Sam Smith is currently employed as a mechanical engineer and is paid $65,000 per year plus benefits that are equal to 30% of his salary. Sam wants to begin a consulting firm and decides to leave his current job. After his first year in business, Sam’s accountant informed him that he had made $45,000 with his consulting business. Sam also notices that he paid $6,000 for a health insurance policy, which was his total benefit during his first year. What was Sam’s opportunity cost?
A friend came into your office and said that his bank was out to kill small businesses. You asked him what he meant by this remark, and he said that he read an article that said his bank had just loaned $10 million to a major automobile manufacturer at a rate of 4 percent, which is less than prime. However, your friend just borrowed $50,000 from the same bank and they charged him prime plus three percent, or 7.5 percent. Your friend has been in business for two years, and last year he had a loss of $2,000. How can you explain this difference in interest rate to your friend?
Discuss why it is important for small businesses to develop a plan and how would you describe the role of a strategic plan and the role of a functional plan?
It is often said that a small business has unlimited liability because it is a sole proprietorship even if the owner incorporates. Explain why you agree or disagree with this statement. Be sure to provide support for your statements.
The final project for this course asks you to develop a business plan for a fictional product or company based on a real industry. With this in mind what components of a business plan do you believe should be included in the plan of the product or company you may decide on? Justify your selection of elements
Discuss the pros and cos of a partnerships and franchises for the small business.
Carol Jones wanted her business to increase sales by 50 percent over the next five years. To do this, she must hire three more people. She wanted to determine how to evaluate these people, so she lists their job specifications and develops job descriptions. She also listed where these employees would work and what training they would require. What management functions is Carol performing, and how do they apply to this scenario?