business ch.6

Small businesses create about __________ percent of the new jobs in the United States.

65%

Online businesses avoid the risk of failure faced by traditional start-up businesses. True or False

False

Which of the following explains why individuals accept the risks of business ownership? A. The potential for learning how to be self-disciplined B. The sense of self-satisfaction and independence C. The challenge of seeking power D. The desire to work fewer hours

B. The sense of self-satisfaction and independence

A review of small business successes and failures indicates that the _____________. A. businesses that are easiest to start offer the greatest potential for long-term growth and profits. B. restaurant industry offers the least risk for entrepreneurs. C. businesses with the potential for high-profit levels tend to be difficult to start and hard to keep going. D. reason the service sector is rapidly growing is that these firms are easy to start and keep going, and offer high levels of security and growth potential.

C. businesses with the potential for high profit levels tend to be difficult to start and hard to keep going.

Most entrepreneurs prefer working for someone else. True or False

False

Successful entrepreneurs are exclusively motivated by the desire to become rich. True or False

False

Entrepreneurship involves accepting the risk of starting and running a business. True or False

True

If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques. True or False

True

Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are. True or False

True

The SBA (Small Business Association) may guarantee loans made by a financial institution and repay them if the borrowers stop making payments. True or False

True

Entrepreneurs seeking financial support from bankers and potential investors should create a _________________ to help the bankers and investors understand why this business will succeed.

detailed business plan

One of the hurdles small businesses face when deciding to export is ___________.

financing is often difficult to find.

After personal savings, the next largest source of capital for entrepreneurs is from ____________.

friends and family.

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their _________________.

integrity and sound business ideas.

A __________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

market

Business incubators are usually government-funded facilities intended to _________.

offer start-up firms low-cost office space and basic business services.

Two key management functions that need particular attention when starting a business are ______________.

planning and financing.

Due to the credit crunch that developed during the Great Recession, many small businesses found that __________ were more willing to lend money to smaller operations.

smaller, community banks

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called:

the Service Corps of Retired Executives (SCORE).

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on ___________.

the value of what the business owns, what it earns, and what makes it unique.