MIE 201 Chapter 5

Which of the following are forms of debt financing for Jena in starting a new online training program business for counselors? - A bank loan in the amount of $10,000 - Thirty-five new laptops given in exchange for a 2% share of the business - Personal savings of $20,000 - a $15,000 SBA load

- A bank loan in the amount of $10,000 - 35 new laptops given in exchange for a 2% share of the business - a $15,000 SBA loan

A business plan outlines which two of the following? - A step-by-step explanation of how the business will achieve its goal - A step-by-step description of how the business' product will be produced - A precise statement of the rationale for the business - A detailed description of how the business will be dissolved, should it fail

- A step-by-step explanation of how the business will achieve its goals - A precise statement of the rationale for the business

Which of the following are typical businesses found in the service sector? - Accounting firms - barbershops - Drugstores - Real-estate agencies - Independent music stores

- Accounting firms - barbershops - Real-estate agencies

A well written business plan will include which of these items? - A loosely phrased rationale for the business - An explanation of the business - An estimate of income and expenses - A definition of the level of flexibility within the business - An analysis of the competition

- An explanation of the business - An estimate of income and expenses - An analysis of the competition

Which three are advantages of franchising? - Centralized buying power - Profit-sharing - Greater chance for success - Restrictions on purchasing - Brand-name appeal

- Centralized buying power - Greater chance for success - Brand-name appeal

Women own more than 9 million businesses in the US. They have great success in a few focused ares which include which of the following? - Education - Communication - Professional services - Retail - Manufacturing - Administrative services

- Communication - Professional services - Retail - Administrative services

What are the two types of nonstore retailing? - Independent promotions - Direct selling - Wholesaling - Direct marketing

- Direct selling - Direct marketing

Which terms emphasize a reduction in management layers, corporate staff and work tasks in order to make a firm more flexible and resourceful? - Intrapreneurship - Downsize - Right-size - Entrepreneurship

- Downsize - Right-size

Which of the follow are common, primary reasons that small businesses fail? - Conducting market research - Managerial inexperience - Undercapitalization - Inability to cope with growth - Having a competitive niche

- Managerial inexperience - Undercapitalization - Inability to cope with growth

Which two statements are TRUE regarding the role of small business in the U.S. economy? - More than 99 % of U.S. firms are classified as small businesses - Small firms represent approximately 25 % of exported goods from the US - Small businesses employ nearly half of all private workers - Approximately 50 % of all U.S. firms are small businesses.

- More than 99 % of U.S. firms are classified as small businesses - Small businesses employ nearly half of all private workers

With the growing number of immigrants living in the US, retailers will find a large amount of business potential in this market is they _______. - Promote only "American" products - Reduce diversity in their firms - Offer bi- or multilingual employees - Carry ethnic products

- Offer bi- or multilingual employees - Carry ethnic products

Which of the following are volunteer agencies funded by the SBA to provide advice for owners of small firms. - BBB - SCORE - ACE - FDIC

- SCORE - ACE

Which of the following are true about innovation and small business? - Small firms produce more than half of all innovations - Many of the US' largest businesses started as small firms that used innovation as a path to success - Small firms do not have the capacity or manpower to generate innovative ideas - Franchises make up about 2 % of small businesses - Most innovation occurs at government-operated businesses.

- Small firms produce more than half of all innovations - Many of the US' largest businesses started as small firms that used innovation as a path to success - Franchises make up about 2 % of small businesses

Which of the following are considered equity financing? - The savings account of the owner - A SBA loan - The accumulated value of a life-insurance policy - Financial support from a bank in the form of a loan - A personal laptop

- The savings account of the owner - The accumulated value of the a life-insurance policy - A personal laptop

Which of the following functions are most typical of a wholesaler? - manufacturing - planning and negotiation for supplies - promoting - selling to end consumers - distributing

- planning and negotiating for supplies - promoting - distributing

Small firms are important as exporters representing _______ of the value of exported goods.

33 %

The baby boomer generation is very important to small business due to its large size of approximately _______ Americans

75 million

Small firms can develop _______ if it provides quality products and excellent service.

A good reputation

A microentrepreneur is _______.

An entrepreneur with five or fewer employees

Pete is a contractor and Chico is a landscaper. Pete offers to build a storage shed for Chico's equipment if Chico will take care of Pete's lawn for the season. This is an example of _______.

Bartering

For a small business entrepreneur, independence refers to _______.

Being your own boss

Angela saved $20,000 and acquired another $20,000 as a short-term load from her parents to start a kid-friendly coffee shop. The $40,000 that Angela is ready to invest in this new venture is known as _______.

Capital

Rocco owns a small condo in downtown Portland, Oregon, the same city where he is opening a small coffee shop specializing in only organic roasts. He is using the equity of his condo as _______ to obtain a loan from his local bank.

