Understanding Small Business Fundamentals

Which of the following statements about new businesses is true?

• Most new businesses survive past their first year.

• Most new businesses do not survive past their first year.

What percentage of all businesses are classified as small?

• Over 50 percent

• Over 75 percent

• Over 99 percent

• Over 90 percent

Which of the following is NOT a characteristic of small businesses?

• Less than 100 employees

• Little impact on the industry

• Independent operations, financing, and ownership

• A major impact on the industry

What is the term for decreasing costs through the production of larger quantities?

• Economies of scale

• Diseconomies of scale

• Economies of scope

• Diseconomies of scope

Which of the following is NOT typically included in the definition of an entrepreneur?

• Controlling

• Creation

• Innovation

• Risk assumption

What is the most common cause of business failure?

• Lack of innovation

• Lack of capital

• Lack of marketing

• Lack of location

Which stage in the startup process model involves the small business owner removing themselves from the business?

• Growth

• Maturity

• Implementation

• Harvest

Which of the following is NOT a prerequisite for becoming a successful entrepreneur?

• Passion

• Determination

• Knowledge

• Education

What is the term for the obligation of individuals and businesses to do what is right?

• Legal responsibility

• Ethical responsibility

• Economic responsibility

• Philanthropic responsibility

In a SWOT analysis, which factors are considered internal to the business?

• Opportunities and Threats

• Strengths and Weaknesses

• Opportunities and Strengths

• Threats and Weaknesses