Chapter 6 Bus Management test
According to the Small Business Administration, a small business is an independent business with fewer than ____________________ employees.
500
Why is location important to small businesses?
Most need good foot traffic to survive, many will stay away if it's not easy to find, customers don't want to travel far (all of the above)
Of all new businesses,
about one-third are profitable, one-third do not make a profit but continue to operate, and one-third lose money
a written description of the business idea
business plan
Entrepreneurs
come from all age categories and educational backgrounds.
If you start a new business, you need information about
competitors government regulations customers
Which part of the business plan discusses short and long term goals?
description of business
Which element of a business plan discusses the entrepreneur's short- and long-term goals for the business?
description of the business
A(n) blank is someone who takes a risk in starting a business to earn a profit.
entrepreneur
Scrubbles laundry detergent has been on the market for years. The manufacturer of Scrubbles recently added a new ingredient to give the detergent extra cleaning power. This is an example of an
improvement
blank capital is money provided by large investors to finance new products and new business that have a good chance to succeed.
venture
Money provided by large investors to finance new businesses
venture capital
Money provided by large investors to finance new products/businesses is known as
venture capital
Small businesses have an advantage over big businesses when customers
want more individual attention
In the United States, women own close to this percentage of small business.
35 percent
Technically, a small business is described to have fewer than ______________________ employees.
500
More than ____________________ new businesses are created in the United States every year.
625 thousand
Why should all small business owners develop business plans even if they are not required to obtain financing?
By developing a plan, the owner is forced to think about important activities, the amount of time they will take, and their cost. The plan also serves as a guide to keep the business on track.
Name at least three sources of funding for new businesses. Which is the most important?
Start-up financing, short-term financing, long-term financing
the process of starting, organizing, and managing a business
entrepreneurship
The most successful small business owners
establish good working relationships with professionals such as bankers, lawyers, and accountants
Members of the Service Corps of Retired BLANK are retired local business people who volunteer their services to counsel and mentor new business owners.
executives
All entrepreneurship opportunities emerge from inventions and innovations.
false
Everyone who owns a business is an entrepreneur.
false
Most new business owners obtain start-up money to finance their business from banks.
false
Once a business plan is written, it should never be revised nor updated.
false
Small businesses employ only 10 percent of U.S. workers.
false
Start-up financing is money needed to pay current operating costs of the business.
false
The process of starting, organizing, managing, and assuming the responsibility for a business is called capitalism.
false
The first step in developing a business plan is to
gather and review information
What is the first step in developing a business plan?
gather and review information
Successful entrepreneurs tend to have all the following characteristics EXCEPT
hesitant
Almost all people starting small businesses have graduated from
highschool
A designed change that increases the usefulness of a product, service, or process is called
improvement
a change the increases the usefulness of a product
improvement
An _______________________ is an invention or creation that is brand new.
innovation
a brand new invention
innovation
Products a business keeps on hands is referred to as
inventory
Which of the following does NOT describe a typical small business?
it is dominant in its field
Which of the following is NOT a description of a small business?
it is dominate in its field
Which of the following is probably the LEAST important factor in becoming an entrepreneur?
living in a major U.S. city
What is the LEAST important factor in becoming an entrepreneur?
living in a major us city
Large amounts of money paid over many years is which type of financing?
long-term
The land that the business is built on is which type of financing?
long-term
The type of financing needed for the main resources that will last for many years is called
long-term financing
Small businesses account for ____________________ of the U.S. gross domestic product each year.
more than half
Location is important to small retail businesses because
most retailers need good customer traffic to survive, many potential customers will stay away if the business is not easy to findcustomers generally do not want to travel long distances to find what they need (all of the above)
How long is a business plan written for?
one year
Short-term financing is obtained for a period of less than
one year
Most of the money needed to start a new business comes from
personal and business loans
A business blank is a written description of a business idea and how it will be carried out.
plan
Which of the following would NOT be discussed in the operations plan section of a business plan?
sales forecast
Which of the following is NOT part of the operations plan section of the business plan?
sales forecasts
Financing that is obtained for less than a year is which type of financing?
short-term
Money to pay for current operating costs of the business is which type of financing?
short-term
The type of financing needed for CURRENT operating activities is called
short-term financing
The federal agency that helps small business owners obtain financing and other support is known as
small business administration
Money used to open the business is which type of financing?
start-up
Purchase of the equipment to open a business is which type of financing?
start-up
The license to operate a business uses which type of financing?
start-up
A business plan includes a description of the strengths and weakness of competitors.
true
An entrepreneur is someone who takes a risk by starting his or her own business.
true
If the business owner needs help from others, especially for financing the new business, a business plan usually will be required.
true
In the U.S., nearly as many small businesses close as begin each year.
true
In the United States, nearly as many small businesses close as begin each year.
true
It is easier for a small business to meet the precise needs of customers than a large business.
true
Many small businesses fail simply due to their location.
true
One of the main reasons that businesses started by entrepreneurs fail is inadequate capital.
true
Successful entrepreneurs have many personal characteristics in common.
true
The most important step in starting a business is preparation.
true
U.S. businesses with just a single owner and no staff account for more than $990 billion in annual sales.
true
Small business owners
typically focus on products and services that meet the needs of a large group of customers.