BA 101

What is a stakeholder?

A group that has a stake (part in the success in the business

What is equity funding?

Advantages- no obligation to pay owners no legal obligations to pay dividends disadvantages- less control

Advantages and disadvantages of being a small business

Advantages: flexibility, cost, focus, Disadvantages: high stress, undercapitalization, not a lot of managerial experience

what are the issues?

Ambiguity - Copyright Criminals and the fair use doctrine. Abuse - "thickets of patents", "patent trolls", patent war in the smartphone industry and its impact on consumer cost and squandering of company resources.

Accounting equation

Assets= liabilities + owners equity

Why is profit the primary goal of business?

B/c profit is straight cash and money motivates people.

Why is innovation important for business?

Because it leads to better products being created, cheaper and better quality

Risk and reward have a direct relationship, what does this mean

Bigger the risk the bigger the reward

Why do entrepreneurs start a business?

-profit -independence -challenge -thrill of the chase

What does short term finance focus on

focus on cash obligations are: inventory, payroll, rent, accounts receivable- fund sort term obligations by accounts receivable

parts of a income sheet

revenue, expense or profit

creative destruction

"out with the old in with the new"- containerization, globalization

What is demographics?

Characteristics of human population

State of the Economy

Contraction ( GDP shrinking) expansion (GDP growing)

What three things must a business do to get to P (Profit) and not L (loss)?

Demand for g/s, attract demand, control costs (C<R)

What is free enterprise

Economic system where businesses operate individually w/ little governmet interaction

What is risks' relationship to uncertainty

Entrepreneurs are willing to take risk b/c of reward- bigger risk bigger reward- direct relationship

What is fiscal policy? What is monetary policy? What are laws/regulations? Give examples of each.

Fiscal- taxiation, Monetary- increasing/ decreasing supply of money Regularity- environment, safety (roads)

characteristics of a corporation

Formation of a corporation (People, Paper, Act) 1) must have one or more incorporators (people or another corp) 2) articles of incorporation a) corporate name (corp., company, incorp, or ltd) b) name and address of each incorporator c) name and address of director d) name of registered agent and address of registered office e) generally must have statement of purpose--but some states presume general purpose of all lawful activity f) capital structure a) amount of authorized stock (# shares corp can sell) b)number of shares per class c) information on voting rights and preferences of each class g)DO NOT need duration, assume perpetual existence 3)act of notarizing articles, delivering to secretary of state, payment of required fees, acceptance by sec of state's office afterward organizational meeting is held

definition of franchisee and franchisor

Franchisee- person who purchases a franchise franchisor- own the overarching company,product and or patents

SBA and what does it do

Gov agency that offers financial assistance to businesses

What should be done with idle cash?

INVEST

What is incremental innovation, what is radical innovation?

Incremental and radical are both subjective, incremental is a small change where as radical is a major change

WHAT is business?

Individuals/organizations who are willing to earn a profit by providing goods/services that satisfy peoples' needs.

What are the different types of economic systems?

Market, mixed, socialism

What is financial value

Maximizing the wealth of shareholders Comes from profits and cash flows Converted into a return through dividends and realized capital gains (gains made on sale of stock)

What is Time Value of Money

Money is worth more in the present than in the future due to its potential earning capacity due to interest

Definition Of Risk

Prime mover of business. Risk is the probability of suffering damage, it's a function of uncertainty

Social entrepreneurship/ toms example

Process of using business techniques to solve a social issue. he didn't want to be dependent on donations

What are the two factors that determine an individual/organization's willingness to take risk?

Profit and need

R-C=P

Revenue- Cost= Profit

What is finance

The function in business that acquires funds for the firm and manages those fund w/ the firm

What is innovators dilemma

When a business/ organization is unable to keep up with market- lack of innovation

what are accrual and cash methods of accounting

a- reports revenue when its earned c-revenue is recorded when cash is received

What is cash management and why is it important

accelerate inflow, decelerate outflow, turn receivables, stretch payables, minimize inventory, project, project project

What is debt funding?

advantages- retain control, interest tax is deductible disadvantages- cash flow problems

capital budgeting process

analyzing the needs of the business and selecting the assets that'll make maximize its value long term assets- longer projects more risk less profitable companies have to pay higher costs

parts of a balance sheet

asset, liability, or equity

financial statements

balance sheet- uses balances and liabilities income statement-determines success of business in terms of profit cash flow- describes the movement of cash time value- details the movement of owners equity of a period of time

Why is innovation important for society

because its what lets us move forward and progress

What are the five sources of funding for start up companies

bootstrapping, friends and family, venture capitalists, angel investors, crowdfunding

what are the major sections of the business plan?

executive summary, competitive analysis, operations plan, funding request, financials, risk

What is financial and managerial accounting and some characteristics

f- information prepared for people outside the organization specific time period, specific format, concentrates on the business as a whole m-information prepared for people inside the organization no specific time period, no specific format, any part of the business

What are fixed and variable costs?

f-doesn't change with activity (rent) v- vary with activity (labor, production supplies)

What is a business plan

formal statement of goals

What is GAAP and FASB

generally accepted accounting principles, financial accounting standards board

What are horizontal and vertical mergers

h- mergers between companies produce same product. reduces number of firms in market v-merger between firms at different stages of production process

Why is risk so important to business?

he prime mover for business. Without a willingness to take risk business does not exist.

What is the difference between an idea opportunity?

idea: a thought or notion that exists in the mind opportunity: favorable set of circumstances that create a need/desire

parts of a statement of cash flow sheet

inflows and outflows of cash

wat is personal garantie and who uses it?

long term loans taken from financial institutions

What is lean start up?

process of getting the product out in the eyes of the consumers even though it might not be perfect

Define innovation

process of implementing creativity into results

What is product/ service innovation? what is process innovation?

process of improving the product or service being offered. Process of improving the process.

Why is IP important to the innovation process

provides economic incentive through creative destruction

difference between public and private accounting

public- deals with a lot of clients as well as public documents private- few number of clients and with private documents

how to start a business

register online and pay 50 bucks

what is the purpose of a business plan

run the business, provide financial statement

different types

s corp, c corp

Characteristics of successful entrepreneurship

self directed- self motivated tolerant of uncertainty passionate educated energetic

difference between small and large business

small <500 large>500

what is financial structure?

specific mixture of long term debt and equity used by a company to finance its operations

matching concept

supports reporting revenues and related expenses in the same period

What is leverage and what are the upsides and downsides to it?

the degree to which a business is utilizing borrowed money. leverage = risk

What is open innovation

using ideas that come from people outside the company

definition of limited liability and why is it important

when a persons financial income is limited to a fixed financial sum. its important because if the business loses money, the owners personal assets aren't affected

What does "needs" mean for business?

• ? A g/s that the consumer has to have. (Food, water).