Business Concepts Flashcards

Questions and Answers

What are the three disadvantages of selling physical products?

Needing employees to track the supply, shipping and packaging costs, needing storage space.

Which corporation uses a double layer of taxation?

C Corporation

Which describes the role Jane plays in the full-detail carwash?

Stockholder

When an employee is hired, they sign a contract that outlines the employee's and the employer's _________ and the terms of employment.

Obligations Signup and view all the answers

Which two forms of compensation does Jeff receive for his work?

Piece work Signup and view all the answers

In which business life cycle is Mike?

Take off Signup and view all the answers

What might the design team need to do during the design thinking process?

Revisit previous stages Signup and view all the answers

A common financial risk that entrepreneurs encounter is _______.

Bankruptcy Signup and view all the answers

What are two benefits of entrepreneurship?

Setting one's own hours, having set pay. Signup and view all the answers

What type of business opportunity is Elizabeth a part of?

Network Marketing Signup and view all the answers

One should know if there is _____ for a product before taking on a business opportunity.

High demand Signup and view all the answers

An executive summary should briefly explain everything in a business plan in ___ pages.

Two Signup and view all the answers

Which intellectual property law best protects Ronda's recipe from being stolen or replicated by other competitors?

Trade Secret Signup and view all the answers

One value of using _____ material is that they are usually well-recognized, which may help to boost sales.

trademarked Signup and view all the answers

Which two documents do many companies have their employees sign to help mitigate the risk of sharing trade secrets?

NDA Signup and view all the answers

What type of transaction is between Appliance World and Super Steel?

B2B Signup and view all the answers

A lean canvas should only be ___ page long, discussing key information, without all the details one would see in a business plan.

One Signup and view all the answers

What is the difference between small businesses and entrepreneurs?

Small business owners are not always interested in taking on new business opportunities Signup and view all the answers

Which two forms of compensation is Tommy receiving for his work?

Salary Signup and view all the answers

What type of e-commerce product did Tim purchase?

Digital Signup and view all the answers

What is the main drawback of a sole proprietorship?

They have unlimited personal liability. Signup and view all the answers

Anytime someone wants to use a _________ on their products, they must obtain a license to use them.

Brand name Signup and view all the answers

What are the two advantages of selling digital products?

Delivery is instantaneous and inexpensive, not needing physical storage, inventory, or additional employees. Signup and view all the answers

What type of e-commerce product did Rose order?

Physical Signup and view all the answers

Which best describes the role Billie plays in the toy manufacturing company?

CFO Signup and view all the answers

Which two forms of compensation does Korryn receive for her work?

Hourly Signup and view all the answers

In which business life cycle is Sharon?

Success Signup and view all the answers

In which business life cycle is Dylan?

Pivot or persist Signup and view all the answers

Which is a characteristic of a business opportunity?

The buyer has a guaranteed profit of at least 10% of the seller's original price for the product. Signup and view all the answers

Network marketers make their money through ____________.

commissions Signup and view all the answers

What type of business opportunity is Joey a part of?

Franchise Signup and view all the answers

Factors that aid in determining whether or not a business opportunity is viable include market size, _______, manage of cash flow, management skillsets, and passion.

Relationships Signup and view all the answers

What else should one consider when evaluating the reliability of the management for a business opportunity?

One's own skillset Signup and view all the answers

As a result, companies may want to use _______ materials.

trade secret Signup and view all the answers

What is a small business?

Owned and managed by one individual or sometimes a small group of people with a focus on generating profits Signup and view all the answers

What is an entrepreneur?

An individual with an idea to offer an innovative product or service about which they are passionate Signup and view all the answers

What is a franchise?

A business where the owner licenses their operations, products or services, branding, and knowledge for a royalty fee Signup and view all the answers

What is an S corporation?

A for-profit corporation with a lower tax rate that prevents the company from being double taxed Signup and view all the answers

What is a C Corporation?

Profits are taxed when earned, and then the shareholders' dividends are taxed after they are distributed. This legal structure is best for international businesses Signup and view all the answers

What is an LLC (Limited Liability Company)?

Allows the owners to pay taxes on their profits or losses through their own taxes using a personal tax rate. This legal structure is ideal for a single owner seeking low risk. Signup and view all the answers

What is a sole proprietorship?

Easy to create, but comes with unlimited liability Signup and view all the answers

What is a partnership?

Shared financial backing Signup and view all the answers

What is a non-profit?

Has no ownership and pays no US federal taxes Signup and view all the answers

What is a business plan?

A written document that details how a business will be structured, managed, run, and grown. Signup and view all the answers

What is a pitch deck?

A brief overview of a business plan, the funding needed, and financial projections. Signup and view all the answers

What is a lean canvas?

Covers problems and solutions, value proposition, marketing channels, key metrics, costs, and revenue without all of the business plan details Signup and view all the answers

What two things are required to do before legally using copyrighted materials?

Pay a licensing fee Signup and view all the answers

What must happen before one can use someone else's patent?

