FSE2202 FUNERAL HOME MANAGEMENT – Flashcards
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Business Plan (New Venture Plan)
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A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business.
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Consumerism
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The emphasis placed on providing to customers products and services that are safe, reliable, and honestly advertised; also, a social movement that seeks to strengthen the rights of consumers relative to sellers.
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Copyright
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The registered right of a creator to reproduce, publish, and sell the work which is the product of the intelligence and skill of that person.
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Advisory Board
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The business governance board which helps make major decisions for the funeral home, but does not deal with the daily operations.
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Angels AKA Business Angels
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Private investors who are willing to supply financing for new and/or risky small venture start-ups.
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Articles of Partnership
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A written document that states explicitly the rights and duties of partners in a partnership.
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Artisan Entrepreneur
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A person who starts a business with primarily technical skills and little business knowledge.
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Board Of Directors
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The governing body that is elected by the stockholders of a corporation.
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Book Value
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The cost of a fixed asset less accumulated depreciation.
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Limited Partner
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Can only lose the amount of money they invested in a partnership.
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Business
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An organization that combines inputs of raw materials, capital, labor, and management skills to produce useful outputs of goods and services so as to earn a profit.
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Capital
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The amount by which the total assets exceed the total liabilities of a business; an owner's financial interest in a business.
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Conflicted familial pattern
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The family pattern in which the family members work against one another instead of together.
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Corporate Refugees
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Those individuals who flee the bureaucratic environment of big business by going into business for themselves.
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Corporation
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An artificial being, invisible, intangible, and existing only in contemplation of law; an entity that is something that has a distinct existence separate and apart from the existence of its individual members.
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Corporation Charter
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The written application for permission to incorporate that is approved by a state official.
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Debt Equity (Debt Capital, Borrowed Capital)
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Any borrowed or loaned capital invested in the business that must be repaid to creditors.
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Entrepreneur
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One who organizes, manages, and assumes the risk of a business firm or venture.
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Equity capital (Personal capital)
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Capital that is invested in the business by the owner(s).
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Founder
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An entrepreneur who brings a new firm into existence.
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Franchisee
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An entrepreneur whose power is limited by a contractual relationship with a franchising organization.
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General Manager
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An entrepreneur who functions as an administrator of a business.
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General Partner
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A partner in a limited partnership who has unlimited personal liability. A partner of a partnership who is personally liable for the debts of the business
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Goodwill
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An intangible asset such as the name of a funeral home; also, an intangible asset which enables a business to earn a profit in excess of the normal rate of profit earned by other businesses of the same kind.
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Intangible Asset
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Those assests that cannot be touched or grasped (examples include patents, copyrights and goodwill).
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Laissez-fare
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The business pattern in which the family members do not interfere with each others departments or responsibilities.
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Legal Entity
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A business organization that is recognized by the law as having a separate legal existence.
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Limited Liability Company
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New form of business ownership (approved in most states since approximately 1994); combines aspects of partnerships with the limited liability of a corporation; owners known as members.
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Merchandising business
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A business that purchases finished goods for resale.
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New venture plan (Business Plan)
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A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business.
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Opportunistic Entrepreneur
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A person who starts a business with both sophisticated managerial skills and technical knowledge.
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Overseer Board
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The business governance board which makes most decisions for a family funeral home, including the decisions made during the daily operation.
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Paper Board of Directors
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The business governance board which exists only on paper and never holds true meetings.
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Participative (business pattern)
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The business pattern in which all family members participate in the operations, decisions or profits of the funeral home
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Partnership
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The voluntary association of two or more people who have combined their resources to carry on as co-owners of a lawful enterprise for their joint profit.
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Patent
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The registered right of an inventor to make, use, and sell an invention.
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Paternalistic
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The business pattern in which the parent is in control.
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Patriarchal
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The family pattern in which the father is in charge.
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Personal Capital (Equity Capital)
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Capital that is invested in the business by the owner(s).
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Professional Business Pattern
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The business pattern in which the family funeral home is completed oriented toward the business and not family.
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Proprietorship (Sole)
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A business owned by one person who is subject to claims of creditors.
