Chapter 6 learning goal 2

18. How is it that a business that employs 1,500 people, or has revenues of $22 million, be considered small?

A small business is considered small relative to the industry it is in. If it still meets the criteria listed above, a $22 million business would still be considered small. In manufacturing a company can have 1,500 employees and still be considered small.

17. What are three criteria used by the SBA to classify a business as "small"? a.________________________________________________________________________________ b.________________________________________________________________________________ c.________________________________________________________________________________

A small business is one that is: a. independently owned and operated. b. not dominant in its field of operation. c. meets certain standards of size in terms of employees or annual receipts

20. What are two advantages small business owners believe they have over big business?

Small businesses owners believe their advantages over large businesses are: more personal customer service and their ability to respond quickly to opportunities.

21. What is the failure rate of small business? Why are the statistics misleading?

The Monthly Labor Review reports that 56% of new businesses don't last four years. A study by an economist indicates that the failure rate is only 18 percent over the first 8 years. However, the statistics can be misleading because when small business owners went out of business to start new and different businesses, they were included in the business failure statistics. Also, when a business changes its form of ownership from a partnership, for example, to a corporation, it was included in the statistics, as were retirements

22. a. If you want to be both independent and rich, you need to go after: _________________________ b. In general the easiest businesses to start are: ____________________________________________ c. In general the easiest businesses to keep alive are: _______________________________________ d. In general the businesses that can make you rich are: ____________________________________

a. If you want to be both independent and rich, you need to go after growth. b. In general the easiest businesses to start are the ones that tend to have the least growth and the greatest failure rate. c. In general the easiest businesses to keep alive are the difficult ones to get started. d. In general the businesses that can make you rich are the ones that are both hard to start and hard to keep going.

19. What are some statistics that illustrate the impact of small business on the American economy? a. ___________________________________________________________________________ b. ___________________________________________________________________________ c. ___________________________________________________________________________ d. ___________________________________________________________________________ e. ____________________________________________________________________________ f. ____________________________________________________________________________ g. ____________________________________________________________________________

a. There are 26.8 million small businesses in the U.S. b. Of all nonfarm businesses, 97% are considered small c. Small businesses account for more than 50% of GDP d. Nearly 750,000 businesses are started every year. e. Small businesses generate 60-80% of the new jobs each year. f. Small businesses employ about half of all private-sector employees g. About 80% of workers find their first jobs in small businesses.