Business principles chap 7

Ronit has been involved in many start-up projects. However, none of his ventures have been successful because of severe competition in the market and personal issues such as poor health and lack of dedication. Which of the following threats is highlighted in the given scenario?

High risk of failure

Small businesses often have an advantage in foreign markets where customers want to deal directly with a company's top management.

True

When entrepreneurs develop new products that we didn't even know we needed until we had them, they are showing the entrepreneurial characteristic of vision

True

The U.S Small Business Administration (SBA) microloan program lends an average of $50,000 to start-up businesses through community nonprofit organizations.

False

Raoul is an illiterate who does not have proper skills for any job. As a result, he is unable to find permanent employment. As a last resort, Raoul starts a diner in his home to earn a regular income for his family. In the given scenario, Raoul most likely started the diner because it offered _____.

A chance of survival

Who among the following people is most likely to become a necessity entrepreneur?

A person who experiences discrimination in the standard workplace

The U.S. Small Business Administration (SBA) gives interest-free loans to start-up businesses and fully guarantees loans from local commercial lenders.

False

Based on statistics from the U.S. Small Business Administration (SBA), small businesses account for 78% of all private sector employees.

False

Based on statistics from the U.S. Small Business Administration, small businesses comprise 49.9% of all businesses in the United States.

False

Dominic feels that an incredible string of bad luck has affected his personal life. He also feels that his boss is subjecting him to unfair treatment at work for no fault of his. Dominic's perceptions suggest that he has an internal locus of control.

False

External locus of control is a deep-seated sense that the individual is personally responsible for what happens in his or her life.

False

For entrepreneurs, there is no correlation between dollars earned and hours worked.

False

In the context of self-reliance, when things go well, people with an internal locus of control feel that the actions of other people have led to their success.

False

Rudy owns a small metal fabrication business that employs 23 workers. As the owner of a small business, one of the major advantages that Rudy enjoys while competing with larger firms is reduced burden of complying with government regulations.

False

Small businesses generate 50% of total employment in American inner cities.

False

Ted's new company is experiencing a steady decline in profit. He needs external financing to prevent his company's profits from declining further. Considering the fact that he wants to exercise sole ownership and control over the firm for as long as possible, Ted is likely to find angel investors who are interested in helping him meet his financial needs.

False

The Global Entrepreneurship Monitor (GEM) shows that people living in high-income countries tend to be much more willing to start their own businesses than people living low-income countries.

False

In the context of the U.S. economy, small firms tend to be effective innovators because of the presence of revolutionary new ideas.

True

Administrative costs for small health plans are much higher than for large firms making it tougher for small firms to offer coverage to their employees

True

An effective business plan is usually 25 to 50 pages long.

True

In the context of small businesses and the economy of a country, entrepreneurship rates are significantly lower in countries where it is hard to get fired

True

In the context of opportunities and threats, overhead costs for small businesses:

are often lower than big companies.

Michael is a middle-aged professional who lost his job five months ago when his former employer downsized. He has actively been looking for work ever since but has not been able to find a job that utilizes his abilities or offers an income similar to his previous position. He is beginning to realize that the only way for him to survive his current situation is to start his own business. In this scenario, Michael will most likely become a(n) _____.

necessity entrepreneur

According to the U.S. Small Business Administration (SBA), to officially count as "small," _____.

the average revenue of a business should range from $0.75 million to $28.5 million

Priscilla is a trader of silver and diamond jewelry. Due to a recessionary trend in the industry, her business has not been making any profits for a few months. As the end of this economic trend cannot be easily ascertained, she decides to get her house mortgaged so that she can add a new line of business of trading in semi-precious stones. This financial risk appetite of Priscilla illustrates her _____ as an entrepreneur.

tolerance of uncertainty