WorksheetsChapter 5: Starting & Growing a Business
Total questions: 33
Worksheet time: 17mins
_________ 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
Small business owners must recognize that their size makes them: *
less flexible
unable to react to market forces
able to develop innovative product ideas quickly
leads them to be inefficient and more costly to operate
Which of the following is a disadvantage of small businesses? *
They lack the capacity to focus on narrow niches.
They cannot operate in high technology industries.
They have a high rate of failure.
They lack the ability to adapt to changing market demands.
SBA stands for: *
Smart Business Association
Small Borrowers Administration
Small Business Admiration
Small Business Administration
The SBA... *
assists small businesses in the areas of starting, managing, contracts, and providing financing.
is designed only to provide financial assistance to startup firms.
is a private organization operating for profit.
returns all profits from operations to local small businesses.
The written document that details the idea for a new business is known as... *
self assessment
business idea diary
business plan
organization form
Which is not part of a business plan? *
company description
market (competition) analysis
unrealistic financial projections
business goals
Which of the following statements is true of a business plan?
Small businesses do not need a business plan.
It does not have to be revised periodically.
It is created to limit a business's flexibility and decision-making ability.
It should establish a strategy for acquiring sufficient funds to keep a business going.
The main purpose of a small business owner is to: *
obtain financing for operations
carry out the business plan through all areas of the business
find a prime location to start the business
seek out markets for the product or service
After 5 years what percent of all small businesses fail? *
10%
33%
50%
90%
_______ is best described as the lack of funds to operate a business normally. *
Debt financing
Franchising
Trade credit
Undercapitalization
Penelope is a very talented software engineer who starts her own small software development firm. She finances the firm from her savings. Initially, she is able to get many projects from customers and completes them successfully. However, as her business grows, she fails to make good decisions in hiring new employees, billing the clients, and negotiating prices. She eventually ends up liquidating the business. Which of the following causes of small-business failure does this scenario best illustrate?
Corporate structure
Managerial inexperience
Debt financing
Economies of scale
The act of financing one's business by taking out a loan is known as:
debt financing
equity financing
capital raising
franchising
Walter sold a piece of land he inherited from his grandparents and started a business with the proceeds. Which of the following sources has Walter used to raise funds for his business?
IPO
Personal Money Saved
Debt financing
Venture capital
Which of the following is a disadvantage of obtaining money from venture capitalists to start a small business?
They require the small-business owner to give up a percentage of their business.
They offer conflicting views on the operations of the business.
They are not interested in claiming ownership of the business.
They require that the small business owner mortgage his or her personal property to obtain funds.
Securing a mortgage from a bank for a new business venture is an example of: *
equity financing
venture capitalism
debt financing
trade credits
George is an employee at a company that provides information technology solutions to other firms. Recognizing his potential to innovate, the top management of the company has given him the complete liberty to develop a new smart phone application using the resources of the company. In this scenario, George best illustrates a(n).
franchiser
venture capitalist
intrapreneur
entrepreneur
Downsizing is an effective way to: *
reduce entrepreneurial spirit among employees.
gain the advantages of small businesses.
increase the management layers.
increase salaries.
are both growing at a fast rate in our current market, responsible for employing millions of workers.
corporations
state and federal governments
women and minority-owned businesses
national parks
Articulates a company's purpose. *
financial reports
business plan
mission statement
incorporation documents
Which of the following is a popular crowdfunding platform?
fundmysmallbusiness.org
crowdfunding.com
kickstarter.com
sba.gov
Advantages of starting a business from scratch. *
Clean slate, able to be creative, full control.
Existing reputation and equipment.
Reduces some of the guesswork and easier to run.
Stressful and expensive.
The most common business structure for small businesses. *
sole proprietorship
partnership
corporation
not-for-profit
Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock are called:
intrapreneurs
venture capitalists
equity providers
franchisers
