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Questions and Answers
A corporation is a group acting as a single legal entity.
A corporation is a group acting as a single legal entity.
True (A)
A business model describes how a business will deliver its product to the market but not how it drives sales.
A business model describes how a business will deliver its product to the market but not how it drives sales.
False (B)
A subscription-based model involves one-time payment from a customer.
A subscription-based model involves one-time payment from a customer.
False (B)
An on-demand model connects customers with independent sellers through physical stores.
An on-demand model connects customers with independent sellers through physical stores.
A business plan is a written description of a business that would be established in the past.
A business plan is a written description of a business that would be established in the past.
A major goal of a business plan is to assess the feasibility of the business idea.
A major goal of a business plan is to assess the feasibility of the business idea.
Entrepreneurs do not need a business plan if they already have started the business.
Entrepreneurs do not need a business plan if they already have started the business.
The executive summary in a business plan highlights the management team and personnel.
The executive summary in a business plan highlights the management team and personnel.
Flashcards
Corporation
Corporation
A company or group of people legally recognized as a single entity.
Business Model
Business Model
A description of how a business will bring its product to market, generate sales, and interact with customers.
Subscription-Based Model
Subscription-Based Model
Customers pay a recurring fee for access to goods or services, often on a monthly or yearly basis.
On-Demand Model
On-Demand Model
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Business Plan
Business Plan
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Goal of a Business Plan
Goal of a Business Plan
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Why Entrepreneurs Need a Business Plan
Why Entrepreneurs Need a Business Plan
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When to Write a Business Plan
When to Write a Business Plan
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Study Notes
Types of Business Organizations
- Three main types of business organizations: sole proprietorships, partnerships, and corporations.
Sole Proprietorship
- A business owned by one person.
- Represents approximately three-quarters of all businesses in the United States.
- Characteristics include single ownership, no sharing of profit/loss, one person's capital, unlimited liability, fewer legal formalities, and sole control.
Partnerships
- A business structure involving two or more people.
- Represents 5% of all businesses.
- Examples include Warner Bros. Pictures (Harry, Albert, Sam, and Jack Warner), Hewlett-Packard (William "Bill" Redington Hewlett and David "Dave" Packard), and McDonald's (Richard James "Dick" McDonald and Maurice James "Mac" McDonald).
Corporations
- A company or group of people authorized to operate as a single entity in law.
- About 20% of all businesses.
- Often large, with significant profits.
Business Model
- Describes how a business will market and sell its products/services.
- Elements include: cost, core value, distribution management, marketing, product & services, competencies, and target customer.
Subscription Based Model
- Customers pay monthly or yearly for products/services.
- The customer decides the frequency of their payments.
B2C (Business-to-Consumer) Model
- Businesses sell products/services directly to individual customers.
B2B (Business-to-Business) Model
- Businesses sell products/services to other companies.
- Examples include wholesalers selling to retailers and manufacturers selling to wholesalers.
On-Demand Model
- A business model that connects customers with independent sellers/providers through an online platform.
Business Plan
- A written description of a future business.
- It guides entrepreneurs on choosing beneficial strategies.
- Elements of a business plan include: executive summary, management & organization, product/service plan, market plan, financial plan.
Goal of a Business Plan
- To assess the feasibility of the business idea.
- To develop strategies for the business idea.
- To create a realistic business plan.
- To create a specific business plan.
- To ensure the business plan is followed through.
Reasons Entrepreneurs Need Business Plans
- Risk reduction.
- Avoiding costly mistakes.
- Foreseeing demand fluctuations.
- Organizing activities beforehand.
- Setting sales, revenue & expense targets.
When to Create a Business Plan
- During the early stages of a business.
- For growth of an established business.
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