ability to raise more investment money -size -perpetual life -ease of ownership change -attracting talented employees -separation from ownership from management
franchise agreement advantages
-management/marketing assistance -personal ownership
advantages of partnerships
-more financial resources -shared management -longer survival -no special taxes
home based franchises advantages
-no commuting -extra time -low overhead
individuals can incorporate
-normally don't issue stock to others -don't share all advantages and disadvantages
reasons to be an entreprenuer
-opportunity -profit -independent -challenge
what does it take/attributes to be an entrepreneur
-self-directed -self-nurturing -etc.
disadvantages of partnerships
-unlimited liability -division of profits -disagreements -difficulty of termination
Disadvantages of Sole Proprietorship
-unlimited liability -limited financial resources -management difficulties -commitment -few fringe benefits -limited growth -limited life span
downsides of Micropreneurs and Home Based Businesses
-work habits -limited support system -isolation -limited workspace -clients -effort!!
Master Limited Partnership (MLP)
A partnership that looks much like a corporation but is taxed like a partnership
limited liability partnership
All partners are limited partners and not responsible for the debts and other liabilities of other partners
LLC
Limited liability corporations
Limited Partnership
partnership in which only one partner is required to be a general partner
merger
result of 2 firms joining to one company
franchise
sells rights to use business name and sell
General Partnership
shared ownership and liability
franchisor
someone with a good idea for a business
state incubators
tech centers to help get things going
horizontal merger
the joining of two firms in the same industry
franchisees
to others given territory
intrapreneurs
use company existing resources to launch new products and profits