Revision-AOS 1 -Small Business Management--Part 1

Which of the following is usually true for small businesses?

• They reach a large number of markets
  

• They have many layers of management
  

• They are managed by their owners

• They employ a large number of workers

Define the term entrepreneur and give an example of a successful entrepreneur

Answer explanation

A person who, having generated a new business idea, develops it by setting up a

business.

1. Elon Musk (Tesla, SpaceX): Founded Tesla for electric cars and SpaceX for space exploration.

2. Mark Zuckerberg (Facebook): Co-founded Facebook, the largest social media platform.

Brian Chesky (Airbnb): Co-founded Airbnb, a platform for booking accommodations worldwide, revolutionizing the hospitality industry.

1. Melanie Perkins (Canva): Co-founder and CEO of Canva

Alexandra, a 25-year-old entrepreneur, created a unique product: biodegradable seedling pots made from recycled paper. Her eco-friendly pots, enriched with organic nutrients, gained attention for their sustainability and performance. Despite challenges, Alexandra's dedication to innovation led to the success of her eco-conscious gardening products, inspiring others to adopt environmentally friendly practices.

What are two entrepreneurial characteristics demonstrated by Alexandra in the case provided?

• Fear of Failure

• Showing innovation

  and initiative

• Determination

• Lack of Resilience

Sarah, a marketing professional, started FitWell Co., a community-focused fitness studio, driven by her passion for health and wellness. Seeking independence and autonomy, she left her corporate job to pursue entrepreneurship, drawn by the opportunity to earn income doing something she loves while enjoying flexibility and work-life balance. Despite challenges like securing funding and finding the right location, Sarah's determination and vision keep her motivated to build a thriving business that makes a positive impact on her community.What reasons led Sarah to start her own business, FitWell Co.?

• Passion for health and wellness

• Financial Opportunity with flexibility

• independence and autonomy

• All of the above

What does the term "incorporated" mean in the context of business structures?

• It refers to the process of merging two companies into one entity

• It indicates the process of registering a business with the government

• It signifies the process of becoming a separate legal entity from the owner/s

• It denotes the process of creating a partnership agreement

Which of the following legal structures represents an "unincorporated" business structure?

• Sole trader

• Partnership

• Private company

• Public company

Which of the following characteristics best describe a sole trader (sole proprietorship)?

• Owned and operated by between two and 20 people

• The owner bears unlimited liability for the debts of the business

• The business is considered a separate legal entity from the owner

• Easy to establish

Which of the following is NOT a characteristic of a partnership?

• owned and operated by

  between 2 and 20 people.

• Business is not a separate legal entity from owners

• subject to unlimited liability

• Partners have limited liability for the debts of the business

4. Which of the following is not a disadvantages of a partnership?

• Unlimited liability for all partners

• Possibility of disputes

• Divided authority

• pooled funds and talent

Which of the following are advantages of a sole trader (sole proprietorship)?

• Limited liability for the owner

• Low-cost of entry/easy to start

• Ease of decision-making

• Difficult to raise finance or expand