Question 1

A(n)____________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk.

Accepted Answer

An insurance agent can provide valuable information on techniques to reduce a firm's exposure to risk, as they specialize in assessing and managing risk for individuals and businesses through various insurance policies.

Question 2

When seeking financial backing from a venture capitalist,a small business owner should realize that the venture capitalist will:

Accepted Answer

Venture capitalists typically invest in early stage or high-growth companies in exchange for an ownership stake in the company. They may also want a say in the management of the business to ensure their investment is being used effectively. This is different from traditional lenders who only expect repayment with interest. So, a small business owner should be prepared to give up some ownership control in exchange for financial backing from a venture capitalist.

Question 3

A good business plan will:

Accepted Answer

A good business plan should include a comprehensive description of all aspects of the business, including the product or service offered, the target market, competition, financial resources, and the owner's qualifications. This level of detail is necessary to provide a clear and complete understanding of the company's goals and objectives, its strengths and weaknesses, and the overall feasibility of the business idea. Omitting details or being purposefully vague can result in a plan that is incomplete or lacking in substance, making it difficult to secure funding or attract investors.

Question 4

Small businesses must seek advice from outside experts.In order to put together official documents such as leases,contracts,and partnership agreements,it is important to seek the advice of _________.

Accepted Answer

Seeking advice from an attorney is the best choice when it comes to putting together official documents such as leases, contracts, and partnership agreements. An attorney has the necessary legal knowledge and experience to ensure that the documents are legally sound and protect the interests of the business. Friends who have started businesses and competitors may offer helpful insights, but they are not qualified to provide legal advice. Marketing experts may be helpful in developing marketing strategies, but they are not necessarily knowledgeable about legal documentation.

Question 5

Which of the following sources of investment is the least likely type available to entrepreneurs?

Accepted Answer

The answer of Which of the following sources of investment...

Question 6

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

Accepted Answer

A market refers to a group of potential customers who have the willingness and ability to purchase a product or service. Therefore, option A is the correct answer. Option B, C, and D refer to different types of cooperative organizations and are not relevant to the definition of a market.

Question 7

A new business that sets up a(n)_____________ from the start is saving itself time and grief later.

Accepted Answer

A good accounting system from the start is essential for any business to track its financial transactions and make informed decisions. Setting up a detailed supplier network or vertical marketing system can come later as the business grows, but not having an efficient accounting system can cause major problems down the line. Angel investment network may not be relevant for every business, depending on their funding goals.

Question 8

Similar to how large businesses proceed,small businesses make marketing decisions _____________.

Accepted Answer

Small businesses typically make marketing decisions before a product is developed or store is opened. This includes conducting market research, identifying target customers, and developing a marketing strategy to reach those customers. By making these decisions early on, small businesses can better position themselves for success and avoid costly mistakes that could arise if marketing decisions were made later in the process.

Question 9

A Small Business Investment Company (SBIC)is a(n):

Accepted Answer

A Small Business Investment Company (SBIC) is a private investment company that is licensed by the SBA to make loans to small businesses. It is not an agency of the federal government that loans money, nor is it a private firm that offers loans in return for a share of ownership. State government agencies that provide support to small businesses are typically called Small Business Development Centers, not SBICs.

Question 10

The executive summary section of the business plan contains:

Accepted Answer

The executive summary section is typically the first part of the business plan that potential investors or lenders will read, so it needs to be compelling and attention-grabbing. It should provide a clear and concise overview of the business concept, market opportunity, unique selling proposition, financial projections and investment requirements. The executive summary should convince the reader that the business is worth investing time and money into, and set the stage for the rest of the business plan. The other options listed are not typically included in the executive summary section.

Question 11

Small business owners often struggle in attracting qualified workers.Which of the following contributes to this problem?

Accepted Answer

Many small businesses cannot afford to pay their employees high salaries or provide extensive benefits packages. This can make it difficult for them to compete with larger companies in attracting and retaining qualified workers. Additionally, the lack of job security and advancement opportunities in small businesses may be a turn-off for potential employees.

Question 12

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their:

Accepted Answer

The Small Business Administration's microloan program focuses on providing loans to entrepreneurs who have sound business ideas and demonstrate integrity in conducting their business. While collateral and credit history may also be considered, they are not the primary factors in determining loan approval. Similarly, previous business success may be a factor but is not the primary focus of the microloan program.

Question 13

To be considered part of a market,an individual must:

Accepted Answer

To be considered part of a market, an individual must have both a willingness to buy and the financial resources needed to buy. The other options such as being a registered buyer or knowing the names and addresses of two or more sellers may not necessarily be a requirement to be part of a market. Similarly, making a purchase within the past 30 days also doesn't necessarily determine whether an individual is part of a market or not.

Question 14

A market consists of potential buyers of a good or service.However,for a market to exist:

Accepted Answer

For a market to exist, there must be potential buyers who have unsatisfied wants and needs, and are willing and able to buy. The presence of wholesalers and retailers or a dominant firm, or the product being laboratory tested and approved by the FDA, are not necessary conditions for a market to exist.

Question 15

One of the best places for young entrepreneurs to start shopping for a SBA loan is a:

Accepted Answer

Small Business Development Centers (SBDCs) offer free business counseling and can help young entrepreneurs navigate the complex process of applying for an SBA loan. SBDCs also have relationships with local lenders and can provide guidance on finding the right financial institution for a small business loan.

Question 16

Entrepreneurs applying for a bank loan should realize that bankers will:

Accepted Answer

Providing a business plan is a crucial aspect of the loan application process as it allows bankers to assess the feasibility and potential profitability of the business. Option A is not a typical expectation of bankers, as they generally do not seek ownership in the businesses they lend to. Option C is incorrect as bankers lend to a variety of industries, not just dot.com related ones. Option D is also incorrect as banks can offer both short-term and long-term financing options.

Question 17

The Small Business Administration sponsors volunteers from industry,trade associations,and education who offer advice to small business owners.These volunteers are called:

Accepted Answer

The group of volunteers sponsored by the Small Business Administration who offer advice to small business owners are called the Service Corps of Retired Executives (SCORE).

Question 18

Which of the following government agencies is responsible for encouraging the development of small business?

Accepted Answer

The Small Business Administration (SBA) is a government agency that provides support and resources to entrepreneurs and small business owners. Their mission is to encourage the growth and development of small businesses in the United States. The Federal Trade Commission (FTC) is responsible for enforcing consumer protection laws and promoting fair competition. The Entrepreneur Assistance Center is not a government agency, but rather a resource center that provides support and guidance to entrepreneurs. The Federal Microloan Authority is not a government agency, but rather a program that provides small loans to entrepreneurs who may not qualify for traditional bank loans.

Question 19

Employees of small businesses often have greater job satisfaction than do employees of larger firms.One reason for this difference in job satisfaction is that employees of small businesses often:

Accepted Answer

The answer of Employees of small businesses often have greater...

Question 20

Most entrepreneurs and small business owners agree that a small business' marketing effort should include:

Accepted Answer

A web presence is crucial for any small business in today's digital world. It allows the business to showcase its products or services online, reach a wider audience, and potentially increase sales. A list of competitor products, pro forma income statement, and complete product lifecycle are also important components of a business plan, but not necessarily part of the marketing effort.

Quiz 6: Entrepreneurship and Starting a Small Business

A(n) ____________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk.