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.