Collateral

In order to take quick advantage of opportunities that require external funding, a business owner who is short on chase may get a line of _______ from a bank or other financial institution.

Credit

Daniel wanted to start his own small business. After spending his own money on marketing research, Daniel asked his friend Chase to be his accountant since he was lacking skill in that area. They spent a few months writing a business plan, which then they presented to a bank to obtain funding. What does this example illustrate?

Daniel understands the steps needed to start a small business

Ming Lee got frustrated every time she tried to find a spice jar in her spice cabinet. She came up with a unique way to organize spices and is now investing hew money and time developing the product to be sold to others. Ming Lee would be classified as a(n) _______.

Entrepreneur

Trey has $25,000 in savings, two new laptops, two laser printers, and a variety of quality office furniture that he's using to start his new Internet auction startup business. This array of assets brought into a company is known as _______ financing because Trey is using real personal assets rather than borrowing funds from outside sources

Equity

A person who buys a franchise is known as the _______.

Franchisee

A small business owner must deal with ongoing worries about competition, employee problems, rent increases or changing in market demand. All of these are contributing factors to which disadvantage of small business ownership? - managerial incompetence - inability to cope with growth - high stress levels - undercapitalization

High stress levels

Businesses that innovate and open new markets in the fields of computers, biotechnology, and robotics are called _______.

High technology

_______ use a company's existing resources to launch new products and generate new profits. They are the creative people who work as entrepreneurs within corporations.

Intrapreneurs

Flexibility for the small business owner means that _______.

It can more easily adapt to changing market demands

Which of the following is correct in regard to economic turbulence and small business? - It has hurt nearly all small businesses - Small businesses have a hard time reacting to change quickly - It has provided both opportunities and threats - It has allowed large businesses to thrive and small businesses to fail

It has provided opportunities and threats

Small businesses often require _______ money to start and maintain than do larger businesses.

Less

A small business makes goods and customizes its products to meet specific customer needs and wants. This business is a _______.

Manufacturer

Juanita makes organic salsa that she sells directly to stores around the country. She customizes the salsa to her customers' tastes. Juanita is a small business that is also a _______.

Manufacturer

The US' largest living generation are called _______.

Millennial's

While large corporations must compete for large market segments, small firms can focus their efforts on a precisely defined group of customers known as a market _______ which allows them to satisfy a need that other companies have not addressed.

Niche

_______ likely affects a company's reputation more than anything else, at least initially.

Poorly managed growth

Which industry is best characterized by the acquiring of goods from producers or wholesalers and then selling them to consumers?

Retailing

In a _______ economy, entrepreneurs earn income by renting out an underutilized resource such as lodging of vehicles.

Sharing

Javier's Jalapeno hut is the newest taco stand on campus. Javier is the owner and he employs two students to work part-time. In terms of its size, the Jalapeno hut would be considered a _______ business.

Small

The SBA is an agency focused on offering assistance to _______.

Small business owners

A growing trend amount small businesses is _______; which involves individuals who use entrepreneurship to address social problems.

Social entrepreneurship

Pranav would be a direct seller if he _______. - Managed to get his product line sold in major retail outlets - Sold his product through media outlets like the internet - Recruited other people to sell his products - Sold his products through face-to-face sales presentations

Sold his products through face-to-face sales presentations

Due to changes in communication and advancements in _______ small companies can better customize their services quickly for international customers.

Technology

_______ is when suppliers allow a business to take possession of needed goods and pay for them at a later date or in installments.

Trade credit

Angelo was all set to start his new business. Although he did not have as much cash as he would have liked, he figured that once the business got going, the cash generated from sales would keep the business running. He was surprised, however, that sales weren't as strong as he thought and now he is cash-strapped. Angelo is experiencing a common problem known as _______.

Undercapitalization

The lack of funds to operate a business in a normal and potentially successful manner is known is _______.

Undercapitalization

The popular TV show Shark Tank features wealthy individuals looking to part with some of their money in order to help others start a new business. In return for giving these would-be business owners money, the investors will receive part ownership in their business. These investors are called _______.

Venture capitalists

All of the following are typically true of acquiring an existing business EXCEPT _______. - you will most likely acquire the existing network of suppliers - you most likely will acquire a built-in network of customers - you are free from existing problems of the previous owner, if any - some guesswork will be eliminated as the business is already up and running

You are free from the existing problems of the previous owner, if any

A would-be entrepreneur might choose retailing, services, and high technology industries to start their businesses because these fields _______.

are relatively easy to enter

John has a good idea for a candy manufacturing business. He decided that he wanted to take the risk, become an entrepreneur, and start his own business. Now, 10 years later, John's candy company has 20 locations all over the US and employs nearly 1,000 people. This example illustrates _______.

how small business fuels job creation and innovation