Introduction to Business

When writing a business plan, it is important to?

-Analyze the competition -Calculate how much money you need to start

When starting a small business, government agencies such as the Small Business Administration (SBA), the Farmers Home Administration, the Economic Development Authority, and the Minority Business Development Agency are possible sources of?

-Capital -Information

A good business plan is between 25 and 50 pages long and takes many months to write. A comprehensive business plan will include which of the following?

-Executive summary -Company background -cover letter

What are some of the factors that could be associated with small-business success?

-Managerial competence -Adequate financial planning

Is it possible to get started in business by working in a successful one to learn about it and then?

-Offering to buy out the owner over time -Suggesting the owner take a partial retirement so you can gradually take over -Buying out the current owner all at once

Micropreneurs are willing to accept the risk of starting and managing a business that?

-Offers them a balanced lifestyle -Lets them do the kind of work they want to do -remains small

A small business is defined as?

-One that meets certain standards in terms of employees or receipts -One that is independently owned and operated -One that is not dominant in its field

Which of the following regarding high-growth businesses (e.g., technology firms) are true?

-They are extremely difficult to keep going -They are difficult to start

Which of the following regarding entrepreneurs are true?

-They are thoroughly comfortable being their own boss -They are self-disciplined

An inexpensive marketing research study may help you determine which of the following?

-Whom to select as your target market -What is an effective strategy for reaching your target market -Where to locate

Among the hurdles small businesses must overcome in starting to operate globally are?

-bureaucratic paperwork -understanding cultural differences -difficulty finding financing

Entrepreneurs must recognize that they need competent and motivated employees. Since they can't compete with larger firms' pay and benefits, they need to?

-delegate more often -be respectful of employees' opinions -provide more challenging opportunities to learn

Most entrepreneurs get ideas for products and services?

-from asking questions -from looking around

Community Development Financial Institutions (CDFI) have been successful because they?

-maintained financial discipline other lenders lack -provide counseling on improving cash flow -offer counseling on marketing strategies

Some common causes of small business failure include?

-underpricing or overpricing goods or services -no experience in that business or industry -starting with too little capital

Small companies started by entrepreneurs may grow into large corporations that employ thousands of people. Match the entrepreneurs below with the corporations they developed.

1. Amazon.com = Jeff Bezos 2. Avon = David McConnell 3. Kodak = George Eastman 4. Facebook = Mark Zuckerberg 5. Starbucks = Howard Schultz

Match the goals with the type of business person

1. Entrepreneur-Desire to grow the business and generate wealth 2. Micropreneur-Desire to remain small and balance lifestyle with work

Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told should include?

1. to hire a good lawyer and accountant 2. starting with enough money 3. that finding and retaining good workers is hard

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are?

A market

A(n) ________________ is hired to assist the owner of a small business while gathering experience

Apprentice

The executive summary is the part of the ______________ plan that consists of a two-or three-page management summary of the proposed venture, including a short description of the business, and discusses major goals and objectives

Business

A(n) _____________ is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s).

Business plan

Adam hopes to show the bank lending manager he is meeting with that he is aware of who the target market is, who the competition is, how much money he needs, and exactly how he intends to turn a profit by supplying him with a(n)?

Business plan

How did the 1990 Immigration Act encourage entrepreneurs to relocate to the United States?

By creating a category of investor visas

How do intrapreneurs launch products and generate new profits?

By using the company's existing resources

Entrepreneurs should be willing to take _______________ risks

Calculated

Which section of the comprehensive business plan indicates the amount of capital needed to commence or continue operations, and describe how these funds are to be used?

Capital required

Which part of the business plan summarizes the most attractive points of your project in as few words as possible?

Cover letter

_______________ zones are specific geographic areas to which governments attract private business investment by offering lower taxes and other government support

Enterprise

A(n) _________________ is someone accepting the risk of starting and running a business

Entrepreneur

Being self-directed, self-nurturing, action-oriented, and tolerant of uncertainty are all considered characteristics of a(n)?

Entrepreneur

____________________ must be emotionally, mentally, and physically able to work long and hard. However, they mostly seek achievement rather than power and are self-motivated.

Entrepreneurs

There are many good reasons for going global. Which of the following are examples of such reasons?

Exporting can absorb excess inventory Exporting can extend product life

If you want to be both independent and rich, you need to pursue a business with high?

Growth

Many people today who need to combine work and family are starting ________________-________________ businesses

Home-based

The expansion and development of the internet has sprouted a world of small web-based businesses. This, among other reasons, may explain why online sales are rapidly?

Increasing

Chase has a great idea for a new business, but lacks the funds needed to pay rent and hire a part-time accountant and lawyer. Accordingly, he decides to locate his offices temporarily in a business _________________ where he can receive accounting, legal, and secretarial help at little cost to him.

Incubator

__________________ are creative people who work as entrepreneurs within corporations

Intrapreneurs

Which of the following are indications a business idea is a good opportunity?

It fits customers' needs You can sell the product at a price customers will pay and still make a profit

Which of the following are some challenges of running a home-based business?

Keeping work and family tasks separate Managing time

The Small Business Administration (SBA) is the U.S. government agency that advises and assists small businesses by?

Providing: -Financial advice -loans -management training

__________________ businesses are businesses that are independently owned and operated, are not dominant in their field of operation, and meet certain standards of size in terms of employees or annual receipts

Small

The program through which private investment companies licensed by the Small Business Administration lend money to small businesses is called the?

Small Business Investment Company (SBIC)

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts is a(n)?

Small business

Taking over a(n) __________________ business is a good way to get started in business

Successful

Entrepreneurial _____________________ may be better suited to run a business than individual entrepreneurs because members can combine creative from the start and it may ensure cooperation and coordination later among functions in the business.

