Flashcards and Answers – Understanding Business Chapter 6
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Randy works as an entrepreneur. He owns an auto body shop. He recognized that his trade is not easily mass produced. This is:..
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a factor which increases the chances his small business will succeed.
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Having a product that is not easily mass produced is considered to be a factor which ____ the chances of success for small businesses
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increases
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Entrepreneurial attributes include: 3pts
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action-oriented; highly energetic; tolerant of uncertainty
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Characteristics of an intrapreneur: 3pts
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someone who uses company's resources to launch new products; a creative person who works within a corporations; he or she generates profits by leveraging a firm's human financial and physical resources
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two common reasons for small-business failure:
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managerial incompetence and inadequate financial planning
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Wayne is starting a small business, but needs help with management training and financial advice and loans. He should contact the ________
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SBA - Small Business Administration
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A business plan is a detailed written statement that describes: 2pts
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the resources and qualifications of its owner(s); the target market
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What are centers that offer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help?
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business incubators
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Phil invests in new businesses in exchange for partial ownership in those businesses. Phil is a ....
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venture capitalist
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What are some examples that prevent small businesses from engaging in the global market? 2pts
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would-be exporters do not know how to get started; financing is often difficult to find
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Planning, financing and keeping good business records as well as knowing customers and ____ employees are what it takes to start and run a small business
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managing
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Managers address many activities including planning, financing, marketing, human resource development, and record keeping. Of these functions, which two are of primary concern when starting a business?
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planning and financing
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A good business plan includes: 10pts
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Cover letter; executive summary; company background; management team; financial plan; capital required; marketing plan; location analysis; manufacturing plan; appendix
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A good business plan is between __ - __ pages long and takes at least _ months to write.
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25-50; 6
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A comprehensive business plan will include which (more than one) of the following - financial plan; executive summary; bank analysis; list of competitors; marketing plan
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financial plan; executive summary; marketing plan
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Taking over a _____ business is a good way to get started in business
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successful
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Affiliate marketing involves an Internet-based marketing strategy in which a business:
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rewards individuals for each customer the agent sends to its website
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How do intrapreneurs launch new products and generate new profits?
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by using the company's existing resources
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What are some good ways to learn how to run your own business? 3pts
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Talk to other business owners; run a small business during your off hours; work for a successful entrepreneur
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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 such ____
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incubators
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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: 2pts
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manage customer records; follow the daily sales and expenses
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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?
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Location analysis
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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:
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manufacturing plan
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This program is designed to pay unemployment benefits while building a business
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Self-Employment Assistance Program (SEA) offered by some states
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People who are successful ____ have job-creating powers
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entrepreneurs
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Which of the following are examples of reasons for going global? 2pts
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exporting can extend product life; exporting can absorb excess inventory
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Why has Community Development Financial Institutions (CDFI) been successful? 3pts
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they maintained financial discipline other lenders lack; provide counseling on improving cash flow; offer counseling on marketing strategies
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The SBA determines whether a business is considered ¨small¨ only after analyzing how a particular business measures up compared to other businesses in its _____
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industry
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____ is accepting the risk of starting and running a business
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entrepreneurship
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Why do people take on the entrepreneurial challenge? 4pts
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opportunity, profit, independent, challenge
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What does it take to be an entrepreneur? 5pts
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self-directed; self-nurturing; action-oriented; highly energetic; tolerant of uncertainty
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A business idea is a good opportunity if: 6pts
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it fills customers' needs; you have the skills and resources to start a business; you can sell the product or service at a price customers are willing and able to pay and still make a profit; you can get your product or service to customers before your window of opportunity closes (before competitors with similar solutions beat you to the marketplace); you can keep the business going
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what are micropreneurs?
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entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.
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Reasons for growth of home-based businesses: 6pts
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computer technology; corporate downsizing has led many to venture out on their own (the work of downsized employees still needs to be done, and corporations are outsourcing much of it to smaller companies); social attitudes have changed; new tax laws have loosened restrictions on deducting expenses for home offices
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What are the challenges faced by home-based businesses 6pts
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Getting new customers (they don't have a store front); managing time; keeping work and family tasks separate; abiding by city ordinances (some cities restrict a lot of traffic to a hosue); managing risk
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What is affiliate marketing?
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an internet based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website
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What are intrapreneurs?
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creative people who work as entrepreneurs within corporations.
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What is the idea behind being an intrapreneur?
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the idea is to use a company's existing resources - human, financial, and physical, to launch new products and generate new profits
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What was the intention of the Immigration Act?
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to encourage more entrepreneurs to come to the us
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What are enterprise zones
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specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.
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What are two other names for enterprise zones?
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empowerment zones or enterprise communities
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What are incubators?
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offfer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help.
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Why do individuals accept the risks of business ownership?
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the sense of self-satisfaction and independence
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What will not help your small business succeed
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Services you perform are easily replicated by larger companies, such as online banking
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What will surprisingly help your small business succeed?
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investing in a franchise.
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Small businesses create about ____% of the new jobs in the US
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60-80%
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Conversations with people who start their own business often reveal that:
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many small business owners got their entrepreneurial idea from a previous job
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Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm's resources is:
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seek and pay for expert guidance and assistance.
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small business 3pts
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a business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the #Small-Business-Administration or #SBA) in terms of employees or annual receipts
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business plan 4pts
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a detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owners.
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What are angel investors
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private individuals who invest their own money in potentially hot new companies before they go public
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what is individual investing called
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peer to peer or p2p
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What are community development financial institutions or CDFI? 2pts
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may be a source of funding for businesses in lower-income communities; play a role in economic recovery.
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What are the two most commonly used sources of capital for an entrepreneur?
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personal savins and friends and relatives
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venture-capitalist
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individuals or companies that invest in new businesses in exchange for partial ownership of those businesses; they want a stake in your company (as much as 60%)
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microloan program
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provides small loans and technical assistance to #small-business owners
