Corporate ownership is one of three broad categories of legal ownership of a business, along with sole proprietorship and partnership. In a sole proprietorship, the owner is personally liable for his or her business's debts and losses, there is little distinction made between personal and business income, and the business terminates upon the death of the owner or the owner's decision to change the legal character of the firm (by relinquishing part or all of his or her ownership in the enterprise).
An individual retirement account (IRA) is a tax-deferred retirement program in which any employed person can participate, including self-employed persons and small business owners. In most cases, the money placed in an IRA is deducted from the worker's income before taxes and is allowed to grow tax-deferred until the worker retires.
The issue of industrial safety evolved concurrently with industrial development in the United States. Of central importance was the establishment of protective legislation, most significantly the worker's compensation laws, enacted at the start of the twentieth century, and the Occupational Safety and Health Act, enacted in 1970.
Industry analysis is a tool that facilitates a company's understanding of its position relative to other companies that produce similar products or services. Understanding the forces at work in the overall industry is an important component of effective strategic planning.
Life cycle models are not just a phenomenon of the life sciences. Industries experience a similar cycle of life.
Information brokers provide, for a fee, information retrieval from publicly accessible data sources, most often online databases. Information brokering first emerged as a business opportunity for individuals in the mid-1950s.
An initial public offering (IPO) is the process through which a privately held company issues shares of stock to the public for the first time. Also known as "going public," an IPO transforms a small business from a privately owned and operated entity into one that is owned by public stockholders.
Innovation is the basic driving force behind entrepreneurship and the creation of small businesses. When an individual comes up with an idea that has not previously been explored, or a niche that larger businesses have not been able to exploit, he or she may be able to turn that idea into a successful business venture.
Insurance pooling is a practice wherein a group of small firms join together to secure better insurance rates and coverage plans by virtue of their increased buying power as a bloc. This practice is primarily used for securing health and disability insurance coverage.
Intellectual property is an intangible creation of the human mind, usually expressed or translated into a tangible form, that is assigned certain rights of property. Examples of intellectual property include an author's copyright on a book or article, a distinctive logo design representing a soft drink company and its products, unique design elements of a web site, or a patent on the process to manufacture chewing gum.
The term "intercultural communication" is often used to refer to the wide range of communication issues that inevitably arise within an organization composed of individuals from a variety of religious, social, ethnic, and technical backgrounds. Each of these individuals brings a unique set of experiences and values to the workplace, many of which can be traced to the culture in which they grew up and now operate.
Lenders of money profit from such transactions by arranging for the borrower to pay back an additional amount of money over and above the sum that they borrow. This difference between what is lent and what is returned is known as interest.
The Internal Revenue Service (IRS) is the agency of the U.S. Department of the Treasury responsible for collecting income taxes from individuals and businesses within the country.
A international exchange rate, also known as a foreign exchange (FX) rate, is the price of one country's currency in terms of another country's currency. Prior to 1971, exchange rates were fixed by an agreement among the world's central banks.
International marketing takes place when a business directs its products and services toward consumers in a country other than the one in which it is located. While the overall concept of marketing is the same worldwide, the environment within which the marketing plan is implemented can be dramatically different from region to region.
An Internet domain name is a string of typographic characters used to describe the location of a specific individual, business, computer, or piece of information online. Formally known as the Uniform Resource Locator or URL, it is often considered to be the address of a certain World Wide Web site.
Internet payment systems refer to the various methods by which individuals and companies doing business online collect money from their customers in exchange for the goods and services they provide. A number of different forms of payment exist for online purchases, and more are being developed all the time.
Internet security is a broad term that refers to the various steps individuals and companies take to protect computers or computer networks that are connected to the Internet. One of the basic truths behind Internet security is that the Internet itself is not a secure environment.
An Internet Service Provider (ISP), sometimes called an Internet Access Provider, is a company that supplies individuals and businesses with access to the Internet. An ISP acts as an intermediary between a small business's computer system and the Internet.
Internships are arrangements in which college students lend their talents to companies in return for an opportunity to develop business skills and gain exposure to the work environment. Many internship programs do not compensate interns financially—though some companies make exceptions to this general rule, either voluntarily or to meet state guidelines—but such positions are nonetheless often quite beneficial to the students who participate, for they receive "real world" business experience and an early opportunity to impress potential employers.
