Chapter 5

Small-business owners want to determine whether their companies meet the standards for small-business designation because

• A) they do not have to pay taxes on their profits.
• B) government agencies offer benefits designed to help small businesses compete with larger firms.
• C) incorporation is easier for them.
• D) banks are more likely to grant them loans.

Which government agency establishes standards for small businesses?

• A) Food and Drug Administration
• B) Securities and Exchange Commission
• C) Small Business Administration
• D) Small Business Investment Company

If you are considering starting your own business, a key priority for you should be to:

• A) learn the basics of business.
• B) incorporate your business.
• C) get a loan from your local bank
• D) apply for a Small Business Administration loan.

Which of the following is the leading cause of today's small business failures?

• A) management shortcomings
• B) poor products and/or services
• C) no marketing plan
• D) excess government regulation

Many businesses fail during the early years because of ________.

• A) unmotivated owners
• B) poor planning
• C) niche markets
• D) inadequate financing

A business plan for a small business typically contains all of the following EXCEPT ________.

• A) a statement of the company's goals
• B) a detailed time frame for achieving goals
• C) projections of money flows
• D) a time frame for selling stock to investors

The Small Business Administration (SBA) provides all of the following EXCEPT ________.

• A) loan guarantees
• B) advice from retired executives
• C) access to venture capitalists
• D) business incubators

In exchange for an ownership share, Benita's small business receives financing from a group of individuals known as _____________,

• A) microloan investors
• B) franchisors
• C) Small Business Investment Companies
• D) venture capitalists

McDonalds offers a contractual business arrangement in various countries around the world. McDonalds is an example of a(n) international ____________.

• A) merger
• B) franchise
• C) acquisition
• D) not-for-profit corporation

The two principal parties in a franchising agreement are the ________.

• A) manager and worker
• B) franchiser and partners
• C) franchiser and franchisee
• D) venture capitalist and SBA