Question 1

While clearly important to their owners, employees, and local communities, small businesses actually account for only a very small percentage of output and employment in the U.S. economy.

Accepted Answer

Small businesses are significant contributors to the U.S. economy, accounting for a large percentage of employment and output. They employ nearly half of the private workforce and contribute significantly to GDP.

Question 2

Joan recently retired from an executive position in a midsize company. She is enthusiastic about spending some of her time helping out new business owners. Joan might find volunteering with the Small Business Administration's Service Corps for Retired Executives program a meaningful way to achieve her goals.

Accepted Answer

The Service Corps for Retired Executives program is a volunteer organization through the Small Business Administration that provides free business mentoring and advice to new and struggling small business owners. Joan, as a retired executive with a desire to help new business owners, would likely find this program a meaningful way to achieve her goals.

Question 3

One advantage of buying a franchise is that the franchiser usually offers training, financial assistance, and a recognizable brand.

Accepted Answer

This statement is true. Franchise owners often receive training from the franchiser, as well as financial assistance and the use of a well-known brand or trademark.

Question 4

Even five years after their launch, half of all established small businesses remain viable.

Accepted Answer

This statement is true. According to a report by the Small Business Administration, around 50% of small businesses survive at least five years.

Question 5

The failure rate of a franchise is significantly higher than the rate for starting a business from scratch.

Accepted Answer

Franchises generally have a lower failure rate compared to starting a business from scratch due to established brand recognition, proven business models, and support from the franchisor.

Question 6

A typical business plan should be approximately five to seven pages and should provide only a brief overview of the purpose, strategy, and organization of the firm. One common mistake small business owners make is to develop long, detailed business plans that bankers and investors simply will not take the time to read.

Accepted Answer

A typical business plan is usually more detailed and can range from 20 to 40 pages, covering various aspects such as market analysis, financial projections, and operational plans, which are necessary for investors and bankers to assess the viability of the business.

Question 7

Small businesses are the major source of new jobs created by the U.S. economy.

Accepted Answer

Small businesses are responsible for creating two thirds of net new jobs in the U.S. economy.

Question 8

One of the major contributions of small businesses is the vitalization of inner cities.

Accepted Answer

Small businesses can bring economic growth and job opportunities to inner city areas, contributing to their revitalization.

Question 9

Three downsides to buying a franchise include high initial costs, the ongoing percent­of­sales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.

Accepted Answer

The statement accurately outlines three downsides to buying a franchise.

Question 10

According to the Small Business Administration, a small company is any independent firm whose number of employees ranges from fewer than 100 to 1,500.

Accepted Answer

According to the Small Business Administration, a small company is any independent firm whose number of employees ranges from fewer than 100 to 1,500.

Question 11

Small business owners who need help in planning and financing their businesses can often receive valuable advice from Small Business Development Centers.

Accepted Answer

Small Business Development Centers (SBDCs) provide free or low-cost consulting services, training programs, and resources to help small business owners with planning and financing their businesses.

Question 12

One of the biggest problems facing people who want to start a small business is the lack of educational resources available to help them learn the ins and outs of starting and managing their new company.

Accepted Answer

There are numerous educational resources available for aspiring small business owners, including online courses, workshops, books, and government programs designed to help them learn about starting and managing a business.

Question 13

Small businesses generate half of the U.S. gross domestic product.

Accepted Answer

According to the U.S. Small Business Administration, small businesses generate about 44% of the U.S. gross domestic product.

Question 14

Small businesses cannot succeed without a business plan.

Accepted Answer

While a business plan can be beneficial, small businesses can still succeed without one by adapting to market changes and leveraging other strategies.

Question 15

Since they lack the financial resources to fund research and product development efforts, small businesses are seldom able to introduce new innovations into the marketplace.

Accepted Answer

While small businesses may face financial constraints, they are still able to introduce new innovations into the marketplace. They can use alternative methods such as crowdsourcing, partnerships with other businesses, or focusing on niche markets to bring new products and services to customers.

Question 16

Workers employed by small businesses are much less likely to be laid off during an economic downturn than workers in major corporations.

Accepted Answer

During economic downturns, small businesses often have fewer financial resources and less access to credit, making them more vulnerable to layoffs compared to larger corporations that may have more reserves and diversified operations.

Question 17

A key reason for developing a formal business plan is that having such a plan is absolutely critical when seeking external financing.

Accepted Answer

A formal business plan provides potential investors or lenders with a clear understanding of the company's goals, strategies, and financial projections, which can increase their confidence in the business and improve the chances of securing funding.

