Ch 6 Business

Kayla wanted to open her own dress design business. She spent a few hours putting together a marketing plan, then selected an award-winning dress she designed and wore it to the meeting with the bank. The most likely reason she did not receive a loan was:

she did not develop a thorough business plan

__________ businesses are businesses that are independently owned and operated, are not dominant in their field of operation, and meet certain standards of size in terms of employees or annual receipts.

small

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts is a(n):

small business

Select the characteristics of an entrepreneurial team that will be developing and marketing a new product.

A group of experienced people Each from different areas of business Members have complementary skills and are creative

Which of these are centers that offer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help?

Business incubators

Community Development Financial Institutions (CDFIs) are motivated to make sure that their borrowers are successful because if borrowers do not pay back their loans the _____ takes the hit

CDFI, lender, or CDFIS

______ refers to accepting the risk of starting and running a business.

Entrepreneurship

Chris spent his own money on marketing research, and consulted his sister Kara, who is an accountant. They spent the next few months writing a business plan. Which of the following are some business functions Chris would have addressed?

Financing Marketing Planning

The most important things investors want to know are what makes the product more desirable than what's already available and whether or not the product can be patented. In which section of the business plan should investors look to find this information?

Marketing plan

____ want to maintain a balanced life style while doing the kind of work they want to do

Micropreneurs

The U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans is called the:

Small Business Administration

An inexpensive marketing research study may help you determine which of the following?

Where to locate Whom to select as your target market What is an effective strategy for reaching your target market

There are a few hurdles that prevent many small businesses from engaging in the global market. Which of the following are examples of such problems?

Would-be exporters do not know how to get started. Financing is often difficult to find.

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are:

a market

To keep track of daily sales, expenses, profits, inventory control, customer records, and payroll a small business needs a good

accounting system

If managers do not have expertise in all the necessary disciplines of the business, the Management Team portion of the business plan should mention outside __________

advisors

When writing a business plan, it is important to:

analyze the competition calculate how much money you need to start

becoming a _______ is one of the best ways to learn about how to run a business.

apprentice

David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how:

apprenticeships can benefit both the business owner and the apprentice

Entrepreneurs must recognize that they need competent and motivated employees. Since they can't compete with larger firms' pay and benefits, they need to:

be respectful of employees' opinions maintain good employee relations provide more challenging opportunities to learn

In 2019, online retail sales reached over $365 ________ or approximately ________ percent of all retail sales

billion 12

A(n) ______ is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s).

business plan

Mark recently started a small consulting firm. He is drafting a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s). Mark is writing a(n) ___________ _____________

business plan

Since the Executive Summary is the summary of the proposed business venture, it should include parts of the entire __________ ____________

business plan

A market consists of consumers with unsatisfied wants and needs who have both resources and the willingness to:

buy

Potential sources of ________ for an entrepreneur are personal savings and government agencies such as the Small Business Administration (SBA), the Farmers Home Administration, the Economic Development Authority, and the Minority Business Development Agency.

capital

When starting a small business, government agencies such as the Small Business Administration (SBA), the Farmers Home Administration, the Economic Development Authority, and the Minority Business Development Agency are possible sources of:

capital information

A banker or investor in a small business is very interested in making sure you are a person of good ______ as a small business owner

character

The ______ section of a business plan describes company operations to date (if any), potential legal considerations, and areas of risk and opportunity. This portion also summarizes the firm's financial condition, and includes past and current balance sheets, income and cash flow statements.

company background

If managers do not have expertise in all the necessary disciplines of the business, the Management Team portion of the business plan should mention outside _________

consultants or advisors

Which part of the business plan summarizes the most attractive points of your project in as few words as possible?

cover letter

More personal _______ service and the ability to respond quickly is an advantage for small businesses.

customer

Among the hurdles small businesses must overcome in starting to operate globally are

difficulty finding financing bureaucratic paperwork understanding cultural differences

Opportunity, profit, independence, and challenge are some reasons people are willing to take the risks of being a(n)

entrepreneur

Individuals who possess such attributes as being self-directed, action-oriented, and tolerant of uncertainty can make excellent _______ like bill gates and steve jobs.

