BADM 103 Quiz Ch. 5

Omar owns a small technology business based on a unique product with growing demand. Although he feels like his idea is very marketable and his firm will be successful, he is having trouble obtaining funds to expand. He feels very strongly that he doesn't want to borrow money. Where would you recommend that he go to secure additional funds?

A small-business investment company

The following statement answers which major question that a business plan should address? "This business will serve more than 200 customers by the end of the year and employ seven full-time employees."

What are the goals for the business?

Azara asks for your advice in opening a new business. She plans to provide tax preparation and other accounting services to individuals and small-business owners in her community. Although she's a very good accountant with many years of experience, she doesn't have a lot of financial resources and has never run a business before. Of course, she wants an attractive means of starting as well as guidance, and she wants to operate her business with a reasonable chance of success. What will be your advice?

Consider purchasing a franchise

The purchaser of a franchise is called the franchisor.

FALSE, franchisee

The average length of an SBA loan is about 25 years.

False

You have been running a successful art and framing shop for three years. You want to expand but want to save your capital to expand production and for promotion. Therefore, you have decided to allow others to use your business name, materials, and methods in operating their own business for a fee. You are going to enter a _______.

Franchise agreement

Which of the following is false with regard to SBA loans?

If the SBA guarantees a loan, it will repay the lender up to 50 percent of the loan if the borrower cannot repay it.

In her small retail shop, Janisha knows most of her best customers by name and knows their preferences in clothing and shoes. This demonstrates which advantage of a small business?

Personal relationships with customers

What is the significant advantage of small business that helps retain effective employees who could earn more at a larger firm?

Personal relationships with employees

José applies for a small-business loan from the SBA for his new food truck. If he is approved for the loan, where will the money actually come from?

Private lenders

Who or what defines whether a business is small?

SBA

Christian, a recently retired corporate executive, is becoming restless in his new role and would like to fill some of his free hours by participating in the business community in some limited manner. Since Christian is financially secure and primarily interested in some sort of volunteer work, he should consider becoming involved with which of the following SBA programs?

SCORE

Vikram has observed an opportunity for selling his products overseas in India and Pakistan, and perhaps throughout Asia. He knows his products will sell well there, but he needs funds to take advantage of this opportunity. Where could he go for help?

The SBA's International Trade Loan program

Tallulah, a member of the Cowlitz tribe in Washington state, has a thriving small business but needs funds to expand. She really doesn't want a loan that she'll have to repay. Where would you advise her to go for financial assistance?

The SBA's Minority Business Development Agency

Kamal recently opened a Popeyes franchise and is having some troubles in running the business. Where would you recommend that Kamal go for advice and guidance?

The franchisor

The disadvantages of small businesses include all the following except _______.

ability to keep proprietary information from competitors

By age 31, Arjen was a plant manager in the snack-foods division. By 35, he headed the division, one of the most profitable in the corporation. Eventually, however, the company decided to relocate its corporate offices to a city far away from his relatives. Although he loved the job and thought the work was great, Arjen's lifestyle was awful. He was on the road so often that he was giving up much of his family life. Arjen had also become disenchanted with corporate life. He saw that the closer one got to the top, the more vulnerable one's position became. Thus, Arjen left the company to start his own snack-foods company. His thoughts and actions most clearly reveal his _______.

desire to determine his own destiny

Large firms commonly procure parts and partially assembled products from smaller firms because _______.

it is less expensive than making their own

Melissa would like to open a small business that is categorized as being in the distribution industry. To do this, she could open a _______ establishment.

retail, wholesale, transportation, or communications

Ernst & Young, a large accounting firm, would be most properly classified in the _______ industry, whereas a supermarket such as Albertsons would be included in the _______ industry.

service; distribution