by eh8537


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sole proprietorship
business ownership in which there is no legal distinction between the sole proprietor's status as an individual and his or her status as a business owner
corporation  
legal organization with assets and liabilities separate from those of its owner(s)
partnership
association of two or more persons who operate a business as co‐owners by voluntary legal agreement
S corporations 
corporations that do not pay corporate taxes on profits; instead, profits are distributed to shareholders, who pay individual income taxes
limited‐liability companies (LLCs) 
corporation that secures the corporate advantage of limited liability while avoiding the double taxation characteristic of a traditional corporation
not‐for‐profit corporations 
 organization whose goals do not include pursuing a profit
acquisition  
agreement in which one firm purchases another
franchisee  
individual or business firm purchasing a franchise
horizontal merger 
merger that joins firms in the same industry for the purpose of diversification, increasing customer bases, cutting costs, or expanding product lines.
vertical merger  
merger that combines firms operating at different levels in the production and marketing process
merger
 agreement in which two or more firms combine to form one company
franchising  
contractual business arrangement between a manufacturer or other supplier, and a dealer such as a restaurant operator or retailer
franchisor  
firm whose products are sold to customers by the franchisee
preferred stock 
shares that give owners limited voting rights, and the right to receive dividends or assets before owners of common stock
Common stock 
shares that give owners voting rights but only residual claims to the firm's assets and income distributions
venture capital  
money invested in a business by another business firm or group of individuals in exchange for an ownership share
microloans

 small‐business loans often used to buy equipment or operate a business
angel investors
 wealthy individuals who invest directly in a new venture in exchange for an equity stake.
venture capitalists  
business firms or groups of individuals that invest in new and growing firms in exchange for an ownership share.  
debt financing
borrowed funds that entrepreneurs must repay
equity  financing 
funds invested in new ventures in exchange for part ownership
Small Business Investment Companies (SBICs) 
SBA‐licensed organizations that use their own capital, supplemented with government loans, to invest in small businesses
Characteristics of a Entrepreneur 

  • vision

  • high energy levels 

  • the need to achieve

  • self‐confidence

  • optimism

  • tolerance for failure

  • creativity

  • tolerance for ambiguity 

  • internal locus of control.

Entrepreneur
 person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business.
Social Entrepreneur 
 person who recognizes societal problems and uses business principles to develop innovative solutions.
classic entrepreneurs
person who identifies a business opportunity and allocates available resources to tap that market
intrapreneurship 
 process of promoting innovation within the structure of an existing organization
serial entrepreneurs 
person who starts one business, runs it, and then starts and runs additional businesses in succession
lifestyle entrepreneur  
 person who starts a business to reduce work hours and create a more relaxed lifestyle
small business 
independent business with fewer than 500 employees, not dominant in its market
joint venture
partnership between companies formed for a specific undertaking
4 eras of marketing 
  • production era
  • sales era
  • marketing era
  • relationship era
Production Era 
stressed efficiency in producing quality products
Sales Era 
businesses assumed that consumers would buy as a result of energetic sales efforts
Marketing Era 
1950s, organizations began to adopt a consumer orientation
Relationship Era 
1990s, companies emphasize customer satisfaction and building long term business relationships
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