A small business is one that is dominant in its field.
According to a recent survey, 44 percent of new businesses survive for at least seven years.
The small-business share of new jobs is greatest in professional services.
People under 25 and over 40 are less likely to start their own business.
A business plan is described as a control tool.
Often, owners of small businesses start their own companies because they have no "entrepreneurial spirit".
A disadvantage of operating a small business is its limited ability to obtain capital.
The SBA provides small-business owners with free counseling, courses, conferences, workshops, and a wide range of publications.
Small-business development centers (SBDC) is a university-based group that provides individual counseling and practical training primarily for members of racial and ethnic minorities.
Venture capital is invested in small firms that have the potential to become very successful.
Small businesses drive the U.S. economy. They represent _____ percent of all employer firms in the United States.
Statistically, seven out of ten new businesses fail within their first five years. These failures are the result of:
a. a lack of capital and machinery
b. mismanagement resulting from a lack of business know-how
c. disagreements among the partners
d. employee theft and embezzlement
e. regulatory difficulties
What is the major source of capital for entrepreneurs?
c. friends or relatives
d. personal resources
e. lending institutions
The Service Corps of Retired Executives (SCORE):
a. provides service for a small fee
b. is a group of retired executives who volunteer services to small businesses through the SBA.
c. is a group of active managers who cousel small-business owners on a fee basis
d. is a group of active managers who counsel small-business owners on a volunteer basis
e. is a group of retired executives from Sears, Roebuck and Co.
Why have women and minority entrepreneurs received special attention from the Small Business Administration (SBA)?
a. Women and minorities have a greater knack for business.
b. Twenty-two percent of the loans made to women and minority business owners are past due.
c. Raising money is nagging problem for women and minority business owners.
d. Businesses owned by women and minorities will provide over 50 percent of the jobs in this country.
e. About two out of three firms owned by women and minorities go out of business within four years of their founding.
A business plan is a carefully constructed guide that should serve as:
a. a road map to making profits
b. a technical plan
c. a financial tool
d. a worksheet
e. communication, management, and planning tools
Why are fewer small businesses in production industries, compared with distribution industries or service industries?
a. The typical entrepreneur has more skills in retailing and consumer services than in manufacturing.
b. Entrepreneurs consider manufacturing industries to be in decline and thus look elsewhere for opportunities.
c. Production industries usually require large initial investments in machinery and equipment.
d. The SBA is more willing to assist firms in service or distribution industries.
e. Manufacturers are up against more competition.
Which of the following is NOT an advangtage of a small business?
a. Close personal relationships between managers and employees
b. Potential for employee advancement is limited
c. Ability to adapt to change
d. Owners can set their own work hours
e. A checkbook and a cash-receipts journal make up the records system
Small-business investment companies (SBICs) are:
a. privately owned firms that provide venture capital to small entrepreneurs
b. not intended to be profit-making organization
c. owned by governmental agencies, such as the SBA
d. a source of capital for promising businesses of any size
e. organized to offer financial advice to small enterprises
Which is NOT an advantage of the franchisor in franchising?
a. Franchisor has more capital to use for advertising
b. A franchisor benefits from the motivation of the franchisee
c. Outlets are maintained according to standards
d. The franchise can start a business with limited capital
e. Distribution of products can expand at a faster rate
An advantage of franchising is that the franchisor retains a great deal of control.
Contract disputes are the cause of many lawsuits involving franchising.
The franchisor pays the franchisee a royalty on gross revenue.
During the last decade, the number of small businesses in the United States hs increased 49 percent.
More than 70 percent of Americans would prefer being an entrepreneur to working for someone else.
Service industries account for 25 percent of all small businesses.
Family background is a key personal factor that can determine small business success.
In 2008, at least 50 percent of all small businesses were owned by women.
A disadvantage of a small business is the:
a. heavy risk of going out of business
b. management skills of the owner
c. ability to raise capital
d. amount of financial resources available to the owners
e. all of these are disadvantages
Which question is NOT answered in a business plan?
a. What exactly is the nature and mission of the new venture?
b. How much will the new venture cost?
c. Why is the new enterprise a good idea?
d. How will the business be resolved?
e. What are the businesses personal goals?
The Small Business Training Network (SBTN) is:
a. a group of retired business people who volunteer their services
b. a university-based group that provides practical training to owners
c. a group that provides venture capital for training
d. an online training network consisting of eighty-three SBA-run courses, workshops, and resources.
e. a group of senior and graduate students who provide counseling
Studies show that the incidence of innovation among small-business workers is ______ than among workers in large businesses.
a. slightly lower
b. extremely lower
c. five times more
d. marginally higher
e. significantly higher
About what percentage of all small businesses are involved in distribution industries?
a. 48 percent
b. 19 percent
c. 8 percent
d. 60 percent
e. 33 percent
Small businesses can challenge larger, established businesses by:
a. cutting their own prices
b. offering free services, such as warranties
c. becoming more responsive to consumer needs
d. aggressive advertising and promotion
e. asking the government to protect small business with subsidies and other forms of assistance.
The Small Business Administration (SBA):
a. was created by the Better Business Bureau
b. has one office in each of the fifty states
c. provides loans to all small businesses
d. was created by congress in 1953
e. was bolished during the Reagan administration
Which statement is NOT true about small businesses?
a. over one-half of small businesses are home-based
b. about 60 percent of home-based businesses are in the service industries
c. The average age of small business entrepreneurs is between 44 and 64 years old
d. High-tech teen entrepreneurship is exploding
e. 91 percent of all small business have no employees
Research shows that the typical entrepreneur:
a. is over the age of 45
b. did not grow up in a family-owned business
c. would actually prefer to work for someone else, if the right job came along
d. is highly-motivated and possesses the "entrepreneurial spirit"
e. is an outstanding manager
Franchising arrangements include all EXCEPT which of the following?
a. GM authorizes a dealership to sell Cadillacs to customers
b. Coco-Cola gives a distributor the right to sell its product to retailers
c. Holiday Inn pays its franchisees a royalty
d. McDonald's supplies techniques and training to its franchise restaurant owners
e. Dairy Queen controls the marketing strategies of its franchised outlets
One attractive (and highly successful) means of starting and operating a small business is to:
a. start a proprietorship
b. form a partnership with other owners
c. buy out someone else's business
d. form and S-corporation
e. buy a franchise
As a franchisor, you gain all EXCEPT which of the following?
a. Guidance and advice
b. Selective distribution of products without high operating costs
c. More capital available for production and promotion
d. Outlets maintained according to your own standards
e. Highly motivated franchisees, who are likely to produce more sales
A carefully constructed guide for the person starting a business
A license to operate an individually owned business as though it were part of a chain of outlets or stores
A person or organization purchasing a franchise
The actual granting of a franchise
An individual or organization granting a franchise
A group of retired businesspeople who volunteer their services to small businesses through the SBA
Service Corps of Retired Executives (SCORE)
One that is independently owned and operated for profit and is not dominant in its field
A governmental agency that assists, counsels, and protects the interests of small businesses in the United States
Small Business Administration (SBA)
University-based groups that provide individual counseling and practical training to owners of small businesses
Small-business development centers (SBDCs)
Groups of senior and graduate students in business administration who provide management counseling to small businesses
Small-business institutes (SBIs)
Privately owned firms that provide venture capital to small enterprises that meet their investment standards
Small-business investment companies (SBICs)
Money that is invested in small (and sometimes struggling) firms that have the potential to become very successful