Business 101- Chapter 5

The service industry accounts for more than ______ percent of all small businesses. *

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Which of the following is the most likely reason that a small-business owner may become frustrated as a franchisee? * Site selection Management training and support Reduced stress and responsibility Excessive restrictions resulting in less freedom Creating and managing national advertising

Excessive restrictions resulting in less freedom

A franchisee is an individual or organization granting a franchise. *

False

A franchisor is a person or organization purchasing a franchise. *

False

True or False Being ones own boss is a disadvantage of being a small business owner. *

False

True or False Long hours and hard work is one advantage of being a small business owner. *

False

True or False Small businesses are not very important to the U.S. economy. *

False

All of the following are key ingredients to the survival of small businesses except. * Capital Management Marketing Planning

Marketing

According to the U.S. Office of Management and Budget, __________ of the major technological advances of the 20th century originated with individual inventors and small companies. *

More than half

A franchise is a license to operate an individually owned business as if it were part of a chain of outlets or stores. *

True

Dual-branded franchises occur when two franchisors offer their products together; this is becoming a new small-business trend. *

True

One advantage of franchising is the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others. *

True

The main disadvantage of franchising affects the franchisee, and it arises because the franchisor retains a great deal of control. *

True

True of False Entrepreneurial spirit is the desire to create a new business. *

True

True or False A small business is independently owned and operated for profit and is not dominant in its field. *

True

True or False Building personal relationships with employees and customers is one advantage of being a small business owner. *

True

True or False Small businesses should make time for social media. *

True

Venture capital is money that is invested in small firms that have the potential to become very successful. *

True

A franchisee acquires rights to all of the following, except: * methods of operation of the business. national advertising by the franchise. other franchisee's employees and management. a logo. a name.

other franchisee's employees and management.

Women own ______ percent of the home-based businesses in the US. *

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Small businesses should make time for social media. because it's a great way to * Make a name Communicate information Engage customers Get involved with the community All of the above

All of the above

True or False Small businesses do not help create competition with larger businesses. *

False

True or False Small businesses typically are not managed by the people who started and own them. *

False

Basic rights and obligations are delineated in a franchise agreement. Which of the following is a franchising obligation? *

Follow guidelines established by the franchisor regarding exclusive territorial rights

A _________ is a license to operate an individually owned business as if it were part of a chain of outlets or stores. *

Franchise

Which of the following is considered a shortcoming of owning a franchise? * Can start a business with limited capital National and local advertising programs Possible market saturation Guidance and advice from the franchisor Centralized buying power

Possible market saturation

The three basic purposes of a business plan include all the following except. * Profit Communication Management Planning

Profit

All the following are advantages of being a small business owner except. * Independence Risk of failure Ability to adapt to change Simplified record keeping

Risk of failure

All the following are disadvantages of being a small business owner except. * limited ability to raise capital Risk of failure Limited potential Simplified record keeping

Simplified record keeping

SBA government agency stands for *

Small Business Administration

The government agency that advises and assists small businesses by providing management and financial assistance including counseling on improving operations and assisting with obtaining debt financing is known as the _____. *

Small-business Administration (SBA)

_____ are business clinics, usually located on college campuses that provide free counseling and training for owners of small businesses. *

Small-business development centers (SBDCs)

Which of the following is a way in which the Small Business Administration provides financial assistance to small businesses? *

Small-business investment companies (SBICs)

True or False Over one-half of small businesses are home based, and 91 percent have no employees. *

True

True or False Small-business size standards are usually stated in number of employees or average annual sales. *

True

True or False The SBA provides training, education and financial assistance to small businesses. *

True

True or False a business plan is a carefully constructed guide for the person starting a business *

True

Franchises offer people starting a business the advantage of a recognized name, management assistance, and *

a greater chance for success.

Franchising allows a _____ the opportunity to set up a small business relatively quickly, and because of its association with an established brand, a _____ outlet often reaches the break-even point faster than an independent business would. *

franchisee; franchise