MGNT 350 chapter one test

What percent of all real estate businesses are small?

65

a financial research firm, defines a business failure as a business that closes as a result of either

(1) actions such as bankruptcy, foreclosure, or voluntary withdrawal from the business with a financial loss to a creditor; or (2) a court action such as receivership (taken over involuntarily) or reorganization (receiving protection from creditors).

what percent of all new businesses are forced to close their doors with a loss to creditors.

20

Maintaining a capable workforce is a never-ending task for small businesses

A second mortgage, loans from friends or relatives, a line of credit from a bank or credit union, or a combination of sources may be sufficient

what in the workplace can provide creative problem-solving ideas.

Diversity

Causes of Business Failure

Ineffective and inefficient management, which shows up in many ways, is the number one cause of business failure. Inadequate financing, industry weakness, inexperience, and neglect are other major

A business is small if it meets the following criteria

It is independently owned, operated, and financed. It has fewer than 100 employees has relatively little impact on its industry.

What industry employs the largest number of people in small business?

Services. 71% of all service businesses are small.

To make innovation a priority, small business owners need to

Take risks Take advantage of customer connections Keep decision-making agile Experiment and adapt Hire for innovation

why has innovation come most often from independent inventors and small businesses.

The research and development departments of most large businesses tend to concentrate on the improvement of the products their companies already make.

Gathering Sufficient Capital.

entrepreneurs try to start a business without obtaining sufficient start-up capital. The lifeblood of any young business is cash

To take advantage of economies of scale

large businesses usually seek to devote resources to produce large quantities of products over long periods of time. This commitment of resources limits their ability to react to new and quickly changing markets as small businesses do.

With the Industrial Revolution,

mass production became possible

The most common types of innovation relate to

services and products

although large manufacturers tend to enjoy a higher profit margin due to their economies of scale

small businesses are often better at distribution.

what percent of firms with revenue of over $1 million are women owned.

20

What percent of innovations are product related

32

what percent of all innovations are service related

38

Women-owned firms make up what percent of all privately owned businesses.

39

What percent of manufacturers and mining companies are classified as small.

40

What percent of recent college graduates want to start their own business.

61

What percent of arts, entertainment, and recreational service businesses are small.

62.3

What defines a small business?

A business is generally considered small if it is independently owned, operated, and financed; has fewer than 100 employees; and has relatively little impact on its industry.

Some sources of innovations include

Global Innovation Initiative—This program provides grants to university consortia focusing on science, technology, engineering, and mathematics, or STEM-related issues America Makes—America Makes supports and facilitates research collaboration among leaders from business, academia, nonprofit organizations, and government. National Network for Manufacturing Innovation—NNMI is a network of research institutes that focuses on developing and commercializing manufacturing technologies through public-private partnerships between U.S. industry, universities, and federal government agencies

How long do start-up businesses typically last?

Of the businesses started in 2015, 79.9 percent survived 2016. About 50 percent see their fifth birthday. About one-third of establishments survive 10 years or longer

Market Size and Definition.

Once you conclude that a market is large enough to support your business, you will want to learn what your customers have in common

Four types of innovation that small businesses are most likely to produce include

Product innovation: Developing a new or improved product Service innovation: Offering a new or altered service for sale. Process innovation: Inventing a new way to organize physical inputs to produce a product or service. Management innovation: Creating a new way to organize a business's resources

business failure.

a business closes with a financial loss to a creditor.

improve your chances of achieving success in running a small business by

identify your competitive advantage, remain flexible and innovative, cultivate a close relationship with your customers, and strive for quality.

business termination

occurs when a business no longer exists for any reason.The owner may have an opportunity to sell her business to someone else for a healthy profit, or be ready to move on to a new business or to retire, or she may have simply lost interest in the business.

the Association for Enterprise Opportunity (AEO—a trade group dedicated to microbusinesses) and the U.S. Census Bureau define microbusiness as

one with fewer than five employees, including the owner.

SBA found the majority of innovations originate from the

smallest businesses, those with 1 to 19 employees

creative destruction.

the replacement of existing products, processes, ideas, and businesses with new and better ones

Why is it important to classify businesses as big or small?

they determine whether a business may qualify for SBA assistance and for government set-aside programs, which require a percentage of each government agency's purchases to be made from small businesses.

How much impact could businesses with so few employees generate

they employ more people than are in the government sector—federal, state, and local levels combined. They employ more than twice as many

One of the most common mistakes is

to neglect to plan for the future because planning seems too hard or time-consuming.

competitive advantage.

you have to offer your customers more value than your competitors do.

intellectual capital.

your employees are your most valuable assets. It is their skill, knowledge, and information that make your business successful.