ITB: ch 6 learnsmart & quiz

Which of the following is true regarding businesses with low failure rates, such as veterinary services, dental practices, and medical practices?

- They do not tend to produce much growth - They often require advanced training to start

Which of the following regarding high-growth businesses (ex. technology firms) are true?

- difficult to start - difficult to keep going

characteristics of an entrepreneurial team that will be developing and marketing a new product

- each from different ares of business - group of experienced people - members have complementary skills and are creative

There are many good reasons for going global. Which of the following are examples of such reason?

- exporting can extend product life - exporting can absorb excess inventory

entrepreneurs desire to...... while micropreneurs desire to....

- grow the business and generate wealth - remain small and balance lifestyle with work

Which of the following employment statistics about small businesses is true?

A great majority of American workers find their first jobs with a small business.

__________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies.

Angel investors

Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture?

Gain experience by working for a successful businessperson.

Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?

It's about independence and the opportunity to share in the American dream.

Small business owners often struggle in attracting qualified workers. Which of the following contributes to this problem?

Many jobs in small firms have low pay and few benefits.

One reason we have seen continued growth in home-based businesses is

One reason we have seen continued growth in home-based businesses is

Which of the following explains why individuals accept the risks of business ownership?

The sense of self-satisfaction and independence

Which of the following statements is characteristic of entrepreneurs?

They look at problems and see opportunities.

Ahmed is the owner of a small U.S. shoe manufacturing business. He knows he could export some of his shoes, but he does not know if they fit other markets. Also, he cannot afford to hire an international trade expert. What does this situation demonstrate?

Why many small businesses have difficulty engaging in global business

Venture capitalists try to safeguard their investment by taking some control over the business. What could happen if a venture capitalist takes too large a stake in your company?

You could lose control of the business.

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are...

a market

Small businesses must seek advice from outside experts. In order to put together official documents such as leases, contracts, and partnership agreements, it is important to seek the advice of __________.

an attorney

A(n) _________ can benefit both the trainee and the business owner by hiring the trainee to learn small-business management while assisting the owner in getting daily work done.

apprenticeship

working in a successful business is a good way to learn operations and could...

be a step in buying out the owner

Similar to how large businesses proceed, small businesses make marketing decisions __________.

before a product is developed or store is opened.

Successful entrepreneurs are self-nurturing. This means they

believe in themselves and their ideas.

Which section of the comprehensive business plan indicates the amount of capital needed to commence or continue operations, and describes how these funds are to be used?

capital required

The _____________ _____________ section of a business plan describes company operations to date (if any), potential legal considerations, and areas of risk and opportunity. This portion also summarizes the firms' financial condition, and includes past and current balance sheets, income and cash flow statements.

company background

Which part of the business plan summarizes the most attractive points of your project in as few words as possible?

cover letter

How did the 1990 Immigration Act encourage entrepreneurs to relocate to the United States?

creating a category of investor visas

Effective entrepreneurial teams combine

creativity with marketing and production experience.

___________ zones are specific geographic areas to which governments attract private business investment by offering lower taxes and other government support

enterprise

A comprehensive business will include cover letter, __________ ___________, company background, management team, financial plan, capital required, marketing plan, location analysis, manufacturing plan, and an appendix.

executive summary

The ____________ ____________ is a part of the business plan that consists of two or three-page management summary of the proposed venture, including a short description of the business, and discuss major goals and objectives

executive summary

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will

expect an ownership stake in the company in exchange for financial backing.

Employees of small businesses often have greater job satisfaction than do employees of larger firms. One reason for this difference in job satisfaction is that employees of small businesses often

get more respect from their bosses.

A new business that sets up a(n) __________ from the start is saving itself time and grief later.

good accounting system

If you want to be both independent *and* rich, you need to pursue a business with high

growth

Business _________ are centers that offer businesses in the critical early development low-cost offices and access to basic services such as accounting, legal advice, and secretarial help.

incubators

The executive summary section of the business plan contains

information that will capture the attention of bankers and other investors who receive many business plans every day.

The _____________ ____________ section of a business plan includes and organization chart, job descriptions of listed positions, and detailed resumes of the current and proposed executives.

management team

The section of a business plan that describes minimum plant size, machinery required, production capacity, inventory and inventory-control methods, quality control, and plant personnel requirements is called the:

manufacturing plan

The most important things investors want to know are what makes the product more desirable than what's already available and whether or not the product can be patented. In which section of the business plan should investors look to find this information?

marketing plan

According to SBA guidelines, a manufacturing firm with 1,000 employees

may be classified as a small business depending upon the size of others in the same industry.

Two advantages small firms have over large firms include more personal customer service and the ability to respond quickly to

opportunities

A Small Business Investment Company (SBIC) is a(n)

private investment company that is licensed by the SBA to make loans to small businesses.

Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm's resources is

seek and pay for expert guidance and assistance.

Small businesses deal with...

similar management issues that large companies face.

Using the analogy of boulders vs. sand for filling a hole, the textbook points out that

small businesses can serve niche markets that larger firms do not serve well.

Due to the credit crunch that developed during the Great Recession, many small businesses found that __________ were more willing to lend money to smaller operations.

smaller community banks

Increased participation in small business exporting owes credit to __________.

technological advances such as the Internet and PayPal for safely fulfilling orders.

Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider starting a business in

the manufacturing sector

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.

Intrapreneurs make use of __________ to develop and launch new products and generate new profits.

their employer's existing human, financial, and physical resources

__________ ___________ are individuals or companies that invest in new businesses in exchange for partial ownership in those businesses

venture capitalists

Community Development Financial Institutions (CDFI) have been successful because they:

- offer counseling on marketing strategies - offer counseling on improving cash flow - maintained financial discipline other lenders lack

A Self-Employment Assistance Program (SEA) offered by some states are designed to:

- pay unemployment benefits while building a business - provide training and counseling to the business owner

Primary concerns when starting a business are ___________ and ____________

- planning - financing

Micropreneurs are willing to accept the risk of starting and managing a business that:

- remains small - offers them a balanced lifestyle - lets them do the kind of work they want to do

select the characteristics of an intrapreneur

- someone who uses company resources to launch new products -a creative person who works within a corporation

Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:

- starting with enough money - to hire a good lawyer and accountant - that finding and retaining good workers is hard

some common causes of small business failure include

- starting with too little capital - under-pricing and overpricing goods and services - no experience in that business or industry

A business plan is a detailed written statement that describes:

- the resources and qualifications of its owner(s) - the target market