Team

Which of the following is true regarding businesses with low failure rates, such as veterinary services, dental practices, and medical practices?

They often require advanced training to start They do not tend to require much growth

Which of the following characteristics are needed to become a successful entrepreneur?

Tolerant of uncertainty Initiative Action-oriented

True or False: The principles of management are similar for a small neighborhood business and a giant global firm.

True

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. They spent a few months writing a business plan, when then they presented to a bank. Daniel?

Understands the steps needed to start a small business

David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how?

apprenticeships can benefit both the business owner and the apprentice

Working in a successful business is a good way to learn the operations and could?

be a step in buying out the owner

One of the most difficult tasks is mixing money for a start-up. To raise money, entrepreneurs talk with bankers and other potential investors, and try to sell their ideas. In order to have a chance, most of the time, entrepreneurs have to present a(n)?

business plan

The ______________ section of a business plan describes company operations to date (if any), potential legal consideration, and areas of risk and opportunity. This portion also summarizes the firm's financial condition, and includes past and current balance sheets, income and cash flow statements

company background

A(n) _________________ term is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product

entrepreneurial team

If you want to start a business, you cannot be afraid to fail. Many well-known __________________ failed several times before achieving success. This is why these people are considered to be tolerant of uncertainty.

entrepreneurs

Many ___________________ use their time, money, and energy to turn their passions into sustainable businesses. They are comfortable being their own bosses and are not afraid of failure.

entrepreneurs

______________________ help the country prosper by taking risks and creating thousands of jobs that generate wealth and strengthen the economy

entrepreneurs

A good business plan takes a lot of time to write, but you have only a few minutes to convince readers not to throw it away. This is why your _______________ summary is very important.

executive

Managing a small business became relatively easy with the advent of inexpensive personal computers, inexpensive computer systems and off-the-shelf or even free, open-source software make it easy for the small business manager to?

follow the daily sales and expenses manage customer records

John started his small business with only a few employees, but in a few years had twice as many. The community around his business also flourished, partly helped by the new stream of money. This exemplifies?

how small businesses influence the economy

According to a recent study, offering low-cost offices with basic services to new businesses in the early stages of development results in an 87 % success rate of ____________________ graduates

incubator *Incubators offer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help.

The SBA determines whether a business is considered "small" only after analyzing how a particular business measures up compared to other businesses in its?

industry

For launching and operating a small business, what resources are often available through colleges and universities?

interns business professors master of business administration students

The part of a business plan that includes an organization chart, job descriptions of listed positions, and detailed resumes of the current and proposed executives is called the ______________ _____________ section.

management team

The section of a business plan that describes minimum plant size, machinery required, production capacity, inventory and inventory-control methods, quality control, and plant personnel requirements is called the?

manufacturing plan

Started by the Small Business Administration in 1991, the ______________ program provides very small loans (up to $50,000) and technical assistance to small-business owners.

microloan

Managers address many activities including planning, financing, marketing, human resource development, and record keeping. Of these functions, which two are of a primary concern when starting a business?

planning and financing

The SBA microloan program awards loans based on belief in the borrowers' integrity and?

the soundness of their business idea

Phil invests in new businesses in exchange for partial ownership in those business. Phil is a(n)?

venture capitalist

Which section of a business plan provides a comprehensive demographic analysis of consumers in the area of the proposed business as well as a traffic-pattern analysis and vehicular and pedestrian counts?

Location Analysis

At what point is it most important to make your marketing decisions?

Long before you introduce a product or open a store

Within the comprehensive business plan, the ________________ plan outlines sales, advertising, promotion, and public relations programs. This section also compares prices to competitors and forecasts sales in dollars and units.

Marketing

Almed is the owner of a small U.S. store manufacturing business. He knows he could export some of his shoes, but he does not know if they fit other markets. Also, he cannot afford to hire an international trade expert. What does this situation demonstrate?

Why many small business have difficulty engaging in global business

Venture capitalists try to safeguard their investment by taking some control over the business. What could happen if a venture capitalist takes too large a stake in your company?

You could lose control of the business

One of the greatest advantages small businesses have is the ability to know their customers better and?

adapt quickly to their needs

Becoming a(n) ________________ is one of the best ways to learn about how to run a business

apprentice

It is extremely important to develop a(n) ________________ __________________ before going to a bank for a loan, because it shows that you are aware of who the target market is, who the competition is, how much money you need, and exactly how you intend to turn a profit

Business plan

The most important things investors want to know are what makes the product more desirable than what's already available and whether or not the product can be patented. In which section of the business plan should investors look to find this information?

Marketing plan

___________________ do not have the goal of growing their businesses into large corporations but rather desire to maintain a balanced lifestyle while doing the kind of work they want to do. Most commonly these people own home or web-based businesses.

Micropreneurs

The advantages small firms have over large firms include more personal customer service and the ability to respond quickly to?

Opportunities

A self-Employment Assistance Program (SBA) offered by some states is designed to?

pay unemployment benefits while building a business and provide training and counseling to the new business owner

A necessary and invaluable aid to entrepreneurs is a competent, experienced _________________ who knows and understands small business. This person can help with leases, contracts, partnership agreements, and protection against liabilities.

Lawyer

In high school Li was captain of the woman's basketball team, student council president, and on the debate team. Fresh out of college, Li wants to start her own business. By looking at Li's characteristics, what can one conclude?

Li has some of the characteristics of an entrepreneur

There are many advantages small businesses have when engaging in international trade. Which of the following are examples of such advantages?

-Overseas buyers often enjoy dealing with individuals rather than with large corporate bureaucracies -Small companies can give customers personal service and undivided attention

The phrase "poor management" covers a number of faults. Those faults include?

-Poor employee relations -Poor planning

Select reasons why people become entrepreneurs

-Profit -Independence -Opportunity