Although interpersonal communication can encompass oral, written, and nonverbal forms of communication, the term is usually applied to spoken communication that takes place between two or more individuals on a personal, face-to-face level. Some of the types of interpersonal communication that are commonly used within a business organization include staff meetings, formal project discussions, employee performance reviews, and informal chats.
An intranet often gets confused with the Internet. While there are a lot of similarities between them, they really are two different things.
Intrapreneurs are employees who work within a business in an entrepreneurial capacity, creating innovative new products and processes for the organization. Intrapreneurship is often associated with larger companies that have taken notice of the rise in entrepreneurial activity in recent years; these firms endeavor to create an environment wherein creative employees can pursue new ways of doing things and new product ideas within the context of the corporation.
A patent is a document that secures to an inventor the exclusive right to sell, make, or otherwise use his or her invention for a specified number of years. The document details the terms under which the government has granted the inventor full possession of the invention.
An inventory is a detailed, itemized list or record of goods and materials in a company's possession.
Inventory control systems maintain information about activities within firms that ensure the delivery of products to customers. The subsystems that perform these functions include sales, manufacturing, warehousing, ordering, and receiving.
Investor presentations are an important but often overlooked aspect of entrepreneurial efforts to secure financing for their businesses. Presentations are particularly important to small business owners hoping to raise money from private investors.
Once a privately held company issues shares of stock to the public—through an initial public offering (IPO), for example—it incurs a number of new responsibilities related to investor relations and reporting requirements. Also known as "going public, " an IPO transforms a small business from a privately owned and operated entity into one that is owned by public stockholders.
Each year, the Internal Revenue Service (IRS) conducts audits on individuals and businesses to ensure that they are in compliance with U.S. tax law.
ISO 9000 is a set of international standards of quality management that have become increasingly popular for large and small companies alike. "ISO is grounded on the 'conformance to specification' definition of quality, " wrote Francis Buttle in the International Journal of Quality and Reliability Management.
At the heart of the recruitment process lies the general concept that a company needs to hire people to complete certain tasks or group of tasks within the organization. The description of the various responsibilities of each position can usually be found within the "job description" or "job specification" that is typically put together by business owners or managers.
Job sharing is a flexible work option in which two or possibly more employees share a single job. For example, one person may work in a certain position Monday and Tuesday, and a second person may occupy that same position Thursday and Friday.
A job shop is a type of manufacturing process structure where small batches of a variety of custom products are made. In the job shop process flow, most of the products produced require a unique set-up and sequencing of processing steps.
A joint venture is a business enterprise under-taken by two or more persons or organizations to share the expense and (hopefully) profit of a particular business project. "Joint ventures are not business organizations in the sense of proprietorships, partner-ships or corporations," noted Charles P.
A Keogh Plan is an employer-funded, tax-deferred retirement plan designed for unincorporated businesses or self-employed persons, including those who earn only part of their income from self-employment. Covered under Section 401 (c) of the tax code, Keogh plans are named after Eugene Keogh, the congressman who first came up with the idea.
A labor surplus area is an economic region in which the number of prospective—and qualified—employees for positions with a company or companies exceeds the number of jobs available. This state of affairs can be an important component in business success, for businesses operating in labor surplus areas can typically find the personnel they need to conduct their operations at lower payroll expense than can businesses that may have to offer more generous compensation packages to secure even mediocre employees.
A labor union is an organization of wage earners or salary workers established for the purpose of protecting their collective interests when dealing with employers. Though unions are prevalent in most industrialized countries, union representation of workers has generally declined in most countries over the past 30 to 40 years.
Labor unions are commonly associated with big business and giant industries, but many small business owners find that unions are not limited to the government sector or to corporate behemoths such as General Motors, UPS, and Boeing. Labor unions are not as powerful or as plentiful as they were a few generations ago.
Layoffs and downsizing are both terms that refer to reductions that companies make in the number of employees on the payroll, although the term "layoff" is used more often to refer to temporary displacement, while "downsizing" generally has more permanent connotations. Other terminology sometimes used in this regard include reductions in force (RIF), right-sizing, restructuring, and reorganization.
