IOB Chapter 6
If the business owner needs help from others, especially for financing the new business, a business plan usually will be required.
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
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
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
The Small Business ____________________ is a U.S. government agency that helps small business owners obtain financing and other support for their companies.
administration
If you start a new business, you need information about
all of the above
Location is important to small retail businesses because
all of the above
Entrepreneurs
come from all age categories and educational backgrounds
Which of the following does NOT describe a typical small business?
it is dominant in its field
Which of the following would NOT be discussed in the operations plan section of a business plan?
sales forecasts
Most of the money needed to start a new business comes from
personal and business loans
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
Small business owners
usually get direct information from their customers about what they like and dislike
____________ capital is money provided by large investors to finance new products and new business that have a good chance to succeed
venture
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
According to the Small Business Administration, a small business is an independent business with fewer than ____________________ employees.
500
More than ____________________ new businesses are created in the United States every year.
500 thousand
All entrepreneurship opportunities emerge from inventions and innovations.
False
Everyone who owns a business is an entrepreneur.
False
Once a business plan is written, it should never be revised nor updated.
False
The process of starting, organizing, managing, and assuming the responsibility for a business is called capitalism.
False
Which element of a business plan discusses the entrepreneur's short- and long-term goals for the business?
description of the business
A(n) ____________________ is someone who takes a risk in starting a business to earn a profit.
entrepreneur
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 ____________________ are retired local businesspeople who volunteer their services to counsel and mentor new business owners.
executives
The first step in developing a business plan is to
gather and review information
Successful entrepreneurs tend to have all of the following characteristics EXCEPT
hesitant
Almost all people starting small businesses have graduated from ____________________.
high school
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
imporvement
A designed change that increases the usefulness of a product, service, or process is called a(n) ____________________.
improvement
A(n) ____________________ 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
Which of the following is probably the LEAST important factor in becoming an entrepreneur?
living in a major U.S. city
____________________ financing is money needed for the main resources of a business that will last for many years.
long-term
Small businesses account for ____________________ of the U.S. gross domestic product each year.
more than half
Most business plans are developed for ____________________ year(s).
one
Short-term financing is obtained for a period of less than
one year