Deck 5: Small Business, Entrepreneurship, and Franchises

Question 1

The primary reason for small-business failure is mismanagement resulting from lack of business know-how.

Answer 1

True

Question 2

The type of person likely to start a small business is independent, has a desire to determine his or her own destiny, and is willing to find and accept a challenge.

Answer 2

True

Question 3

The SBA is more likely to help nonminority small businesses.

Answer 3

False

Question 4

Franchising is the actual granting of a franchise.

Question 5

A government agency that was created to assist, counsel, and protect the interests of small busi-nesses in the United States is called

A) Small Business Institutes.
B) Small Business Investment Companies.
C) the Small Business Administration.
D) Small Business Development Centers.
E) Small Business Guidance Centers.

Question 6

Businesses seem to cluster in which of the following industries?

A) Service industries
B) Distribution industries
C) Production industries
D) Financial industries
E) All of the above

Question 7

A group of retired businesspeople who volunteer their time to help small-business owners is known as

A) SCORE.
B) ACE.
C) SBDC.
D) SBI.
E) SBIC.

Question 8

A privately-owned company that provides venture capital to small firms is a(n)

A) small-business association.
B) small-business investment company.
C) small-business institute.
D) active corps of executives.
E) small-business development center.

Question 9

The person or firm that purchases a franchise is called a(n)

A) entrepreneur.
B) franchisor.
C) franchisee.
D) enterpriser.
E) capitalist.

Question 10

An advantage to the franchisor is that he or she gains fast and selective distribution of the product.

Question 11

An advantage for the franchisee is the opportunity to start a business with limited capital.

Question 12

The majority of small businesses are found in the production industry.

Question 13

Because of their small size, small businesses affect the U.S. economy very little.

Question 14

Planning is one vital element in the success of a small business.

Question 15

The individual or firm that grants a franchise is known as the

A) SBA.
B) franchisor.
C) franchisee.
D) entrepreneur.
E) grantor.

Question 16

Small businesses provide

A) technical innovation.
B) employment.
C) competition.
D) for the needs of society.
E) all of the above.

Question 17

One advantage a small business has is

A) no risk of failure.
B) limited management skills of owners.
C) developing personal relationships with customers and employees.
D) sharing profits with employees.
E) limited ability of raising capital.

Question 18

The main disadvantage of franchising affects

A) the consumer.
B) the franchisor.
C) the franchisee.
D) both b and c.
E) the grantor.

Question 19

Most people start their own business to make lots of money.

Question 20

You don't need a lot of money to start a business.

Question 21

It is important to have a great idea.

Question 22

The bigger the risk, the bigger the reward!

Question 23

Successful entrepreneurs are born to have their own business.

Question 24

If you haven't started a business by the time you are 30, you are too old.

Question 25

You don't usually need a business plan to attract potential investors.

Question 26

It is better to be creative than self-disciplined.

Question 27

It is smarter to focus on the big picture instead of business details.

Question 28

Most entrepreneurs are ethical people.