Podcast
Questions and Answers
What method is used for determining the value of a business by using the price/earnings ratios of similar businesses?
What method is used for determining the value of a business by using the price/earnings ratios of similar businesses?
- Balance Sheet Technique
- Marketing Approach
- Asset Approach
- Earnings Approach (correct)
Which pair of terms correctly describes the process of thinking new things and doing new things?
Which pair of terms correctly describes the process of thinking new things and doing new things?
- Creativity, Innovation
- Innovation, Creativity (correct)
- Invention, Creativity
- Creativity, Invention
What term refers to a business that employs less than 100 people?
What term refers to a business that employs less than 100 people?
- Small Business (correct)
- Medium Business
- Mid-market
- Startup
Which of the following is NOT a benefit of owning a small business?
Which of the following is NOT a benefit of owning a small business?
Which form of business ownership is designed for a business owned and managed by one individual?
Which form of business ownership is designed for a business owned and managed by one individual?
What does 'Intellectual capital' refer to in a business context?
What does 'Intellectual capital' refer to in a business context?
In a partnership, the co-owners legally share a business’s assets, liabilities, and profits according to what?
In a partnership, the co-owners legally share a business’s assets, liabilities, and profits according to what?
What does UPA stand for in the context of business?
What does UPA stand for in the context of business?
Which type of competitors offer some of the same products and services?
Which type of competitors offer some of the same products and services?
What do you call a corporation that conducts business in the state where it is incorporated?
What do you call a corporation that conducts business in the state where it is incorporated?
What are the key methods for preparing an advertising budget?
What are the key methods for preparing an advertising budget?
What factors play a role in determining the right price for a product or service?
What factors play a role in determining the right price for a product or service?
What is the purpose of promotion in marketing?
What is the purpose of promotion in marketing?
What differentiates a small business from its competitors and gives it a unique position in the market?
What differentiates a small business from its competitors and gives it a unique position in the market?
Which type of information is commonly used in data mining?
Which type of information is commonly used in data mining?
What can be a disadvantage of buying an existing business?
What can be a disadvantage of buying an existing business?
In franchising, what do semi-independent business owners receive in return for paying fees and royalties to a parent company?
In franchising, what do semi-independent business owners receive in return for paying fees and royalties to a parent company?
What can be an advantage of buying an existing business according to the text?
What can be an advantage of buying an existing business according to the text?
What should a company consider when selecting advertising media?
What should a company consider when selecting advertising media?
Which structure features elements of a partnership and a corporation?
Which structure features elements of a partnership and a corporation?
What is a natural part of the creative process?
What is a natural part of the creative process?
What areas should a business plan presentation cover?
What areas should a business plan presentation cover?
What is a distinction made only for federal income tax purposes?
What is a distinction made only for federal income tax purposes?
What is a road map an entrepreneur draws up to fulfill a company's mission?
What is a road map an entrepreneur draws up to fulfill a company's mission?
What is a potential drawback of owning a small business related to income?
What is a potential drawback of owning a small business related to income?
Which drawback of owning a small business is associated with the risk of losing all invested capital?
Which drawback of owning a small business is associated with the risk of losing all invested capital?
What potential drawback involves the need for long hours and hard work in small business ownership?
What potential drawback involves the need for long hours and hard work in small business ownership?
Which drawback is related to the lower quality of life until a small business becomes profitable?
Which drawback is related to the lower quality of life until a small business becomes profitable?
Which potential drawback of owning a small business involves always being under pressure to succeed?
Which potential drawback of owning a small business involves always being under pressure to succeed?
What potential drawback highlights the fact that small business owners are liable for all debts, losses, and lost capital if the business fails?
What potential drawback highlights the fact that small business owners are liable for all debts, losses, and lost capital if the business fails?
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Study Notes
Advantages and Disadvantages of Buying an Existing Business
- One advantage of buying an existing business is leveraging the experience of the previous owner
- A disadvantage of buying an existing business is paying for “ill will”
Types of Business Ownership
- Corporation: a corporation conducts business in the state in which it is incorporated
- Partnership: co-owners (partners) legally share a business’s assets, liabilities, and profits according to the terms of an established partnership agreement
- Joint Venture: semi-independent business owners pay fees and royalties to a parent company in return for the right to become identified with its trademark, to sell its products or services, and often to use its business format and system
- Sole Proprietorship: a business owned and managed by one individual
Marketing and Advertising
- The purpose of promotion in marketing is to inform consumers about a product or service and influence them to make a purchase
- Factors that determine the right price for a product or service include cost structure, market assessment, and desired image
- Methods for preparing an advertising budget include affordable, competitor matching, and percentage of sales
Entrepreneurship and Innovation
- Creativity refers to thinking new things, and innovation refers to doing new things
- Intellectual capital refers to the knowledge and information a company acquires and uses to create a competitive advantage in its market segment
- Failure is a natural part of the creative process
Business Planning
- A business plan is a road map an entrepreneur draws up of the actions necessary to fulfill a company's mission, goals, and objectives
- Areas that a business plan presentation should cover include the problem your product or service solves
Types of Franchising
- Franchising: a method of distributing products or services where a franchiser grants a franchisee the right to operate a business using the franchiser's business system and trademark
- Pure franchising (or comprehensive franchising or business format franchising): a franchisee gets the ability to use the brand name, products, and complete business system of the franchiser
Drawbacks of Owning a Small Business
- Uncertainty of income
- Risk of losing entire invested capital
- Long hours and hard work
- Lower quality of life until the business gets established
- High levels of stress
- Complete responsibility
- Discouragement
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