Ch. 5 Small Businesses

Indicate whether the statement is true or false. 1. Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

• True

• False

Indicate whether the statement is true or false. 2. The average length of an SBA loan is about 25 years.

• True

• False

Indicate whether the statement is true or false. 3. Small businesses account for all nongovernment employment.

• True

• False

Indicate whether the statement is true or false. In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the business experience of others.

• True

• False

Indicate whether the statement is true or false. 5. About 50 percent of small businesses in the United States currently engage in deliberate exporting.

• True

• False

Which of the following is not a reason for starting a small business?

• Desire to determine one's own destiny

• Willingness to find and accept a challenge

• Desire for a guaranteed financial return

• Desire for independence

• Desire to create a new business

Which of the following provided 67 percent of workers with their first jobs and first on-the-job training?

• Large corporations

• Universities

• Government agencies

• High schools

• Small businesses

Which of the following would not be considered a small business?

• woman who sells $52,000 worth of homemade face masks and hair bands on Etsy

• farm that has four part-time employees and $600,000 annual sales to farmers’ markets

• farm with 25 seasonal employees and $3 million annual sales to Whole Foods

• downtown boutique with ten employees and $5 million annual sales

• programmer who writes code for games at home on contract for $250,000 a year

Which of the following is not a source of debt financing?

• Bank loan

• Small-Business Investment Company

• SBA-guaranteed loan

• Credit cards

• Line of credit

Who typically manages a small business?

• Relatives

• Professional managers

• Friends

• The founders/owners

• A board of directors