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Rubber-Stamp Board of Directors
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The business governance board which exists and holds meetings, but only approves actions desired or completed by the manager of the funeral home.
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Service Business
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A business that provides a service as opposed to a product.
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Small Business
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A business which is independently owned and operated and is not dominant in its field of operations.
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Small Business Administration (SBA)
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The principal government agency concerned with the financing, operation, and management of small businesses.
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Sole Proprietorship
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A legal form of organization whereby the business is owned and operated by one person
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Stock or Stock Certificate
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A document specifying the number of shares owned by a stockholder.
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Trademark
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An intangible asset that is a distinct name, sign, or symbol that the federal government grants exclusive rights to use for a specified period of time.
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Venture Capitalist
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An investor or investment group that commits money to new business ventures.
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Corporate Charter:
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Written application for permission to incorporate that is approved by a state official.
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Earnings Approach:
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A business valuation approach, which centers on estimating the amount of potential income that may be produced by the business in the next year. Income-based small business valuation. Establishes the business value by dividing the expected financial benefit (exp seller's cash flow).
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Factoring:.
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Obtaining cash before payments are received from customers by selling off one's accounts receivables to a third party
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Total Quality Management:
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The efforts of all members of an organization directed to ensure that quality in the production of goods and services is achieved
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Replacement value:
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Fair market price to purchase similar assets.
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Liquidation value:
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The anticipated value of an asset that would be realized in case of liquidation of the business.
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Book value:
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Cost of a fixed asset less accumulated depreciation.
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Circulating capital aka Working Capital:
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The current asset items consisting of cash, inventories, and accounts receivable. Difference between current assets and current liabilities.
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Fixed Capital:
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Long-term capital that is invested in the small business such as land, building and machinery
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Primary objective of a funeral home:
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Fulfilling the needs of the client-families and the community.
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Secondary objective of a funeral home:
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Insuring funds are available for meeting expenses, reasonable return on investment and capital improvements.
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Occupation Safety and Health Act:
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Federal legislation that mandates that employers provide a workplace that is free from hazards likely to cause death or serious physical harm.
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Trade Credit
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A form of credit that is extended by one business to another business to help finance distribution of producer's goods.
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Characteristics of entrepreneurs:
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-Willing to take risks -Need for Achievement -Self-Confidence -Forward-looking approach -Open-mindedness -Need for Achievement -Willingness to take risks
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Family BUSINESS patterns:
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-Paternalistic -Laissez-faire -Participative -Professional
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Family Patterns:
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-Patriarchal -Matriarchal -Collaborative -Conflicted
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Governance Pattern:
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-Paper Board -Rubber-stamp Board -Advisory Board
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Seven Stages of Business Succession
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Pre-Business Introductory Introductory Functional Functional Advanced Functional Early Succession Mature Succession
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Characteristics of a small business:
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-Highly personalized /Customer focus -Integrity and Responsibility -Innovation
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Contributions of small businesses
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Simulates economic competition -Represent 99.7 % of all employer firms -Generate jobs
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External cause of business failure
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-HR planning -Capital Shortages -Taxes -Governmental regulations -Consumerism -Disaster of tragedy -Business Risks
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Internal cause of business failure:
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Lack of expertise -Financial shortages -HR Management
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Parts of a Business Plan:
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1) Cover Page 2) Executive Summary 3) General Company Description 4) Products and Services Plan 5) Marketing Plan 6) Management Plan 7) Operating Plan 8) Financial Plan 9) Appendix
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Pre-Business Stage
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a potential successor becomes acquainted with the business part of growing up. The young child may accompany the parent to the office, may learn some of the terminology of the business or some faucets of the business. Orientation of the business if very informal.
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Introductory Stage
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includes experiences that occur before the successor is old enough to begin part-time work. In this stage, deliberate actions are taken to introduce the child to the business and employees in the business.
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Introductory Functional Stage
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the son or daughter begins to function as a part-time employee. This may be after school, on weekends or during school breaks. The offspring learns who the key persons are in the business and the role each plays. This stage may include formal education and work for other firms, such as an internship
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Functional Stage
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begins when the potential successor enters full-time employment, usually follows his/her education. This stage includes non-managerial roles in the company
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Advanced Functional Stage
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as the potential successor assumes managerial roles, he/she enters the advanced functional stage. This may include directing other employees, but not managing the entire company.