Learning curves graphically portray the costs and benefits of experience when performing routine or repetitive tasks. Also known as experience curves, cost curves, efficiency curves, and productivity curves, they illustrate how the cost per unit of output decreases over time as the result of accumulated workforce learning and experience.
A lease is a contract between an owner and a user of property. In business lease agreements, the owner (commonly known in lease arrangements as the lessor) receives financial compensation and in exchange, the tenant (also known as lessee) is given the right to operate his or her business on the property.
Legal services are an important consideration for any business owner, but especially for small business owners, who often face a number of legal hurdles. Protecting the owner's personal assets from lawsuits against the business, ensuring protection for the business against discrimination, wrongful termination, and sexual harassment lawsuits, and handling employee contracts, copyright claims, and incorporation are just a few of the legal issues that commonly face small business owners.
A letter of intent is essentially a document that summarizes the major ingredients of a proposed transaction, including the price, payment method, and important target dates (for contract signing and closing). In most cases, the letter of intent is not legally binding, but it is nonetheless regarded as a useful tool.
The term leveraged buyout (LBO) describes an acquisition or purchase of a company financed through substantial use of borrowed funds or debt. In fact, in a typical LBO, up to 90 percent of the purchase price may be funded with debt.
A liability is a debt assumed by a business entity as a result of its borrowing activities or other fiscal obligations (such as funding pension plans for its employees). Liabilities are paid off under either short-term or long-term arrangements.
According to Pat Upton, author of Make Millions in the Licensing Business, licensing is "the practice of allowing a manufacturer (also called the licensee) to affix or associate the idea, character, design, or other representation owned by another (licensor) to his products." In the most basic terms, licensing is the legal act of granting rights to a certain property in exchange for payment. Although licensing is often referred to as an industry, many experts claim that it is actually a marketing tool or concept.
A licensing agreement is a legal contract between two parties, known as the licensor and the licensee. In a typical licensing agreement, the licensor grants the licensee the right to produce and sell goods, apply a brand name or trademark, or use patented technology owned by the licensor.
In general, life insurance is a type of coverage that pays benefits upon a person's death or disability. In exchange for relatively small premiums paid in the present, the policy holder receives the assurance that a larger amount of money will be available in the future to help his or her beneficiaries pay debts and funeral expenses.
The Limited Liability Company (LLC), a hybrid of the partnership and the corporation, has become a popular legal alternative for business owners. Now available in almost all states, the LLC combines the benefits of limited liability and pass through taxation, much like an S corporation.
Many factors can contribute to tough financial times for a small business, including a struggling economy, hostile takeover, natural disaster, or illegal activity such as theft or fraud. When a business encounters this type of financial turmoil, it may be forced to claim bankruptcy and liquidate some of its assets (including property, furniture, and computers) in order to regain some of its investment.
Loan proposals are formal, written documents that small businesses must prepare when they approach potential lenders or investors for funding. A complete loan proposal package should consist of completed loan application forms (if required), and a comprehensive business plan with complete financial statements.
A loan is the purchase of the present use of money with the promise to repay the amount in the future according to a pre-arranged schedule and at a specified rate of interest. Loan contracts formally spell out the terms and obligations between the lender and borrower.
In the modern office environment, each worker is equipped with a personal computer, containing its own disk drives and processor. Each of these computers can communicate with another by the way of a local area network (LAN), which is a computer network that covers a small area, usually a single building or group of buildings.
Loss leader pricing is an aggressive pricing strategy wherein a store sells certain goods below cost in order to attract customers who will, according to the loss leader philosophy, make up for the losses on highlighted products with additional purchases of profitable goods. Loss leader pricing is employed by retail businesses; a somewhat similar strategy sometimes employed by manufacturers is known as penetration pricing.
Mailing lists are compilations of the names and addresses of actual and potential buyers of a product or service. These lists are created by companies for their own marketing initiatives (e.g., lists of all past and present customers), or they are purchased or rented from list brokers—companies that specialize in making list compilations.
A mail-order business is one that receives and fulfills orders for merchandise through the mail. The terms "mail-order," "direct mail," and "direct marketing" are sometimes used as if they were synonymous, but in fact they have different meanings.