Chapter 6 Bus Management test

According to the Small Business Administration, a small business is an independent business with fewer than ____________________ employees.

500

Why is location important to small businesses?

Most need good foot traffic to survive, many will stay away if it's not easy to find, customers don't want to travel far (all of the above)

Of all new businesses,

about one-third are profitable, one-third do not make a profit but continue to operate, and one-third lose money

a written description of the business idea

business plan

Entrepreneurs

come from all age categories and educational backgrounds.

If you start a new business, you need information about

competitors government regulations customers

Which part of the business plan discusses short and long term goals?

description of business

Which element of a business plan discusses the entrepreneur's short- and long-term goals for the business?

description of the business

A(n) blank is someone who takes a risk in starting a business to earn a profit.

entrepreneur

Scrubbles laundry detergent has been on the market for years. The manufacturer of Scrubbles recently added a new ingredient to give the detergent extra cleaning power. This is an example of an

improvement

blank capital is money provided by large investors to finance new products and new business that have a good chance to succeed.

venture

Money provided by large investors to finance new businesses

venture capital

Money provided by large investors to finance new products/businesses is known as

venture capital

Small businesses have an advantage over big businesses when customers

want more individual attention

In the United States, women own close to this percentage of small business.

35 percent

Technically, a small business is described to have fewer than ______________________ employees.

500

More than ____________________ new businesses are created in the United States every year.

625 thousand

Why should all small business owners develop business plans even if they are not required to obtain financing?

By developing a plan, the owner is forced to think about important activities, the amount of time they will take, and their cost. The plan also serves as a guide to keep the business on track.

Name at least three sources of funding for new businesses. Which is the most important?

Start-up financing, short-term financing, long-term financing

the process of starting, organizing, and managing a business

entrepreneurship

The most successful small business owners

establish good working relationships with professionals such as bankers, lawyers, and accountants

Members of the Service Corps of Retired BLANK are retired local business people who volunteer their services to counsel and mentor new business owners.

executives

All entrepreneurship opportunities emerge from inventions and innovations.

false

Everyone who owns a business is an entrepreneur.

false

Most new business owners obtain start-up money to finance their business from banks.

false

Once a business plan is written, it should never be revised nor updated.

false

Small businesses employ only 10 percent of U.S. workers.

false

Start-up financing is money needed to pay current operating costs of the business.

false

The process of starting, organizing, managing, and assuming the responsibility for a business is called capitalism.

false

The first step in developing a business plan is to

gather and review information

What is the first step in developing a business plan?

gather and review information

Successful entrepreneurs tend to have all the following characteristics EXCEPT

hesitant

Almost all people starting small businesses have graduated from

highschool

A designed change that increases the usefulness of a product, service, or process is called

improvement

a change the increases the usefulness of a product

improvement

An _______________________ is an invention or creation that is brand new.

innovation

a brand new invention

innovation

Products a business keeps on hands is referred to as

inventory

Which of the following does NOT describe a typical small business?

it is dominant in its field

Which of the following is NOT a description of a small business?

it is dominate in its field

Which of the following is probably the LEAST important factor in becoming an entrepreneur?

living in a major U.S. city

What is the LEAST important factor in becoming an entrepreneur?

living in a major us city

Large amounts of money paid over many years is which type of financing?

long-term

The land that the business is built on is which type of financing?

long-term

The type of financing needed for the main resources that will last for many years is called

long-term financing

Small businesses account for ____________________ of the U.S. gross domestic product each year.

more than half

Location is important to small retail businesses because

most retailers need good customer traffic to survive, many potential customers will stay away if the business is not easy to findcustomers generally do not want to travel long distances to find what they need (all of the above)

How long is a business plan written for?

one year

Short-term financing is obtained for a period of less than

one year

Most of the money needed to start a new business comes from

personal and business loans

A business blank is a written description of a business idea and how it will be carried out.

plan

Which of the following would NOT be discussed in the operations plan section of a business plan?

sales forecast

Which of the following is NOT part of the operations plan section of the business plan?

sales forecasts

Financing that is obtained for less than a year is which type of financing?

short-term

Money to pay for current operating costs of the business is which type of financing?

short-term

The type of financing needed for CURRENT operating activities is called

short-term financing

The federal agency that helps small business owners obtain financing and other support is known as

small business administration

Money used to open the business is which type of financing?

start-up

Purchase of the equipment to open a business is which type of financing?

start-up

The license to operate a business uses which type of financing?

start-up

A business plan includes a description of the strengths and weakness of competitors.

true

An entrepreneur is someone who takes a risk by starting his or her own business.

true

If the business owner needs help from others, especially for financing the new business, a business plan usually will be required.

true

In the U.S., nearly as many small businesses close as begin each year.

true

In the United States, nearly as many small businesses close as begin each year.

true

It is easier for a small business to meet the precise needs of customers than a large business.

true

Many small businesses fail simply due to their location.

true

One of the main reasons that businesses started by entrepreneurs fail is inadequate capital.

true

Successful entrepreneurs have many personal characteristics in common.

true

The most important step in starting a business is preparation.

true

U.S. businesses with just a single owner and no staff account for more than $990 billion in annual sales.

true

Small business owners

typically focus on products and services that meet the needs of a large group of customers.