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Early Succession Stage
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the son/daughter is named president or general manager. He/she becomes the manager de jure of the company. That is the manager in name though maybe not in fact. The parent or founder may still be controlling much of the company, but not in a day-to-day managerial role.
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Mature Succession Stage
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reached when the transition from parent to offspring is complete and the offspring is fully and solely in charge of the business. In this stage, the parent will not usurp the authority of the offspring, and all decisions are made by the offspring.
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Drawbacks of Entrepreneurship
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Long hours of hard work Emotional energy Risk of business failure
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Sole Proprietorship Advantages
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Ease of Starting Low cost of organization - Freedom to manage Profits - All profits go to the single owner Promptness of action Secrecy Customer Recognition Unique credit standing (The company can use personal assets for business purposes)
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Sole Proprietorship Disadvantages
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Unlimited financial risk Limited size Limited life - Limited management ability Limited opportunities for employees - Difficulty in raising capital
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Partnership Advantages
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Combined management, talent, and capital of the two (or more) partners Easy to form (as long as the partners agree to the division of labor) Efficiency of labor Possibility of employees to buy into the business Possibility of raising more capital than proprietorship Each partner contributes good will in the business
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Partnership Disadvantages
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Lack of continuity Decisions are binding on both parties Frozen investments Unlimited liability of general partners Possibility of unsatisfactory division of profits Possibility of managerial difficulties
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Corporation Advantages
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Continuity in existence Ease of ownership Limited liability Large financial capability Specialized management (Large companies can hire people to handle specific areas of management.) Legal entity
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Corporation Disadvantages
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Legal restrictions on activities Separation of ownership and control Lack of personal interest Double taxation of earnings Lack of privacy Difficult to create
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Cover page
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Contains the name of the venture and the owners, date prepared, and contact person
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Executive Summary
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1-3 page overview of the total business plan This should be written after the other sections are completed. It highlights the significant points and, ideally, creates enough excitement to motivate the reader to continue
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General Company Description
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This section explains the type of company and gives the history if it already exists This section will include information regarding whether the business is a manufacturing, retail, service or other type of business. It should also include a proposed form of organization, such as a sole proprietorship, partnership or corporation. It would be organized as follows: Name of Business Location of Business Nature and primary product or service of the business Current status (startup, buyout or expansion) and history Legal form of Organization (proprietorship, partnership or corporation)
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Products and/or Services Plan
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This section describes the product and/or service and points out any unique features. This should include why people will purchase your product or service. It should be organized as follows: Description of products and/or services Features of product /service providing competitive advantage Legal protection - patents, copyrights, trademarks
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Marketing Plan
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This section shows who the customers will be and the type of competition the business will face. It should outline a strategy and specifies what will give the firm a competitive edge. It should be organized as follows: Analysis of target market and profile of target customer Methods to identify and attract customers Selling approach - type of sales force and distribution channels Types of sales promotion and advertising It may include credit and pricing policies
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Management Plan
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it should identify key persons, such as active investors, the management team and directors for the business. As it lists the persons, it should cite the experience and competence that each possess. It should be organized as follows: Description of management team Outside investors and/or directors with qualifications Outside resources Plans for recruiting and training employees
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Operating Plan
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This section explains the type of manufacturing or operating system to be used, as well as describes the facilities, labor, raw materials, and processing requirements. It should be organized as follows: Operating and Manufacturing methods Description of operating facilities (location, space and equipment) Quality-control methods Procedures to control inventory and operations Sources of supply and purchasing procedures
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Financial Plan
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This section specifies the financial needs and comtemplated sources of financing. This must also include the projections of revenues, costs and profits, usually for 2 years. It should be organized as follows: Historical financial statements for last 3 to 5 years (including income statements, balance sheets, and cash flow statements) Planned sources of financing
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Appendix
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This provides supplementary materials to the plan and should be organized as follows: Management Team Biographies Ethics code Other Items not included in other parts of the business plan
