Chapter 5: Starting & Growing a Business

_________ is the process of creating and managing a business to achieve desired objectives. *

• Entrepreneurship

• Innovation

• Brainstorming

• Risk-Taking

A small business is any independently owned business that employs not more than people. (BEST ANSWER)

• 25

• 100

• 250

• 500

People become entrepreneurs because of all the following reasons except:

• Want the challenge of building a business

• Loved working for someone else

• Wanted to be their own boss

• Believed it was the best route to financial independence

Salma owns a Lebanese restaurant that employs around 25 people. She is solely responsible for the management of the restaurant. Her business has to compete with a larger chain of restaurants that offer the same cuisine. Salma's restaurant can be classified as a:

• multinational corporation

• small business

• conglomerate

• franchise

Which of the following is true about the role of small businesses in the American economy? *

• They only represent about 25% of all employer firms.

• There has been a decline in the number of small businesses owned by minorities.

• They employ more than 1000 employees.

• They play a significant role in a healthy economy.

Which of the following reasons makes retailing an attractive industry for small businesses? *

• Retailing eliminates the need for any entrepreneurial skills.

• Retailing offers high barriers to entry.

• Retailing requires low initial financing.

• Retailing eliminates the need to engage with customers.

Which of the following best illustrates a small business operating in a retail industry as opposed to wholesaling its products?

• Neon Love Inc. imports candles and directly sells them to customers through its stores.

• Pink Cult, an apparel company, sells its merchandise through Kohl's, Macy's, & Target.

• BC Inc. manufactures stationery and sells it in bulk to book shops and supermarkets.

• Janet bakes cakes and sells them to other restaurants and cafes in malls.

Studies have shown that entrepreneurs are:

• ambitious

• willing to take risks

• passionate

• all of the above are correct

The percentage of small businesses in the US that have fewer than 500 employees is: *

• 99%

• 50%

• 27%

• 7%

Small businesses are able to thrive because: *

• large corporations are always failing

• they provide quality goods or services in niche markets

• the internet has been a failure

• sales do not represent the success of entrepreneurs