Exploring Business v4.0 - practice test

What is a business plan?

A business plan is a document that identifies the goals of a proposed business and explains how these goals will be achieved, including building the business, making it sturdy, and obtaining financing.

What is a lifestyle business?

A lifestyle business is a business that is created with the goal of supporting a particular lifestyle rather than maximizing profits.

What is a serial entrepreneur?

A serial entrepreneur is an entrepreneur who frequently comes up with new ideas and launches new businesses with the intention of selling each business and starting a new one.

What is the definition of a small business?

A small business is an independently owned and run business organized for a profit, with little influence in the industry and of a certain size that varies by industry.

What is the definition of an entrepreneur?

An entrepreneur is someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it.

What are the reasons why businesses fail?

Businesses fail due to a bad business idea, cash problems, managerial inexperience or incompetence, lack of customer focus, and inability to handle growth.

What are the reasons why businesses succeed?

Businesses succeed by knowing the business, basics of business management, having the proper attitude, adequate funding, effective money, time, and people management, satisfying customers, and knowing how to compete.

How do entrepreneurs differ from small-business owners?

Entrepreneurs are innovators who offer new or improved products, take risks, and plan to grow and expand their company, while small-business owners start a business to provide income, are not innovative, and have no plan for expansion.

In which industries are small businesses concentrated?

Small businesses are concentrated in the services industry (80%), with 16% in professional, scientific, and technical, and 11% in retail and wholesale. In the goods-producing sector, 11% are in construction.

Why are small businesses important to the U.S. economy?

Small businesses create jobs, spark innovation, provide opportunities for women and minorities, achieve financial success and independence, and support big business.

How do small businesses foster innovation more effectively than large ones?

Small businesses foster innovation more effectively than large ones by attracting talent, enabling faster decision making, conducting focused research, and providing compensation incentives.

What are the advantages of business ownership?

The advantages of business ownership include independence, financial rewards, lifestyle, learning opportunities, creative freedom, and personal satisfaction.

What are the advantages of starting your own business?

The advantages of starting your own business include being your own boss, accommodating a desired lifestyle, achieving financial independence, enjoying creative freedom, and using your skills and knowledge.

What are the disadvantages of business ownership?

The disadvantages of business ownership include financial risk, stress, time commitment, and undesirable duties.

What are the important questions to ask before starting a business?

The important questions to ask before starting a business include the type of business, feasibility of the business idea, whether to start a new or existing business/franchise, whether to start alone or with others, and the desired form of business organization.

What are the sections of a business plan?

The sections of a business plan include the executive summary, description of proposed business, mission statement and core values, management plan, goods, services, and the production process, marketing, global issues, financial plan, and appendices.

What are the sources of small-business assistance from the Small Business Administration?

The sources of small-business assistance from the Small Business Administration include writing a business plan, starting a business, obtaining financing, managing a business, and individualized advice from the Service Corps of Retired Executives (SCORE).

What are the three characteristics of entrepreneurial activity?

The three characteristics of entrepreneurial activity are innovation, risk-taking, and working under a certain degree of uncertainty.