Small Business Management Exam 2

  1. a customer must have?
    purchasing power
  2. sole proprietorship advantages
    ease of starting - simplest to form

    low cost of  orgnization

    freedom to manage

    • profit incentive - for tax  purposes
    •      profit added  to personal income
    •      losses deducted from personal income
  3. sole proprietorship disadvantages
    unlimited risk

    limited life (continuity)

    limited size

    limited management  ability
  4. corporation advantages
    continuity  in existence

    ease of ownership

    limited liability of stockholders

    large  financial capability

  5. corporation disadvantages
    legal restriction on activities

    separation of ownership and control

    lack of personal interest

    double taxation of earnings
  6. sources of market data
    census of population

    census of business

    census of housing

    census of manufacturing
  7. what governs purchasing power?
    economic base
  8. what is associated with an area's economic base?


    population  growth
  9. angels
    private investors who are willing to supply financing for new and/or risky small venture startups
  10. better business bureau
    association of business firms that  promotes  ethical conduct by all  business firmsc in  a community
  11. business policies
    fundamental statements that serve as guides to mnagement practice
  12. C corporation
    an ordinary corporation taxed as a separate legal entity
  13. competition
    the practice of tryng to obtain something that is being sought by others under similar circumstances at  the same time
  14. corporation
    a legal form of organization whereby a legal entity is authorized by  a state to operate a business under the entity's charter or articles  of incorporation
  15. customer profile
    a description of potential customers in a taarget market
  16. delegation of authority
    a superior's act of grnting  to subordinates, on the basis of competence, the right  to act or decide
  17. direct forecasting
    a forcasting method in which sales is the estimated variable
  18. economic base
    the wealth produced in or near a community that provides employment and income to the local population
  19. general partner
    a partner who has unlimited personal liability
  20. indirect forecasting
    a forcasting method in which variables related to sales are used to project future sales
  21. Limited liability company
    a corporation in which the stockholders have limited liability but pay personal income taxes on business profits
  22. limited partner
    a partner who is not active in its management and has limited personal liability
  23. market
    a group of potential customers possessing purchasing power and unsatisfied needs
  24. market survey/analysis
    a study that is used by a business to determine where the potential customers are located
  25. marketing
    marketing management
    the process of planning and execting the development, pricing, promotion, and distribution of an organization's goods or services
  26. partnership
    a form of legal organization in which a business association made up of two or more persons is formed for the purpose of carrying on as co-owners
  27. S corporation
    a domestic corporate identity that is treated as an individual for income tax purposes
  28. sole proprietorship
    a legal form of organization whereby the business is owned and operated by one person
Card Set
Small Business Management Exam 2
Small Business Management Exam 2