BUS 150 Chapter Notes - Chapter 6: Cash Flow, E-Commerce, Initial Public Offering
5 May 2016
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A: starting your own, b/c you take everything you have (all your own money & time) and put it on the table. Small business: independently owned and operated; gov"t loves b/c it"s the biggest provider of jobs. Factors contributing to the increase in number of small businesses: Franchise: buy a territory & pay them $ upfront, must pay 2% of revenues (royalty, every year for its entire lifetime) (ex: mcdonald"s is a franchise. ) Nothing can be changed about this. (ex: mcdonald"s only sells coca-cola, it"ll never change that. ) *franchises are less risky than a business, b/c the rate of failure is a lot less but you do sacrifice creativity. *must have a business plan, otherwise no one will want to talk to you. Marketing strategy (how to reach the target). Financial projections (income statements, [revenue, expenses] cash flow for. 2-3 yrs, history, inflation, demographics, net profit, make predictions. Can be started w/ very little cash.
