Business, Marketing, & Finance Chapter 6 Review

In the United States, nearly as many small businesses close as begin each year.

• True

• False

It is easier for a small business to meet the precise needs of customers than a large business.

• True

• False

Which of the following is probably the LEAST important factor in becoming an entrepreneur?

• living in a major U.S. city

• having special skills and abilities

• developing a good initial business plan

• having a real desire to be your own boss

Successful entrepreneurs tend to have all of the following characteristics EXCEPT

• energetic

• creative

• goal-oriented

• hesitant

Entrepreneurs

• almost never own their first business while in their teens

• must have a very low tolerance for ambiguity

• must have a business degree to be successful

• come from all age categories and educational backgrounds

Most of the money needed to start a new business comes from

• the sale of stock

• the entrepreneur and his/her family

• personal and business loans

• credit given by businesses that sell products and services to the new business

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

• opportunity cost

• innovation

• improvement

• invention

Of all new businesses,

• about one-half are profitable, one-quarter do not make a profit but continue to operate, and one-quarter lose money

• about one-third are profitable, one-third do not make a profit but continue to operate, and one-third lose money

• about one-quarter are profitable and three-quarters lose money

• about three-quarters are profitable and one-quarter lose money

According to the Small Business Administration, a small business is an independent business with fewer than ____________________ employees.

• 10

• 50

• 500

• 100

Which of the following does NOT describe a typical small business?

• It operates in one or very few locations

• It is dominant in its field

• It serves a small market

• The owner is usually the manager