chapter 6

a written description of the business idea

business plan

a written description of the business idea and how it will be carried out, including all major business activities.

business plan

if you were david, which choice would you make? why?

c. because its the safest route.

a change that increases the usefulness of a product

improvement

a designed change that increases the usefulness of a product, service, or process.

improvement

is the following start-up, short-term, or long-term. financing that is obtained for less than a year

short-term

is the following start-up, short-term, or long-term. money to pay for current operating costs of the business

short-term

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 own business.

true

successful entrepreneurs have many personal characteristics in common.

true

money needed for the important resources of a business (such as land, buildings, and equipment) that will last for many years.

long-term financing

someone who takes a risk in starting a business to earn a profit.

entrepreneur

the process of starting, organizing, and managing a business

entrepreneurship

the process of starting, organizing, managing, and assuming the responsibility for a business.

entrepreneurship

a brand new invention

innovation

most new business owners obtain start-up money to finance their business from banks.

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

what are the advantages and disadvantages of each route to small business ownership for david?

for the first route david would be able to start his business faster but it wouldn't be totally his. for the second choice route david would have to wait a bit for her to retire instead of getting his business started right away but would safely eventually be able to buy her out and get her business.for the last route he would have to follow the rules the franchise gives him but he will most likely be more successful.

an invention or creation that is brand new.

innovation

is the following start-up, short-term, or long-term. large amounts of mo0ney paid over many years

long-term

is the following start-up, short-term, or long-term. the land that the business is built on

long-term

one of the main reasons that businesses started by entrepreneurs fail is inadequate capital.

true

true or false. an independent business with 200 employees is considered a small business.

true

money provided by large investors to finance new businesses

venture capital

money provided by large investors to finance new products and new businesses that have a good chance to be very profitable.

venture capital

david obolski completed a community college program in small business management. he now wanted to own his own florist business. he had worked for flower-a-bunda during high school and college. in addition, he was able to save almost $20,000 toward starting his own business. however, he knew that he would need almost double that amount to qualify for the necessary loans to start up the business. david studied three ways he might start his business. a. he could find a partner to provide the additional cash. b. he could work for the owner of flower-a-bunda until she retired in seven years and buy the business with his accumulated savings. c. he could purchase a franchise for an investment of $20,000, however, david would have to pay a franchise fee of 6 percent of total sales each year to the franchisor.

c.

the money needed to pay for the current operating activities of a business.

short-term financing

an independent business with fewer than 500 employees.

small business

a government agency that helps small business owners develop business plans and obtain financing and other support for their companies.

small business administration (sba)

is the following start-up, short-term, or long-term. money used to open the business

start-up

is the following start-up, short-term, or long-term. purchase of the equipment to open a business

start-up

the amount of money needed to open the business.

start-up financing