Business Integration Ch. 5

A _______________ is someone who risks his or her wealth, time, and effort to develop a product or service for profit. Multiple choice question.

entrepreneur

The baby boomer generation is very important to small business due to its large size of approximately ________________ Americans

70 million

Excluding farmworkers, the service sector accounts for what percentage of jobs in the United States?

80 percent

Small firms represent ________________% of the U.S. exporters of goods.

98%

Born between 1946 and 1964, ________________ is/are relatively wealthy. Many small businesses do not actively pursue this group but many experts believe it to be the market of the future.

Baby Boomers

Daniel wanted to start his own small business. After spending his own money on marketing research, Daniel asked his friend Chase to be his accountant since he was lacking skills in that area. They spent a few months writing a business plan, which then they presented to a bank to obtain funding. What does this example illustrate?

Daniel understands the steps needed to start a small business.

_______________ is the process of creating and managing a business to achieve desired objectives.

Entrepreneurship

Rarely, if ever, does an owner of a new, startup business invest his or her own money in the venture. T/F

False

True or false: Technological advances and an increase in service exports have created additional challenges for small companies to expand their operations abroad.

False

________________ use a company's existing resources to launch new products and generate new profits. They are the creative people who work as entrepreneurs within corporations.

Intrapreneurs

What are two reasons that a retail business would be especially attractive to an entrepreneur? (multiple select question) It is a field that is relatively easy to enter. It is a field that doesn't take any special skill or knowledge. It is an underrepresented industry. It requires low initial financing.

It is a field that is relatively easy to enter. It requires low initial financing.

Which of the following are considered debt financing? (multiple select question) SBA loan personal savings line of credit trade credit

SBA loan line of credit trade credit

Which agency is comprised of retired executives willing to provide advice and knowledge to owners of small firms? Multiple choice question.

SCORE - Service Core of Retired Executives

What are two volunteer agencies funded by the SBA to provide advice for owners of small firms? (multiple select question) FDIC ACE SCORE BBB

Service Core of Retired Executives (SCORE) Active Corps of Executives (ACE)

Comparing the decision-making process between large and small firms, which of the following statements is true? Large businesses can most rapidly respond to the decisions of the organization. Small businesses often have multiple management layers that make decision making a slow process. Large businesses usually have just one layer of management and thus can speed decision making in the organization. Small businesses usually have only one layer of management that helps speed decision making.

Small businesses usually have only one layer of management that helps speed decision making.

Which of the following are forms of debt financing for Jena who is starting a new online training program business for counselors? (Select all that apply.) using her personal savings of $20,000 a $15,000 SBA loan a $10,000 loan from her local bank exchanging computers, printers, and other technology for a share of the business

a $15,000 SBA loan a $10,000 loan from her local bank exchanging computers, printers, and other technology for a share of the business

_______________ is when suppliers allow a business to take possession of needed goods and pay for them at a later date or in installments.

Trade credit

True or false: In order to save the expense of maintaining various departments, small-business owners may hire other firms to supply services on an as-needed basis.

True

_______________ supply products to industrial, retail, and institutional users for resale or for use in making other products.

Wholesalers

Which of the following are forms of debt financing for Jena who is starting a new online training program business for counselors? (Select all that apply.) a $15,000 SBA loan a $10,000 loan from her local bank exchanging computers, printers, and other technology for a share of the business using her personal savings of $20,000

a $15,000 SBA loan a $10,000 loan from her local bank exchanging computers, printers, and other technology for a share of the business

A small firm can develop ________________ if it provides quality products and excellent service.

a good reputation

An agreement by which a financial institution promises to lend a business a predetermined sum on demand is called _______________.

a line of credit

Which three items are considered equity financing? a personal laptop the accumulated value in a life-insurance policy a Small Business Administration loan financial support from a bank in the form of a loan the savings account of the owner

a personal laptop the accumulated value in a life-insurance policy the savings account of the owner

A business plan outlines which two of the following? a detailed description of how the business will be dissolved, should it fail a precise statement of the rationale for the business a step-by-step description of how the business' product will be produced a step-by-step explanation of how the business will achieve its goals

a precise statement of the rationale for the business a step-by-step explanation of how the business will achieve its goals

A would-be entrepreneur might choose retailing, services, and high technology industries to start their businesses because these fields _______________.

are relatively easy to enter

For a small-business entrepreneur, independence refers to?

being your own boss

A _______________ is a precise statement of the rationale for the business and a step-by-step explanation of how it will achieve its goals.

business plan

Angela saved $20,000 and acquired another $20,000 as a short-term loan from her parents to start a kid-friendly coffee shop. The $40,000 that Angela is ready to invest in this new venture is known as _______________.

capital

Which three are personal resources an owner might utilize as sources of funds for his or her business? cash value of the owner's life insurance policy a line of credit obtained from a bank money in the owner's savings account money obtained by the Small Business Administration equity value in the owner's home

cash value of the owner's life insurance policy money in the owner's savings account equity value in the owner's home

In order to take quick advantage of opportunities that require external funding, a business owner who is short on cash may get a line of _______________ from a bank or other financial institution.

credit

Financial assistance by the Small Business Administration (SBA) for a new startup company is a form of ________________ financing.

debt

Which of the following are concerns of small-business owners that can contribute toward high-stress levels? employee problems worries about competition concerns about being too independent having too much flexibility changing market demand

employee problems worries about competition changing market demand

Trey has $25,000 in savings, two new laptops, two laser printers, and a variety of quality office furniture that he's using to start his new Internet auction startup business. This array of assets brought into a company is known as _______________ financing because Trey is using real personal assets rather than borrowing funds from outside sources.

