ba 151: ch5 smartbook

Small firms are important as exporters representing _____ of the value of exported goods.

98

Small businesses often require ______ money to start and maintain than do larger businesses.

less

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

line of credit

What are the two components of a business plan?

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

Why is the sharing economy also referred to as the "gig economy"?

Because the independent contractors go from one job to the next

What are two advantages of buying an existing business?

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

What are three concerns of small business owners that can contribute toward high stress levels?

Changing market demand Worries about competition Employee problems

The SBA is the government agency that advises and assists small businesses by providing which three services?

Consulting on improving operations Training for owner(s) and their employees Management assistance

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 skill 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.

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

Wholesaler

Which of the following is an example of a market niche?

Young male, thrill-seekers who enjoy rock climbing

Which three sources are considered debt financing?

SBA loan trade of credit Line of credit

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

SCORE

Which two statements are accurate regarding the role of small businesses in the U.S. economy?

Small businesses employ nearly half of all private workers. More than 99 percent of U.S. firms are classified as small businesses.

Comparing the decision-making process between large and small firms, which of the following statements is accurate?

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

With regard to franchising, which party acquires the rights to the name, logo, methods of operation, national advertising, and products?

The franchisee

What are three forms of equity financing?

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

What are three forms of debt financing that Jena can obtain to start a new online training program business for counselors?

Thirty-five new laptops given in exchange for a 2% share of the business A bank loan in the amount of $10,000 A $15,000 SBA loan

What are three primary reasons that small businesses fail?

Undercapitalization Managerial inexperience

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 _______. Multiple choice question.

independence

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

intraprenueer

______ 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.

intraprenuers

Flexibility for the small business owner means that ______.

it can more easily adapt to changing market demands

Half of all small businesses fail within the first ______.

5 years

he baby boomer generation is very important to small business due to its large size of approximately ______ Americans.

75 MILL

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

80 percent

Which three functions are most typical of a wholesaler?

Distributing Promoting Planning and negotiating for supplies

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

Entrepreneurship

A retail business would be especially attractive to an entrepreneur for what two reasons?

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

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 describes which disadvantage of small businesses?

Managerial incompetence

Small firms can develop _____ by providing quality products and excellent service.

a good reputation

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

are relatively easy to enter

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

Pete is a contractor and David is a landscaper. Pete offers to build a storage shed for David's equipment if David will take care of Pete's lawn for the season. This is an example of ______.

bartering

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

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. (Enter one word in the blank.)

credit

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

debt

Nadia has decided to start a business selling her handmade jewelry. To start out, she is hosting "parties" in the homes of her friends and family. At the parties, Nadia can display her jewelry and directly interact with potential customers. This is an example of Blank______.

direct selling

Ming Lee got frustrated every time she tried to find a spice jar in her spice cabinet. She came up with a unique way to organize spices and is now investing her money and time developing the product to be sold to others. Ming Lee would be classified as a(n) ______.

entreprenuer

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

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

false

Technological advances and an increase in service exports have made it more difficult for small companies to expand their operations abroad. True false question.

false

When starting a new business, an entrepreneur only needs enough cash to get the business up and running since cash generated from sales will bring money in to keep the business running.

false

Tony is interested in starting a Subway sandwich shop in the Pearl district of Portland, Oregon. The license to sell another's products or use another's name in business (in this case Subway) is referred to as _____.

franchise

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

high stress levels

A small business makes high-end backpacks and purses and customizes them to meet specific customer needs and wants. This business is a ______

manufacturer

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 chili salsa for customers in New Mexico. Juanita is a small business that is also a ______. Multiple choice question.

manufucturer

What are three typical businesses found in the service sector?

realeastate barbershop accounting firms

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

reputation

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

retailers

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

retailing

Companies like Uber or Lyft are part of the ______.

sharing economy

Javier's Jalapeno hut is the newest taco stand on campus. Javier is the owner and he employs two students to work part-time. In terms of its size, the Jalapeno hut would be considered a ______ business.

small

While The Fresh Burger Hut does not dominate in the fast food market, it is successful. The independently-owned company employs 155 people and operates six restaurants in Pennsylvania. The Fresh Burger Hut would be classified as

small business

Sanjay would be a direct seller if he Blank______. Multiple choice question.

sold his products through face-to-face sales presentations

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

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

trade credit

___ 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

When two businesses engage in bartering they ______.

trade products that they make with each other

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

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

undercapitalization

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 capitalist

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

All of the following are typically true of acquiring an existing business EXCEPT ______.

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