CHECKPOINT 2

What are the main types of business structures?

• Franchise, cooperative, joint venture, nonprofit

• Sole proprietorship, partnership, corporation, limited liability company (LLC)

• Sole trader, limited partnership, public company, private equity

• Business unit, subsidiary, holding company, agency

How does a sole proprietorship differ from a corporation?

• A sole proprietorship has limited liability, while a corporation has personal liability.

• A sole proprietorship is owned by one person with personal liability, while a corporation is a separate legal entity with limited liability for its owners.

• A sole proprietorship can have multiple owners, while a corporation can only have one owner.

• A sole proprietorship is a type of corporation with tax benefits.

What impact does business structure have on liability?

• Liability is only determined by the size of the business.

• Business structure has no effect on liability.

• All business structures provide the same level of liability protection.

• Business structure affects liability by determining the level of personal liability owners face; sole proprietorships and partnerships have unlimited liability, while corporations and LLCs offer limited liability protection.

What are some common challenges businesses face during growth?

• Common challenges include scaling operations, managing cash flow, maintaining quality, hiring talent, and adapting to market changes.

• Increasing market share without investment

• Focusing solely on product development

• Eliminating all competition immediately

How can a business benefit from expanding its operations?

• A business can benefit from expanding its operations by increasing market reach and profitability.

• Limiting product offerings to a niche market

• Reducing operational costs by downsizing

• Focusing solely on local customers to enhance service quality

What role does market demand play in business growth?

• Market demand has no impact on business growth.

• Market demand only affects marketing strategies.

• Market demand is irrelevant to production decisions.

• Market demand drives business growth by influencing sales, production, and strategic decisions.

What are realistic aims for a small business?

• Establishing a solid customer base, achieving profitability, maintaining cash flow, enhancing brand recognition, and fostering customer loyalty.

• Ignoring customer feedback

• Focusing solely on product development

• Maximizing debt accumulation

How can a business set measurable objectives?

• Use subjective measures to evaluate success.

• Set vague goals without specific criteria.

• Focus solely on long-term objectives without deadlines.

• Use the SMART criteria to define clear, measurable, achievable, relevant, and time-bound objectives.

Why is it important for businesses to have clear goals?

• Clear goals are essential for providing direction, focus, and motivation within a business.

• Having no goals allows for more flexibility in decision-making.

• Clear goals are only necessary for large corporations.

• Goals can limit creativity and innovation in a business.

What factors should be considered when developing business aims?

• Office decor and aesthetics

• Social media presence

• Employee satisfaction surveys

• Market trends, target audience, competition, resources, financial constraints, regulatory environment, long-term vision.