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39 Cards in this Set
- Front
- Back
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Define “entrepreneur.”
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Entrepreneur is a risk-taker
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What risks does a person take when she becomes the owner of a retail store?
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The risk a person takes when she becomes the owner of a retail store is the risk of going bankrupt
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In what ways is the owner of a business not his own boss?
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The ways the owner of a business is not his own boss are buying a franchise, joining chains, and government laws
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What are the benefits of working for another retailer before starting your own store?
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The benefits of working for another retailer before starting your own store are better exposure to retailing, gain well-rounded experience, learn the tricks of trade, and learn mistakes made by others
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How many years of related retailing experience did Timothy Eaton have before he became the sole proprietor of a retail store?
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How many years of related retailing experience did Timothy Eaton have before he became the sole proprietor of a retail store?
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What are four reasons for business failure?
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• The owner is not suited to the job: he or she lacks necessary business personality, education, training or experience
• The business is poorly managed: poor leadership, no goals or plans, no research • The owner is overly optimistic about chances for success • The store is in a poor location • The business is unable to match or better the competition • It is under-financed • It has a poor image and environment • The owner has a poor personal reputation • The business fails for reasons beyond the owner’s control: changes in gov’t regulations, noninsured losses, death of a partner |
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What research should a person do before deciding to become the owner of a store?
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A person should research the sufficient market research, location, knowledge, and training
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In what ways do existing stores have the competitive edge over new stores?
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The existing stores may have better/more knowledge of the market, better training, better location, more experience, better managed: good leadership, has goals/plans, and researched, well financed, good image and environment, and possibly good personal reputation.
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“A properly financed new business has enough money to do more than just open its doors.” Explain this statement.
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It means that a well-financed business may become successful, than just go bankrupt after a few years. They may even earn a positive reputation within the community.
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When does a business become insolvent?
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A business becomes insolvent when the business that fails to keep enough cash on hand to pay immediate debts.
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At what point is a business declared bankrupt?
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The point when a business declares bankrupt is when there is an insolvent business. Insolvent business is business that fails to keep enough cash on hand to pay immediate debts.
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Who are the major creditors of a retail store?
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The major creditor of a retail store I anyone who has loaned the business money, such as financial institutions and suppliers.
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What reasons, beyond the owner’s control, might force a business to close permanently?
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The reason are economic recessions, changes in government regulations, poor weather, postal strikes, noninsured losses, internal problems, death of major supplier, repeated robberies, and possibly death of partner.
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How does an appropriate store image contribute to a retail firm’s success?
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An appropriate store image contributes to a retail firm’s success by attracts customers. For example, if there was an unclean restaurant or bakery painted with unattractive colours, customers would most likely not go to these retailers.
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In what way(s) does the owner’s personal reputation affect her chances of success as a new store owner
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The way the store owner’s personal reputation affects her chances of success as a new store owner is that if the owner already has a bad reputation in the company, then people are most likely not going to shop at her store.
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How many owners are there in a sole proprietorship?
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There is one owner in a sole proprietorship
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Make a list of at least three retail operations in or around your community that are operated as sole proprietors.
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• Dollar shop
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What are three benefits of operating a retail business as a sole proprietorship?
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• Easiest form of business to establish, operate and terminate
• Little or no red tape, such as partnership agreements • needs to only check the municipal by-laws and apply for provincial retail vendor’s permit to be in business • owner has a lot of decision-making power • he/she is able to make quick decisions • size of business is not limited by the type of business ownership • all profits are income of the owner |
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What are three disadvantages of the sole proprietorship?
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• Owner loses the benefit of others’ opinions
• Required to carry out many business activities that he/she may not have sufficient talent/training to perform proficiently • Owner may be forced to sell personal belongings in order to pay (unlimited liability) |
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“The owner of a sole proprietorship has unlimited liability.” What does this statement mean?
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This statement means that the owner’s losses are not limited to the amount invested in the business. If he has more liabilities, but cannot pay with his business assets, he would then have to pay the liabilities with his personal assets
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A partnership is formed when two people pool their talents and money to own and operate a business. What is missing in this definition of a partnership?
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A partnership is formed when two or more people pool their talents and money to own and operate a business.
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Make a list of at least three retail operations in or around your community that are operated as partnership
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• Tom and Jerry Restaurant
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Identify three benefits of running a retail business as a partnership
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• Able to discuss decisions with one another
• Partnership tends to be an efficient run type of business and profits yielded per dollar invested tend to be higher than sole proprietorship • Good growth potential, as each partner who contributes money is able to borrow money • Existing partners can recruit more partners |
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What does “unlimited liability” mean to the members of a partnership?
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“Unlimited liability” means that partners’ losses are not limited to the amount each has invested in the business, and each partner is held responsible for the other’s debts or losses. In extreme cases, all partners may be forced to sell personal belongings to pay the debt.
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In what way is a silent partner silent?
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The silent partner is silent by having no say in the day-to-day operation of business
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What are the owners of a corporation called?
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The owners of a corporation are called shareholders
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How does one become a part owner of a public corporation?
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One becomes part owner of a public corporation by purchasing ownership shares.
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What must appear in a business’s name to signify that it is a corporation? Why?
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The terms incorporated, inc., limited, ltd., ltée in a business’s name to signify that it is a corporation because it warns suppliers and other lenders that the owners have limited liability
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) List at least three corporations that operate retail businesses in or around your community.
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• Canadian Tire
• McDonald Restaurants • Rona |
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18. Since owners of a public corporation do not operate the business on a day-to-day basis, who does?
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A board of directors operate the business on a day-to-day basis.
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19. What two sources of money are available to corporation but are not available to sole proprietorships?
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Two sources of money are available to corporation but are not available to sole proprietorships are the legal right to sell a predetermined number of ownership shares and to borrow money from the public by issuing bonds.
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What is the basic difference between a cooperative and a corporation?
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The basic difference a cooperative and a corporation is that a cooperative idea finds its roots in farming communities and a corporation are further separated into public and private corporation. A public corporation is usually sole proprietorships and partnerships that have been incorporated primarily to protect the owners’ personal property, that is, to gain limited liability for the business owner(s). A private corporation is owned by one or more shareholders (individuals and other corporations), who have purchased ownership shares.
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Name at least two retail businesses in or around your community that are consumer cooperatives
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• McDonald
• Donald’s Market • T&T • Safeway • Superstore |
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A franchise is not a form of business ownership. What is it?
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It is a license to use someone else’s trademark, products and business practices
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What fees does a franchise pay in order to “buy a franchise”?
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The fees a franchise must pay in order to “buy a franchise” are royalty fee
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What are six things a franchisor commonly provides franchisees?
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• Use of a successful company name and reputation
• National and regional sales promotion • A set of proven business practices: secret recipes, business operating manuals, a bookkeeping system • Access to field-tested products • A list of suppliers and volume purchase benefits • Up-to-date business information and technology • Managerial and employee training programs and aids • Store location advice • Store design and layout assistance • A protected trading area, or exclusive territory • Legal advice and financial assistance • Land and equipment leases |
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List at least three retail businesses in or around your community that are franchised operations.
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• McDonalds
• Burger King • Dairy Queen |
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Define a “chain store operation.”
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A “chain store operation” is four or more stores under one name that are centrally owned and managed and offer the same line of products.
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What is the difference between a voluntary chain and corporate chain?
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The difference between a voluntary chain and corporate chain is that a voluntary chain is a group of independent retailers sometimes form jointly owned wholesale operation. A corporate chain is a nation-wide chain that is centrally owned and managed corporations. Each local store is operated by a store manager who, as an employee of the corporate chain, follows the dictates of the head office.
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