Chapter 5 Vocab
Small-business institutes (SBIs)
groups of senior and graduate students in business administration who provide management counseling to small businesses
Which of the following is not a recognized category of a franchising arrangement?
A franchisor and a franchisee form a limited partnership to produce and sell a good or a service.
The organization chart for a business would appear in which section of the business plan?
Appendix
Samuel would like to expand his T-shirt printing and sales business internationally, and he plans to contact the Small Business Administration (SBA) to determine how the organization can assist him in his expansion efforts. Which of the following is not a service the SBA provides to boost small business participation in global markets?
Arranging for crowdfunding of up to $10 million for small-business owners
Which of the following is not correct regarding Small Business Administration (SBA) management assistance?
Correct answer.The SBA pays Service Corps of Retired Executives (SCORE) advisors for their services to small business owners.
Malik must submit a business plan with his loan application. He has just finished the section of the plan that discusses the weaknesses of the business and how he plans to deal with those. Malik has just completed the _____ section.
Critical Risks and Assumptions
Elif is a musician who would like to raise money to start her business. She decides to use ____ as a source of financing. To do so, she posts a description about her business and products on a website and invites people to contribute.
Crowdfunding
Since she was 12 years old, Ama has dreamed to own and operate a food truck that will sell traditional West African cuisine. Ama's desire to create a new business is?
Entrepreneurial spirit
Shanice hopes to open a tool and equipment supply company, and her financing plan relies heavily on raising funds by promising investors a share of future profits and an ownership stake in the business. What type of investment funding is Shanice relying on for the start-up and overall success of her business?
Equity financing
Camille would like to open a small consignment shop in her hometown of Lansing, Michigan. Which of the following is an accurate statistic regarding female-owned businesses in the United States that will likely encourage Camille to open her consignment shop?
Female-owned businesses generate $1.9 trillion in revenues each year.
On Saturday, Chun told her friend Rishaan that she desired to open her own clothing store, but she expressed reservations to Rishaan about the responsibilities associated with owning and operating a small business. If Rishaan wants his friend Chun to "follow her dreams" and open her own clothing store, Rishaan should share with her which of the following recognized advantages of small business ownership?
Independence
In his first Introduction to Business class, Hugo's professor noted in passing that there are several advantages associated with owning a small business, and since Hugo would eventually like to open his own personal-training business, he is eager to learn more. Which of the following is not a recognized advantage of small business ownership?
Low risk of failure
Bhavika has created a business plan as part of an assignment for her entrepreneurship class. Her plan is for a screen-printing business. In the _____ section of the business plan, Bhavika discusses current competition, pricing, and promotion.
Marketing plan
Portia knows the customers of her hat shop by name and knows each of their preferences. What small business advantage does this demonstrate?
Personal relationships with customers
Suppose your friend Arthur wants to quit his $90,000 per year job at an information technology firm to open his own music shop. If you want Arthur to "keep his day job" and refrain from opening his own shop, you should share with him which of the following recognized disadvantages of small business ownership?
Risk of failure
Which of the following is not a recognized component of a business plan?
SBIC list
Which of the following is not correct regarding Small Business Administration (SBA) financial assistance?
The SBA distributed nearly $1 billion in Paycheck Protection Program loans to help small businesses keep employees on the payroll and stay open during the COVID-19 pandemic.
Your friend Giulia plans to open her own computer-repair business. You have informed Giulia that to increase her likelihood of small business success, she will first need to develop a carefully constructed guide regarding the restaurant's management team, labor force, marketing, and finances. To which of the following were you referring in making this recommendation to Giulia?
The business plan
Flynn wants to start a new dog-grooming business. Which of the following is not a recognized factor that may influence Flynn to start his small business?
The economic safety and security associated with starting a small business
______ entrepreneurs own 42 percent of all businesses.
Women
Business plan
a carefully constructed guide for the person starting a business
Small Business Administration (SBA)
a government agency that assists, counsels, and protects the interests of small businesses in the United States
Service Corps of Retired Executives (SCORE)
a group of businesspeople who volunteer their services to small businesses through the SBA
Franchise
a license to operate an individually owned business as though it were part of a chain of outlets or stores
Suki is discussing franchising with her uncle. He owns and operates a BP franchise. Suki knows from her business courses that her uncle operates a type of franchise in which _____.
a manufacturer authorizes a number of retail stores to sell a certain brand-name item
Franchisee
a person or organization purchasing a franchise
The UPS store offers franchises to investors who have a net worth of at least $150,000 and can pay an initial franchise fee of $29,950. The UPS store is considered the _____ and benefits from the arrangement ______.
