a method of classifying inventory items with categories which are of hiigh value, less costly, and/or low cost items.
Private investors who are willing to supply financing foe new and/or risky small venture startups.
The cost of a fixed asset less accumulated depreciation.
The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised;
also, a social movement that seeks to strengthen the rights of consumers.
the registered right of a creator to reproduce, publish, and sell the work which is the product of the intelligence and skill of that person.
the wealth produced in or near a community tht provides emmployment and income to the local population
Economic Order Quntity
the quantity to be purchased which minimizes total costs
One who organizes, manages, and assumes the risk of a business firm or venture
obtaining cash before payments are received from customers by selling off one's accounts receivable to a third party.
an intngible asset such as the name of a funeral home;
also, an intangible asset which enables business to earn a profit in excess of the normal rate of profit earned by other businesses of the same kind
Human resource planning
developing a comprehensive strategy for meeting future hman resource needs.
the dependency of business on one another
those goods or stock of goods which are held for resale
the art of and science of motivating people toward the achievement of a goal.
a group of potential customers possessing purchasing power and unsatisfied needs.
a study that is used by a business to determine where the potential customers re located
New venture plan
a written description of a new idea that projects marketing, operaational, and financial aspects of proposed business
the process of forming a pool of qualified applicants for tasks that need to be filled
Small Business Administraton
the principal government agency concerned with the financing, operation, and management of small businesses
a physical asset that possesses genuine value
a type of aset that is not able to be physically touched but is retained by a small busines because of its genuine value appeal
an intangible asset that is a distinct name, sign, or symbol that the federal government grants exclusive rights to use for a specified period of time
the difference between current assets and current liabilities;
consisting of cash, inventories, and accounts receivable
Advantages of internal sources of funding
- 1. It is very low cost and may save money
- 2. Careful management makes external sources more available
- 3. Low risk
- 4. Maximum flexibility
- 5. You retain control
Advantages of leasing over buying
- a. avoidence of obsolescence
- b. release of funds for working capital
- 1. Suitability for the intended use
- 2. Customer accessability
- 3. Internal and External traffic flow
- 4. Room for expansion
- 5. Internal and external appearance
- 6. Environmental conditions
- 7. Parking facilities
- 8. Equipment or fixture requirements
Capital invested by owners
Those that are generated by the invested capital of a firm
A specialized debt vehicle used by certain retailers such as car, boat, and furniture dealers.
In a flooring arrangement, the lender retains a security interest in the merchandise.
The business pays a monthly interest charge and pays off the principal as each item is sold.
Generally, flooring arrangements are revolving and can be renewed periodically.
Objectives of a retail store
- 1. To properly display to maximize sales
- 2. Customer conveniences and service
- 3. Convenience and attractiveness to contribute to a customers continued patronage
- 4. Efficiant layout contributes to the operation economy
- 5. Protection of store merchandise and equipment against shoplifting
- 6. Customer traffic flow is generally to the right
Small business based on number of employees
- Mining/Manufacturing - 500-1500
- Wholesale - up to 500
- Retail - 25-100
- Service - 25-300
Causes of business failure
- Neglect - 3.9%
- Disaster - 4.6%
- Fraud - 2.2%
- Economic causes - 63.5%
- Financial causes - 24.1%
- Strategy causes - 1.0%
Type of business activity
Business that makes finished goods from raw materials by hand or machinery.
Type of business activity
Business that purchases finished goods for resale.
Type of business activity
Business that provides a service instead of a product.
unsecured term loan
issued to a company that can prove it has financial strength & profitability to repay the loan
owners contribute 40-50% of the required equity
Market Value approach
- Valuation based upon sale of similar business
- 1. Depends upon similarity of business
- 2. recent sales of like businesses
- 3. Real estate appraisals rely extensively on this method
Replacement cost approach
- Asset-valuation that relies on replacement value of the business
- 1. Attempts to find replacement value of tangible assets being purchased
- 2. Starts with recent balance sheets
- 3. method usually ignores intangible assets
- 4. Difficult if small business has poor records; need good accounting recourds
Liquidation value approach
- Asset based method that requires the salvage value of the business's assets
- 1. Provides a "minimum" value - worst case scenario
- 2. Worst method for the seller
- Valuation based on the business's past earnings record
- 1. Centers on estimating the amount of potential income that may be produced by the business
- 2. Capitalization of the average earning of the company (usually 5 year average).
- 3. The average annual earnings are divided by expected rate of return
- 4. Funeral home POR is 12.9% before taxes
what is associated with an area's economic base?
- population growth
Various areas of a retail store differ markedly in sale value
Most to Least valuable floor space in retail store
- 1. Right front
- 2. Center front & Right middle
- 3. Left front center middle
- 4. Left middle
- 5. Least is back
- 1. First floor (ground)
- 2. Higher the floor, lower selling value
- 3. Basement