equity

Half of all new companies fail within the first _______________.

five years

The company that sells a franchise is called the ________________.

franchiser

A small-business owner must deal with ongoing worries about competition, employee problems, rent increases, or changing market demand. All of these are contributing factors to which disadvantage of small-business ownership?

high stress levels

Being able to be your own boss is one of the leading reasons that entrepreneurs choose to go into business for themselves. This advantage of small-business ownership is referred to as:

independence

A small business makes goods and customizes its products to meet specific customer needs and wants. This business is a ________________.

manufacturer

Creative people who work as entrepreneurs within corporations are known as ________________.

intrapreneurs

Flexibility for the small-business owner means that ________________.

it can more easily adapt to changing market demands

Small businesses often require ________________ money to start and maintain than do larger businesses. Multiple choice question.

less

Which of the following are considered debt financing? line of credit personal savings trade credit SBA loan

line of credit trade credit SBA loan

What are the two top sources of financing for small businesses? loans from family members personal savings government grants bank loans

loans from family members personal savings

An entrepreneur that is interested in non-store retailing as a business opportunity should know that the cost to enter this type of business is _______________.

low

Just because an entrepreneur has a brilliant vision for a small business does not mean that person has the knowledge or experience to manage a growing business effectively. This is described as _______________.

managerial incompetence

Juanita makes organic salsa that she sells directly to stores around the country. She customizes the salsa to her customers' tastes. For example, she makes peach salsa for her customers in Georgia and green chile salsa for customers in New Mexico. Juanita is a small business woman who is also a _______________.

manufacturer

Undercapitalization essentially means that without sufficient _______________, even the best small-business idea in the world will fail.

money/capital/funding/funds

While large corporations must compete for large market segments, small firms can focus their efforts on a precisely defined group of customers known as a market _______________, which allows them to satisfy a need that other companies have not addressed.

niche

Direct marketing and direct selling are two forms of _______________.

nonstore retailing

Which functions are most typical of a wholesaler? (multiple select question) planning and negotiating for supplies selling to end consumers manufacturing distributing promoting

planning and negotiating for supplies distributing promoting

What are typical businesses found in the service sector? (Select all that apply.) (multiple select question) real-estate agencies drugstores independent music stores accounting firms barbershops

real-estate agencies accounting firms barbershops

Advantages of buying an existing business include which of the following? (Select as many as apply.) (multiple select question) entrepreneur takes on any problems the business already has reduces some of the guesswork inherent in starting a new business from ground up a guarantee of steady profits from the start of ownership built-in network of customers, suppliers, and distributors

reduces some of the guesswork inherent in starting a new business from ground up built-in network of customers, suppliers, and distributors

How a firm is perceived by its various stakeholders is its _______________.

reputation

Restaurants, boutiques, and hardware stores are examples of _______________.

retailers

Which industry is characterized by the acquiring of goods from producers or wholesalers and then selling them to consumers?

retailing

The ________________ sector includes real estate, barbershops, banks, and computer repair shops.

service

Companies like Uber or Lyft are part of the _______________.

sharing economy

In a(n) _______________ economy, entrepreneurs earn income by renting out an underutilized resource such as lodging or vehicles.

sharing/gig

Businesses that are independently owned and operated, not dominant in their field of operation, and meet certain standards of size in regard to the number of employees are referred to as _______________ businesses.

small

Javier's Jalapeno hut is the newest taco stand on campus. Javier is the owner and he employs two students to work part-time. Javier's Jalapeno hut would be considered a _______________ business.

small

More than 99 percent of all U.S. firms are classified as _______________.

small businesses

Due to changes in communication and advancements in ________________ (such as cell phones, the Internet, and social media), small companies can better customize their services quickly for international customers.

technology

With regards to franchising, who acquires the rights to the name, logo, methods of operation, national advertising, and products?

the franchisee

The most important source of funds for any new business comes from _______________.

the owner of the business

Which three items are considered equity financing? (multiple select question) the savings account of the owner a Small Business Administration loan a personal laptop financial support from a bank in the form of a loan the accumulated value in a life-insurance policy

the savings account of the owner a personal laptop the accumulated value in a life-insurance policy

When Jim obtains needed computer maintenance services from a supplier who agrees to receive payment for those services within two months, Jim is obtaining _______________.

trade credit

Angelo was all set to start his new business. Although he did not have as much cash as he would have liked, he figured that once the business got going, the cash generated from sales would keep the business running. He was surprised, however, that sales weren't as strong as he thought and now he is cash-strapped. Angelo is experiencing a common problem known as _______________.

undercapitalization

The lack of funds to operate a business in a normal and potentially successful manner is known as _______________.

undercapitalization

People or organizations that agree to help fund a business provided they receive an ownership interest or stock in a firm are called _______________.

venture capitalists

The popular TV show Shark Tank features wealthy individuals looking to part with some of their money in order to help others start a new business. In return for giving these would-be business owners money, the investors will receive part ownership in their business. These investors are called _______________.

venture capitalists

All of the following are typically true of acquiring an existing business except _______________. some guesswork will be eliminated as the business is already up and running you are free from the existing problems of the previous owner, if any you most likely will acquire a built-in network of customers you will most likely acquire the existing network of suppliers

you are free from the existing problems of the previous owner, if any

Which example describes a market niche? all the potential competitors for sport utility vehicles choosing one form of promotion from all the available options young male, thrill-seekers who enjoy rock climbing the seven restaurants that serve a downtown shopping district

young male, thrill-seekers who enjoy rock climbing