Question 18

While the Small Business Administration provides significant financial assistance to small businesses, many critics point out that it fails to provide other types of advice, information, and assistance desperately needed by small business owners.

Accepted Answer

The answer of While the Small Business Administration provides significant...

Question 19

Working a few years for someone else in the field that interests you is not recommended as you may get too comfortable to take the plunge and launch your own venture.

Accepted Answer

Working for someone else in the same field can provide valuable experience, insights and connections that can be helpful in launching your own venture. It can also help you gain more confidence in your abilities and clarify your goals. However, it is important to keep in mind that comfort can become a trap and it is important to maintain a strong entrepreneurial mindset and drive.

Question 20

Buying an established business may involve inheriting old mistakes that can range from poor employee relations to pending lawsuits.

Accepted Answer

When buying an established business, there is a risk of inheriting old problems and mistakes made by the previous owners or management. This can include issues related to employees, legal liabilities, or financial mismanagement. It is important for the buyers to conduct due diligence and assess the risks associated with the purchase before making a decision.

Quiz 7: Small Business Entrepreneurship: Economic Rocket Fuel

While clearly important to their owners, employees, and local communities, small businesses actually account for only a very small percentage of output and employment in the U.S. economy.

One advantage of buying a franchise is that the franchiser usually offers training, financial assistance, and a recognizable brand.

Even five years after their launch, half of all established small businesses remain viable.

The failure rate of a franchise is significantly higher than the rate for starting a business from scratch.

Small businesses are the major source of new jobs created by the U.S. economy.

One of the major contributions of small businesses is the vitalization of inner cities.

Three downsides to buying a franchise include high initial costs, the ongoing percentofsales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.

According to the Small Business Administration, a small company is any independent firm whose number of employees ranges from fewer than 100 to 1,500.

Small business owners who need help in planning and financing their businesses can often receive valuable advice from Small Business Development Centers.

One of the biggest problems facing people who want to start a small business is the lack of educational resources available to help them learn the ins and outs of starting and managing their new company.

Small businesses generate half of the U.S. gross domestic product.

Small businesses cannot succeed without a business plan.

Since they lack the financial resources to fund research and product development efforts, small businesses are seldom able to introduce new innovations into the marketplace.

Workers employed by small businesses are much less likely to be laid off during an economic downturn than workers in major corporations.

A key reason for developing a formal business plan is that having such a plan is absolutely critical when seeking external financing.

While the Small Business Administration provides significant financial assistance to small businesses, many critics point out that it fails to provide other types of advice, information, and assistance desperately needed by small business owners.

Working a few years for someone else in the field that interests you is not recommended as you may get too comfortable to take the plunge and launch your own venture.

Buying an established business may involve inheriting old mistakes that can range from poor employee relations to pending lawsuits.

Quiz 7: Small Business Entrepreneurship: Economic Rocket Fuel

While clearly important to their owners, employees, and local communities, small businesses actually account for only a very small percentage of output and employment in the U.S. economy.

One advantage of buying a franchise is that the franchiser usually offers training, financial assistance, and a recognizable brand.

Even five years after their launch, half of all established small businesses remain viable.

The failure rate of a franchise is significantly higher than the rate for starting a business from scratch.

Small businesses are the major source of new jobs created by the U.S. economy.

One of the major contributions of small businesses is the vitalization of inner cities.

Three downsides to buying a franchise include high initial costs, the ongoing percent­of­sales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.

According to the Small Business Administration, a small company is any independent firm whose number of employees ranges from fewer than 100 to 1,500.

Small business owners who need help in planning and financing their businesses can often receive valuable advice from Small Business Development Centers.

One of the biggest problems facing people who want to start a small business is the lack of educational resources available to help them learn the ins and outs of starting and managing their new company.

Small businesses generate half of the U.S. gross domestic product.

Small businesses cannot succeed without a business plan.

Since they lack the financial resources to fund research and product development efforts, small businesses are seldom able to introduce new innovations into the marketplace.

Workers employed by small businesses are much less likely to be laid off during an economic downturn than workers in major corporations.

A key reason for developing a formal business plan is that having such a plan is absolutely critical when seeking external financing.

While the Small Business Administration provides significant financial assistance to small businesses, many critics point out that it fails to provide other types of advice, information, and assistance desperately needed by small business owners.

Working a few years for someone else in the field that interests you is not recommended as you may get too comfortable to take the plunge and launch your own venture.

Buying an established business may involve inheriting old mistakes that can range from poor employee relations to pending lawsuits.

Three downsides to buying a franchise include high initial costs, the ongoing percentofsales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.