Chapter 5

Chapter 5 - Manter 1 Chapter 5 Chapter 5 Options for...

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Manter 1 Chapter 5 Chapter 5 – Options for Organizing Small and Large Businesses Small Business – firm that is independently owned and operated, not dominant in its field, and meets industry specific size standards for income or number of employees. Home-based Businesses – company operated from the residence of the business owner. Small Business Advantages – filling isolated niches, innovation, lower costs, superior customer service Overhead Costs – business expenditures such as rent and utility expenses that are not directly related to providing specific goods and services. Business Plan – written document that provides an orderly statement of a company’s goals, the methods by which it intends to achieve those goals, and the standards by which it will measure achievements. Business plan usually includes – executive summary, introduction, financial and marketing sections, and resumes of principals. Small Business Administration (SBA) – federal agency that assists small businesses by providing management training and consulting, financial advice, and support in securing government contracts. Microloans – Small Business Administration-guaranteed loans of less than $25,000 made to start-ups and other very small firms. Small Business Investment Company (SBICs) – business licensed by the SBA to provide loans to small businesses. Set-aside Programs – component of government contract specifying that certain government contracts (or portions of those contracts) are restricted to small businesses and/or to women- or minority-companies. Business Incubator – organization that provides low-cost shared facilities on a temporary basis to small start-up ventures. Glass Ceiling – feeling blocked from opportunities for advancement. Franchising – contractual agreement that specifies the methods by which a dealer can produce and market a supplier’s good and service. Franchisee – small-business owner who contracts to sell the good or service of a supplier (the franchisor) in exchange for a payment (usually a flat fee plus a percentage of sales).
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Manter 2 Chapter 5 Franchisor – business owner who permits the franchisee to sell the products and use its name, as well as providing a variety of marketing, management, and other services in return for the payment of fees and/or royalties based on sales by the franchisee. Sole Proprietorship – form of business ownership in which the company is owned and operated by one person. Partnership – form of business ownership in which the company is operated by two or more people who are co-owners by voluntary legal agreement. Corporation – business that stands as a legal entity with assets and liabilities separate from those of its owner(s). S Corporation – modified form of the traditional corporation structure often used by firms with
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Chapter 5 - Manter 1 Chapter 5 Chapter 5 Options for...

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