Intro to Business - Ch. 5

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

75 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 percent

Which three are considered equity financing?

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

A business plan outlines which two of the following?

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

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

______ 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

_____ 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

Which of the following are common, primary reasons that small businesses fail? (Check all that apply.)

Undercapitalization Managerial inexperience Inability to cope with growth

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

Wholesalers

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

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

bartering

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

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

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 ____.

direct selling

A(n) _____ is someone who risks his or her wealth, time, and effort to develop a product or service for profit.

entrepreneur

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

Sara has decided that she is ready to start the small formal wear shoes store that she's dreamed about for years. She is also aware that approximately half of all new startup firms fail within the first _____ years.

five

The company that sells a franchise is called the ______.

franchiser

Which functions are most typical of a wholesaler?

planning and negotiating for supplies promoting distributing

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

reputation

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

retailers

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

service

Javier's Jalapeno hut is 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

Pranav would be a direct seller if he ____.

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

trade credit

When two businesses engage in bartering they ______.

trade products that they make with each other

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

Which of the following are concerns of small business owners that can contribute toward high stress levels?

worries about competition employee problems changing market demand

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

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

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

Entrepreneurship

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

False

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

Retailing

Which of the following are considered debt financing?

SBA loan Trade credit Line of credit

Which two of the following are volunteer agencies funded by the SBA to provide advice for owners of small firms.

SCORE ACE

Which of the following is TRUE regarding flexibility and small business ownership?

Small business owners can make and execute decision quickly

Which two statements are true about the role of small business in the U.S. economy?

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

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

The franchisee

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

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

All of the following are characteristic of a small business EXCEPT ______.

it carries only one product line

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

less

A small business makes goods and customizes its products 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 chile salsa for customers in New Mexico. Juanita is a small business that is also a ______.

manufacturer

Jim is working on starting his own small business catering to the nutritional needs of large, mature dogs that live in tiny, inner-city spaces without opportunity for exercise. His small, specific group of customers is his ______.

market niche

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