Intro to Business Chapter 6

Of all new businesses, a. about one-third are profitable, one-third do not make a profit but continue to operate, and one-third lose money. b. about one-half are profitable, one-quarter do not make a profit but continue to operate, and one-quarter lose money. c. about three-quarters are profitable and one-quarter lose money. d. about one-quarter are profitable and three-quarters lose money.

A. about 1/3 are profitable, 1/3 do not make a profit but continue to operate, and 1/3 lost money

The most successful small business owners a. establish good working relationships with professionals such as bankers, lawyers, and accountants. b. have never worked for anyone else before. c. do not need to choose employees carefully because they will be the ones giving orders. d. understand that a written business plan is a waste of time and money.

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

Which of the following is probably the LEAST important factor in becoming an entrepreneur? a. living in a major U.S. city b. having special skills and abilities c. having a real desire to be your own boss d. developing a good initial business plan

A. living in a major U.S. city

Small business owners a. usually get direct information from their customers about what they like and dislike. b. have less frequent contact with their customers than large businesses. c. rely heavily on consumer research to gather information. d. typically focus on products and services that meet the needs of a large group of customers.

A. usually get direct information from their customers about what they like and dislike

the Small Business ___ is a U.S. government agency that helps small business owners obtain financing and other support for their companies

Administration

In the United States, women own this percentage of small business. a. 25 percent b. 35 percent c. 50 percent d. 75 percent

B. 35%

Which of the following does NOT describe a typical small business? a. The owner is usually the manager. b. It is dominant in its field. c. It serves a small market. d. It operates in one or very few locations.

B. it is dominant in its field

Which of the following would NOT be discussed in the operations plan section of a business plan? a. organization of the company b. sales forecasts c. human resource plans d. analysis of resources needed

B. sales forecasts

Small businesses have an advantage over big businesses when customers a. are willing to buy standard products. b. want more individual attention. c. prefer low cost and efficient delivery. d. all of the above

B. want more individual attention

Which element of a business plan discusses the entrepreneur's short- and long-term goals for the business? a. financial plans b. description of the competition c. description of the business d. customer analysis

C. description of the business

Short-term financing is obtained for a period of less than a. three months. b. six months. c. one year. d. two years.

C. one year

According to the Small Business Administration, a small business is an independent business with fewer than ____ employees. a. 10 b. 50 c. 100 d. 500

D. 500

If you start a new business, you need information about a. competitors. b. government regulations. c. customers. d. all of the above

D. all of the above

Location is important to small retail businesses because a. most retailers need good customer traffic to survive. b. many potential customers will stay away if the business is not easy to find. c. customers generally do not want to travel long distances to find what they need. d. all of the above

D. all of the above

The first step in developing a business plan is to a. identify alternative plans for production and marketing. b. write the introductory section. c. develop the "game plan." d. gather and review information.

D. gather and review information

Successful entrepreneurs tend to have all of the following characteristics EXCEPT a. energetic. b. goal-oriented. c. creative. d. hesitant.

D. hesitant

Most of the money needed to start a new business comes from a. the sale of stock. b. credit given by businesses that sell products and services to the new business. c. bank loans. d. the entrepreneur and his/her family and friends.

D. the entrepreneur and his/her family and friends

an __________ is someone who takes a risk in starting a business to earn a profit

entrepreneur

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

executives

True/False: All entrepreneurship opportunities emerge from inventions and innovations.

false

True/False: Once a business plan is written, it should never be revised and should never be updated.

false

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

false

Almost all people starting small businesses have graduated from ____

high school

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

improvement

an ____ is an invention or creation that is brand new

innovation

Products or raw materials a business keeps on hand to do business are referred to as ____

inventory

__ financing is money needed for the main resources of a business that will last for many years.

long-term

Most business plans are developed for __________ year(s).

one

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

plan

The source of owner-supplied money depends on the business's ownership structure. In a(n) _______, one person will supply the money.

proprietorship

Money needed to pay for the current operating activities of a business is referred to as _________ financing.

short-term

The amount of money needed to open a business is called _________ financing.

start-up

True/False: In the United States, nearly as many small businesses close as begin each year.

true

True/False: The most popular use of business plans is to persuade lenders and investors to finance the venture.

true

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

venture