Chapter 6

The institution that actually provides the money for an SBA-backed loan is the ________.

bank To get an SBA-backed loan, you apply to a regular bank or credit union, which actually provides the money

At the federal level, small businesses can apply for loans backed by the ________.

Small Business Administration At the federal level, small businesses can apply for SBA-backed loans.

A corporation's first offering of shares to the public is called ________.

IPO A corporation's first offering of shares to the public is called initial public offering (IPO).

Preparing a business plan serves which of the following functions?

It helps persuade lenders and investors to finance the business. Preparing a business plan serves important functions. It helps persuade lenders and investors to finance your business if outside money is required

Which of the following statements is true about the Service Corps of Retired Executives (SCORE)?

It is a resource partner of the SBA. The Service Corps of Retired Executives (SCORE) is a resource partner of the SBA. These experienced business professionals offer free advice and one-to-one counseling to entrepreneurs.

________ are organizations, often not-for-profit, that lend smaller amounts of money to business owners who might not qualify for conventional bank loans.

Microlenders Microlenders are organizations, often not-for-profit, that lend smaller amounts of money to business owners who might not qualify for conventional bank loans.

Intrapreneurship is a term coined by business consultant Gifford Pinchot to designate entrepreneurial efforts within a larger organization.

True

Keri Sears uses the funding platform Kickstarter to solicit money to start a not-for-profit organization that promotes folk musicians and revives interest in the folk and traditional forms of music in America. She invites people to fund the business project and she states that donors will be honored on the organization's website. She sets a six month goal to raise the money. Keri is using which of the following forms of financing?

crowdfunding A combination of private and public financing is crowdfunding, in which an entrepreneur invites people to fund a share of a new business venture or a new product.

Investors who provide money to finance new businesses or turnarounds in exchange for a portion of ownership, with the objective of reselling the business at a profit are called ________.

venture capitalists Investors who provide money to finance new businesses or turnarounds in exchange for a portion of ownership, with the objective of reselling the business at a profit are called venture capitalists.

Which of the following is a quality that a successful entrepreneur is most likely to have?

views failure as a chance to grow While there is no single personality profile that fits all successful entrepreneurs, most entrepreneurs tend to learn from mistakes and view failure as a chance to grow.

________ are centers that provide a small business with a wide array of support resources and services during its early growth phase.

Business incubators Business incubators are centers that provide "newborn" businesses with various combinations of advice, financial support, access to industry insiders and connections, facilities, and other services a company needs to get started.

In the business plan, the exit strategy explains how and when the owner will close her business.

False

Which of the following is an advantage of buying into a franchise system?

It comes with an established business system. Buying a franchise combines many of the benefits of independent business ownership with the support that comes with being part of a larger organization. One of the key advantages of buying a franchise is that it comes with an established business system.

SCORE is a resource partner of the ________.

Small Business Administration Some of the best advice available to small businesses is delivered by thousands of volunteers from the Service Corps of Retired Executives (SCORE), a resource partner of the SBA

Three factors contributing to the increased number of small businesses are technologies such as e-commerce, growing diversity in entrepreneurship, and ________.

downsizing and outsourcing Three factors are contributing to the increase in the number of small businesses today: e-commerce, social media, and other technological advances; the growing diversity in entrepreneurship; and corporate downsizing and outsourcing.

Intrapreneurship refers to ________.

entrepreneurial efforts within a larger organization Intrapreneurship is a term coined by business consultant Gifford Pinchot to designate entrepreneurial efforts within a larger organization.

A business plan outlines that investors will be able to sell their investment through a public stock offering, or a buyback of the investors' interest. This is an example of which of the following elements of a business plan?

exit strategy An exit strategy explains how investors will be able to cash out or sell their investment, such as through a public stock offering, sale of the company, or a buyback of the investors' interest.

You have decided to open a pet store and signed an agreement with Dogz-N-Catz Centers Inc. You and the company have drawn up an agreement that allows you to use the Dogz-N-Catz name and its business format, to receive training, and to use its advertising materials. Under this agreement, Dogz-N-Catz Inc. is the ________.

franchisor A company that licenses elements of its business system to other companies is called a franchisor.

A small business is defined as a company that ________.

is independently owned and operated and not dominant in its field A small business is an independently owned and operated company that employees fewer than 500 people and is not dominant in its field of operation.

Barbara owns a small florist shop that employs a couple of part-time floral designers. She doesn't expect her business to grow much, but it provides her with a comfortable income and she enjoys what she does. Barbara's business would be described as a ________.

lifestyle business Lifestyle businesses are built around the personal and financial needs of an individual or a family.

TechPoint, a technical writing and business documentation firm, finds it difficult to handle its training requirements. The company forms a one-year contract with Impact Inc., a language training firm, to conduct training and refresher courses for their employees. This is an example of ________.

outsourcing Outsourcing refers to the practice of engaging outside firms to handle either individual projects or entire business functions.

Money used or needed to set up a new business is ________. 1/1 pts

seed money The first infusion of capital used to get a business started is called seed money.

Small companies tend to differ from large ones because ________.

they can react to market changes and make decisions more quickly than larger companies Small, entrepreneurial firms usually find it easier to operate "on the fly," making decisions quickly and reacting to changes in the marketplace.