franchisor; by having more capital available to expand operations and use for advertising
Sriranjani has a motorcycle and ATV store. Her customers often talk about trikes. Sriranjani orders some Harley-Davidson Trikes for her inventory. Her actions are possible because small businesses _____.
have the ability to quickly adapt to change
Frustrated that she was working many hours for someone else, Morgan decided to start her own business. She could work when she wanted to and take a day off as needed instead of having to work on a set schedule. Morgan was likely influenced by ____ when starting her own business.
independence
Venture capital
money that is invested in small (and sometimes struggling) firms that have the potential to become successful
Small-business investment companies (SBICs)
privately owned firms that provide venture capital to small enterprises that meet their investment standards
Franchising
the actual granting of a franchise
Your friend would like to own their own business one day. You have learned a lot about franchises in your business course, so you tell your friend that as a franchisee, they would benefit from _____.
the use of the brand image and design of the business
Small businesses are important to the U.S. economy for all of the following reasons except _____.
they have generated 50 percent of net new jobs over the past 20 years
Small-business development centers (SBDCs)
university-based groups that provide individual counseling and practical training to owners of small businesses
Diego has invested $50,000 in Luca's restaurant business, Luca's Seafood LLC, in Miami, Florida. Although the restaurant has struggled in the last few years, it is not because of a lack of customers; usually, there is a "wait list" to eat there. The restaurant needs to expand its seating capacity to increase its profits. Diego is convinced that with the extra $50,000 investment, Luca's Seafood will be positioned for long-term success, and he will "reap the reward" of seeing his investment grow. In this scenario, Diego is which of the following?
A venture capitalist
Which of the following businesses would not be considered a small business?
A wholesale trade company with $1 million in profit and 300 employees
Weizhe has grown tired of his high-tech job in Silicon Valley, California. He plans to start up a business, Weizhe the Wanderer LLC, which involves him purchasing a recreational vehicle (R.V.), touring the country, and posting vlogs on YouTube for viewers to enjoy that will compensate him for his travels. To get started, Weizhe is going to post a description of his business on the online site Kickstarter, hoping that viewers will contribute the $130,000 required for him to purchase the R.V. Weizhe plans to rely on which of the following types of funding to get his business started?
Crowdfunding
Giovanni would like to start his own business, but he has very little savings. Additionally, his family isn't willing to invest any money into his business because they fear it may fail. Giovanni's bank is also unwilling to provide a loan that is large enough to start the business. This is an example of which disadvantage of small business?
Limited ability to raise capital
Your friend Shiro wants to open an automotive tire shop, but he is not familiar with the financial aspects of owning and operating a small business. You would like to give Shiro a realistic assessment of the financial challenges and opportunities he may face. Which of the following is correct regarding the financial aspects of entrepreneurship and small business ownership?
One cash flow obstacle often leads to others.
Iben has been operating a dry-cleaning business for the past 32 years. Iben is going to retire next year, and he plans to transfer ownership of the business to his son Toben. Prior to the transfer, Iben wants to emphasis to Toben that the survival of a small business can be challenging, depending in many respects on the small business owner's ability to use the key "ingredients" available to them both effectively and efficiently. Which of the following is not a key ingredient in the survival of a small business?
Qualified immunity
Kushi has collected money from savings, family investments, and bank loans in order to start her own florist shop. She is optimistic that her business will be a success because she loves arranging flowers and receives many likes and comments when she posts her designs online. Kushi asks you, a business major, what advice you have about starting a business. Which of the following is correct information you can share with Kushi?
Starting a small business requires much more than optimism and a good idea.
Your friend Suhani would like to open her own wedding venue business. Before Suhani does so, she comes to you seeking a realistic preview of what she may face as an entrepreneur and a small business owner. Which of the following is correct information you can share with Suhani?
Starting a small business requires much more than optimism and a good idea.
Which of the following is correct regarding global perspectives in small business?
Technology now gives small businesses the leverage and power to reach international markets that were once limited solely to large corporations.
Which of the following is a recognized component of a business plan?
The executive summary
Suppose cleaning and maintenance company MaidPro grants a franchise to Big Apple Cleaners LLC to operate a franchise in New York City. In this scenario, Big Apple Cleaners LLC is which of the following?
The franchise
Suppose fast-food chain McDonald's grants a franchise to Gateway Enterprises LLC to operate a McDonald's restaurant in St. Louis, Missouri. In this scenario, McDonald's is which of the following?
The franchisor
Small business
an independent business with fewer than 500 employees, depending on its industry
Franchisor
an individual or organization granting a franchise
Haamid has received an investment for his small business from a private individual who invested money in exchange for ownership in Haamid's company. Haamid likely received the investment from a(n) _______.
angel investor