entrepreneurs

Local community college classes are a good place to start to learn about business and _______

entrepreneurship

Planning, adequate ________ keeping good business records, knowing your customers, and managing employees are what it takes to start and run a small business.

finances

A good business plan takes a lot of time to write, but you have only a few minutes to convince readers not to throw it away. this is why your _________ summary is very important

executive

Some causes of small-business Blank______ include underpricing or overpricing goods or services, starting with too little capital, going into business without first learning something about the industry or market, and underestimating how much time it will take to build a market.

failure

True or false: Addressing the cover letter on your business plan "To whom it may concern" is considered preferable.

false

Planning, adequate _______, keeping good business records, knowing your customers, and managing employees are what it takes to start and run a small business.

financing

Potential sources of _________ for an entrepreneur are personal savings and government agencies such as the Small Business Administration (SBA), the Farmers Home Administration, the Economic Development Authority, and the Minority Business Development Agency.

funding

The expansion and development of the Internet has sprouted a world of small web-based businesses. This, among other reasons, may explain why online sales are rapidly:

increasing

business _________ are centers that offer businesses in the critical stage of early development low-cost offices and access to basic services such as accounting, legal advice, and secretarial help

incubators

All organizations require the following:

information management capital

Because investors want to be protected against any possible mishaps, it is also a good idea to include a description of _______ coverage in the Company Background portion of the business plan.

insurance

Because investors want to be protected against any possible mishaps, it is also a good idea to include a description of ________ coverage in the Company Background portion of the business plan.

insurance

Because investors want to be protected against any possible mishaps, it is also a good idea to include a description of _________ coverage in the Company Background portion of the business plan.

insurance

______ are creative people who work as entrepreneurs within corporations.

intrapreneurs

Community Development Financial Institutions (CDFI) have been successful because they:

maintained financial discipline other lenders lack provide counseling on improving cash flow offer counseling on marketing strategies

Managing a small business became relatively easy with the advent of inexpensive personal computers. Inexpensive computer systems and off-the-shelf or even free, open-source software make it easy for the small business manager to:

manage customer records follow the daily sales and expenses

The part of a business plan that includes an organization chart, job descriptions of listed positions, and detailed resumes of the current and proposed executives is called the _______ __________ section

management team

An inexpensive __________ ____________ ____________ can help you determine where to locate your business, whom to select as your target market, and what is an effective strategy for reaching it.

marketing research study

Entrepreneurs start a business with the desire to grow the business and generate wealth while ___________ start a business that will stay small, allowing them to have a balanced lifestyle and the ability to do the kind of work they want to do

micropreneurs

Two advantages small firms have over large firms include more personal customer service and the ability to respond quickly to:

opportunites

The most common source of funding for small businesses after friends and family is ________ savings

personal

Entrepreneurs often come up with an idea for a new business and need financing. At this stage, it is important to develop a business ___________ , which forces potential small-business owners to be quite specific about the products or services they intend to offer (answer is one word)

plan

Managerial incompetence and inadequate financial planning are two common reasons for

small business failure

Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:

starting with enough money to hire a good lawyer and accountant that finding and retaining good workers is hard

While a business plan is a detailed document with many sections, its overall purpose is to describe the nature of the business, the ______ market, and the _______ over the competition

target advantages

An entrepreneurial _______ is a group of experienced people from different areas of business who join together to form a ________ team with the skills needed to develop, make, and market a new product

team managerial

A business plan is a detailed written statement that describes:

the target market the resources and qualifications of its owner(s)

True or false: Most entrepreneurs do not get their ideas from a flash of inspiration; they come more from their passions or looking at problems.

true

True or false: Personal savings, venture capitalists, and government agencies such as the Small Business Administration (SBA) are possible sources of capital or information when starting a small business.

true

True or false: The owner of McDonald's, Ray Kroc, turned to his business associates - his suppliers - for funds to keep the business going.

true

True or false: The principles of management are similar for a small neighborhood business and a giant global firm.

true

Some common causes of small business failure include:

underpricing or overpricing goods or services starting with too little capital no experience in that business or industry

Phil invests in new businesses in exchange for partial ownership in those businesses. Phil is a(n) _______ _______

venture capitalist

After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates:

why people take the risks of entrepreneurship