They must obtain ownership of the patent. Signup and view all the answers

Study Notes

Disadvantages of Selling Physical Products

Requires employees for supply tracking, increasing operational costs.
Shipping and packaging add significant expenses.
Storage space is needed, leading to higher overhead costs.

Corporate Taxation

C Corporations face double taxation on profits (taxed at corporate level and again as dividends).

Investment Roles

Shareholders like Jane have a stake in the company and may influence management decisions.

Employment Contracts

Contracts define obligations for both employees and employers, clarifying responsibilities.

Compensation Structures

Piece work pays based on the number of tasks completed.
Commission rewards employees for securing additional sales.

Business Life Cycle Stages

Businesses, like Mike's doggy daycare, may be in the "Take Off" stage, indicating growth potential.

Design Thinking Process

Design teams may need to revisit earlier stages, such as ideation or prototyping, for refinement.

Financial Risks of Entrepreneurship

Bankruptcy is a significant risk that starts businesses may face.

Advantages of Entrepreneurship

Owners enjoy flexibility in scheduling and earning potential.

Marketing Models

Elizabeth participates in network marketing, earning commissions from her team's sales.

Demand for Products

High demand is crucial for assessing the viability of a business opportunity.

Executive Summaries

Should concisely summarize a business plan in approximately two pages.

Intellectual Property Protection

Trade secrets can safeguard proprietary recipes from competitors.

Use of Trademarked Materials

Trademarked materials can enhance brand recognition and boost sales.

Risk Mitigation in Companies

Companies often use NDAs and confidentiality agreements to protect trade secrets.

Transaction Types

B2B transactions, like that between appliance manufacturers and suppliers, involve business-to-business dealings.

Lean Canvas Overview

Should be a one-page outline emphasizing key business aspects without extensive details.

Small Business vs. Entrepreneurship

Small businesses may not actively pursue new opportunities compared to entrepreneurs.

Equity Compensation

Employees like Tommy can receive part of their pay in stock, supplementing their salary.

Digital E-commerce Products

Tim's immediate access to a movie after payment indicates a digital product purchase.

Sole Proprietorship Limitations

Sole proprietors face unlimited personal liability for business debts.

Licensing Brand Names

Brands require licenses for others to legally use their names on products.

Benefits of Digital Products

Digital products offer instant delivery and reduce the need for inventory and storage.

Physical E-commerce Products

Rose's order from an out-of-state bakery signifies the purchase of a physical product.

CFO Responsibilities

Billie oversees budgets and negotiates financial collaborations as CFO.

Hourly and Equity Compensation

Employees like Korryn are compensated hourly with equity shares in the company.

Business Life Cycle Insights

Sharon's law firm reflects success in its business lifecycle due to increased profitability.

Business Challenges

Dylan's grocery store faces challenges, indicating it may need to pivot or persist.

Business Opportunity Characteristics

Buyers may expect guaranteed profits to determine opportunity viability.

Earnings in Network Marketing

Commissions are crucial for income generation in network marketing businesses.

Franchise Structure

Joey's restaurant operates as a franchise, following established operational guidelines for a fee.

Viability Assessment Factors

Market size, cash flow management, relationship management, and personal passion influence opportunity viability.

Management Reliability

Assessing management quality should involve a review of one’s own skills and capabilities.

Tested Processes

Companies value proven processes and may use trade secrets to maintain competitive advantages.

Small Business Definition

Typically owned and operated by individuals or small groups, focusing on profit generation.

Entrepreneurial Attributes

Entrepreneurs are passionate individuals driven to innovate and market new products or services.

Franchise Definition

Franchises allow business owners to license operational methods and branding for a fee.

S Corporation Benefits

S Corporations enjoy lower tax rates, avoiding double taxation of profits.

C Corporation Tax Structure

C Corporations are taxed at both the corporate level and again on dividends distributed to shareholders.

LLC Advantages

LLCs provide owners with limited liability protection while allowing for pass-through taxation.

Sole Proprietorship Features

Easy to establish with the trade-off of unlimited liability for personal assets.

Partnership Dynamics

Partnerships provide shared financial backing among individuals or entities.

Non-Profit Organizations

Non-profits operate without ownership and are exempt from US federal taxes.

Business Plans

Comprehensive documents that outline structural, managerial, and operational aspects of the business.

Pitch Deck Purpose

A concise presentation to summarize business plans, funding needs, and financial outlooks.

Lean Canvas Essentials

Offers key details like problems, solutions, and revenue streams without extensive elaboration.

Legal Requirements for Copyrighted Materials

Licensing agreements and payment of fees are necessary to legally use copyrighted or trademarked materials.

Patent Usage

Legal prerequisite to obtain a patent is securing ownership to utilize the rights associated with it.

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Description

This set of flashcards covers essential business concepts, including disadvantages of selling physical products and details about corporate taxation. Enhance your knowledge about investment strategies and management decisions in companies.