Chapter 6 Review

_____ financing is the money needed to pay for the current operating activities of a business.

• start-up

• short-term

• long-term

• owner

Many small businesses have an advantage over larger businesses because they are better able to _____.

• market their products

• provide unique services to customers

• raise large amounts of financial capital

• mass produce products

Roughly what percentage of new jobs are created by businesses with fewer than 500 employees?

• 20%

• 80%

• 60%

• 40%

There is little evidence that developing a business plan has any impact on whether a new business fails or succeeds.

• True

• False

Which of the following is not a common reason for the failure of small businesses?

• lack of sufficient start-up money

• Failure to manage credit offered to customers

• shortage of skilled workers

• lack of management experience

Entrepreneurship is risky.

• True

• False

Approximately half of all small businesses are home-based businesses.

• True

• False

Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.

• True

• False

Before a business owner completes the business plan, he or she should ask business experts to review the plan.

• True

• False

What is the most common type of small business, making up about 14.5 percent of all small businesses?

• construction

• educational services

• retail trade

• manufacturing