Introduction to Business – Small Businesses Test – Flashcards
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True or False: the process of starting, organizing, managing, and assuming the responsibility for a business is called capitalism
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False
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True or False: Everyone who owns a business is an entrepreneur.
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False
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True or False: In the United States, nearly as many small businesses close as begin each year.
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True
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True or False: U.S. businesses with just a single owner and no staff account for over $600 billion in annual sales.
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True
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True or False: It is easier for a small business to meet the precise needs of customers than a large business.
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True
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True or False: Many small businesses fail simply because they are not located in the right spot.
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True
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True or False: The most important step in starting a business is preparation.
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True
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True or False: Once a business plan is written, it should never be revised and should never be updated.
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False
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True or False: The most popular use of business plans is to persuade lenders and investors to finance the venture.
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True
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Which of the following is probably the LEAST important factor in becoming an entrepreneur?
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living in a major US city
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In the United States, women own this percentage of small business.
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35%
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Successful entrepreneurs tend to have all of the following characteristics EXCEPT
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hesistant
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Entrepreneurs
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come from all age categories and educational backgrounds
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About how many new businesses are created in the United States every year?
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625,000
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Most of the money needed to start a new business comes from
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the entrepreneur and his or her family friends
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Small businesses account for ____ of the U.S. gross domestic product each year.
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more than half
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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
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improvement
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Of all new businesses,
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about 1/3 are profitable, 1/3 do not make a profit but continue to operate, 1/3 loses money
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According to the Small Business Administration, a small business is an independent business with fewer than ____ employees.
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500
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Which of the following does NOT describe a typical small business?
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It is dominant in its field
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Small business owners
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usually get direct information from their customers about what they like and dislike
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Small businesses have an advantage over big businesses when customers
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want more individual attention
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Location is important to small retail businesses because
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-most retailers need good customer traffic to survive -many potential customers will stay away if the business is not easy to find -customers generally do not want to travel long distances to find what they need
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The most successful small business owners
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establish good working relationships with professionals such as bankers, lawyers, and accountants
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Which element of a business plan discusses the entrepreneur's short- and long-term goals for the business?
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description of the business
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Which of the following would NOT be discussed in the operations plan section of a business plan?
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sales forecast
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If you start a new business, you need information about
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competitors, government regulations, and customers
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The first step in developing a business plan is to
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gather and review information
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Short-term financing is obtained for a period of less than
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one year
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A(n) ____________________ is someone who takes a risk in starting a business to earn a profit.
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entrepreneur
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____________________ capital is money provided by large investors to finance new products and new business that have a good chance to succeed.
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venture
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A(n) ____________________ is an invention or creation that is brand new.
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innovation
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A designed change that increases the usefulness of a product, service, or process is called a(n) ____________________.
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improvement
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Almost all people starting small businesses have graduated from ____________________.
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high school
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The Small Business ____________________ is a U.S. government agency that helps small business owners obtain financing and other support for their companies.
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administration
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Members of the Service Corps of Retired ____________________ are retired local businesspeople who volunteer their services to counsel and mentor new business owners.
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executives
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A business ____________________ is a written description of a business idea and how it will be carried out.
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plan
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Most business plans are developed for ____________________ year(s).
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one
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The amount of money needed to open a business is called ____________________ financing.
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start-up
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Products or raw materials a business keeps on hand to do business are referred to as ____________________.
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inventory
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Money needed to pay for the current operating activities of a business is referred to as ____________________ financing.
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short-term
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The source of owner-supplied money depends on the business's ownership structure. In a(n) ____________________, one person will supply the money.
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proprietorship
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____________________ financing is money needed for the main resources of a business that will last for many years.
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long-term
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Name at least three sources of funding for new businesses. Which is the most important?
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Most of the money needed to start a new business comes from the entrepreneur and his or her family and friends. This is the most important source of small business funding. Other funding sources for new businesses include venture capital, loans from banks and other financial institutions, and credit given by businesses that sell products and services to the new business.
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Why should all small business owners develop business plans even if they are not required to obtain financing?
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By developing a business plan, the owner is forced to think about important activities, the amount of time they will take, and their cost. This process may identify potential problems. The plan also serves as a guide to keep the business on track.
