Ch. 6

Online businesses avoid the risk of failure faced by traditional start-up businesses. T or F?

False

Small businesses create about __________ percent of the new jobs in the United States.

65

Most entrepreneurs prefer working for someone else. T or F?

False

Successful entrepreneurs are exclusively motivated by the desire to become rich. T or F?

False

Entrepreneurship involves accepting the risk of starting and running a business. T or F?

True

If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques. T or F?

True

Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are. T or F?

True

The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments. T or F?

True

A review of small business successes and failures indicates that the

businesses with the potential for high profit levels tend to be difficult to start and hard to keep going.

Entrepreneurs seeking financial support from bankers and potential investors should

create a detailed business plan to help the bankers and investors understand why this business will succeed.

One of the hurdles small businesses face when deciding to export is

financing is often difficult to find.

After personal savings, the most common source of capital for entrepreneurs is from

friends and family.

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their

integrity and sound business idea.

A __________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

market

Business incubators are usually government-funded facilities intended to

offer start-up firms low-cost office space and basic business services.

Two key management functions that need particular attention when starting a business are

planning and financing.

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called

the Service Corps of Retired Executives (SCORE).

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on

the value of what the business owns, what it earns, and what makes it unique.