POB Ch. 5

15.What do you call the individual that purchases a franchise?

franchisee

27.What is the purpose of a business plan?

to identify, describe and analyze a business opportunity and/or a business already under way - establish a strategy for acquiring funds to keep a business going. - guide reference document

34.Why are many service providers considered retailers?

provide their services directly to ultimate consumers - to sell goods and services - independant contractors

4.The principal immediate threats to small and mid-sized businesses include ________________, energy and other supply shortages or cost escalations, and excessive household and/or corporate debt. (hint: we are currently seeing this in our economy)

rising inflation

31.A business that lacks funds to operate normally faces a problem known as __________________

Undercapitalization

6.The expression "it takes money to make money" holds especially true in developing a business enterprise. To make money from a small business, the owner must first provide or obtain money—otherwise known as __________

capital

13.What are at least two defining features of millennials?

concerned with advancement, recognition, and improved capabilities - born between 87 - not concerned about money - virtual communication

36.What is the purpose of the Small Business Administration?

continues to help small business owners and entrepreneurs pursue the American dream.

8.Buying an existing business has the advantage of providing a built-in network of ________________, suppliers, and distributors and reducing some of the guesswork inherent in starting a new business from the ground up.

customers

21.Securing a mortgage from a bank for a new business venture is an example of _______________

debt financing

26.In the process of starting a business, along with developing a business plan, the entrepreneur needs to

decide on an appropriate legal form to business ownership

3.As a small business grows, growth often requires the owner to give up a certain amount of ________

direct authority

10.A company is struggling in the marketplace and decides to reduce layers of management, personnel, and work tasks in order to remain competitive. This company is _____________

downsizing

29.It has often been said that the greatest impediment to the success of a small business is the ________________

entrepreneur

24.The act of financing one's business by using real personal assets is known as _______________

equity financing

16.A license to sell another's products or to use another's name in business, or both, is called a(n) ____________

franchise

7.The most important source of funds for any new business is the ________

owner

17.What is bartering?

the exchange of goods and services between two or more parties without the use of money. - trading products and goods to other businesses

23.What is a venture capitalist?

a type of private equity capital -person who gives money to small businesses - stock

19.What is a line of credit?

an agreement by which a financial institution promises to lend a business a predetermined sum on demand.

22.What are the main suppliers of external financing to small businesses?

banks

2.As an advantage of being a small business owner, independence means

being your own boss

5.The business plan should include an explanation of the business, an analysis of the competition, estimates of ______ and ______, and other information.

business & profit

37.A person who is involved in the process of creating and managing a business to achieve his or her desired objectives is engaged in?

business management - entrepreneurship

28.A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals is known as a(n) ________________

business plan

25.To make profits from a small business, the owner must first provide or obtain _____________ to start the business and keep it running smoothly.

capital

32.What are the three difficulties small business owners face?

Lack of Time, Lack of funds, Difficulties Balancing Growth and Quality. changing market and demand

35.What type of business has been growing faster than other classifiable firms and represents almost 30 percent of all small businesses?

Minority owned businesses

11.Approximately what percent of all small businesses are based out of the home?

52%

1._____________ is the process of creating and managing a business to achieve desired objectives.

Entrepreneurship

12.What group represents over 17 percent of those living in the United States and is largely employed in the retail industry?

Immigrants

33.A challenge associated with the sharing economy is

Peer to Peer - The issue of trust, giving, sharing, obtaining

38.An AirBNB would be an example of what type of economy?

Peer-to-peer, Sharing

30.Why do some small businesses choose to stay small and are not interested in wide-scale growth?

Rapidly advancing technology makes it hard for small businesses to expand. Overcapitalization makes it difficult to expand. - exculating costs can threaten success

9.In major corporations, _______________ takes responsibility for, or "champion," the development of innovations of any kind within the larger organization.

intrapreneurs

20.What is collateral?

item of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms - lending a bank secure the debt

14.What are three disadvantages of a franchise?

the initial costs of buying the franchise, you pay continuing management service fees and you may have to agree to buy products from the franchisor. - restrictions on purchasing - limited profit line

18.What is trade credit?

when suppliers allow the business to take possession of the needed goods & services & pay for them at a later date.