What are Not-for-Profit Organizations? A not-for-profit organization is an organization that focuses on a particular social cause, and all the money earned or donated is used in pursuing its objectives and meeting operational costs. Unlike for-profit corporations, not-for-profit organizations do not distribute their surplus revenues to their owners. Instead, they use the funds to pursue…
What is Streamlining? Streamlining refers to the improvement of the efficiency of a certain process within an organization. It can be done by automation, simplification of tasks, or elimination of unnecessary steps using modern techniques and technology. Streamlining means optimization. Companies strive for more efficient and automated operations to minimize costs and maximize profits. Streamlining…
What are Company Recovery Strategies? Company recovery strategies are the strategies undertaken to preserve a company and prevent its shutdown. The key objective of company recovery strategies is to quickly identify and address the sources of its problems that may lead to its collapse. The main task involved in company recovery strategies is to diagnose…
What is Bootstrapping? Bootstrapping is the process of building a business from scratch without attracting investment or with minimal external capital. It is a way to finance small businesses by purchasing and using resources at the owner’s expense, without sharing equity or borrowing huge sums of money from banks. A business that uses bootstrapping is…
What are Stock Buyback Methods? Stock buyback methods involve reducing the number of shares outstanding and raising the price for the remaining shares. Similar to dividend payments, stock buybacks can be used to distribute invested capital back to the shareholders. What is a Stock Buyback? A stock buyback (also known as a share repurchase) is…
What is the Serviceable Obtainable Market (SOM)? The Serviceable Obtainable Market (SOM) is an estimate of the portion of revenue within a specific product segment that a company is able to capture. Another way of looking at it is as an estimate of the market share for a particular product that a company can garner….
What is a Variable Interest Entity (VIE)? A variable interest entity (VIE) may be any type of legal business structure. It can be, for instance, a trust, a partnership, a corporation, or joint venture. It is created such that even if an investor does not hold a majority of the voting rights, they are able…
What is a Franchise? A franchise refers to a contractual arrangement whereby one party (the franchisor) allows another party (the franchisee) to use its trademarks (or tradenames) and other intellectual property, as well as certain business processes and systems. Franchising can include the manufacturing and marketing of a good or service according to the already…
What is Business Structure? Business structure refers to the legal structure of an organization that is recognized in a given jurisdiction. An organization’s legal structure is a key determinant of the activities that it can undertake, such as raising capital, responsibility for obligations of the business, as well as the amount of taxes that the…
What is a Master Limited Partnership? A master limited partnership is a publicly-traded business venture that combines the features of a corporation with that of a partnership and exists as a publicly-traded limited partnership. Such business ventures are exempt from corporate tax. A master limited partnership pools the tax benefits of a private partnership and…
