Question 1

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 people who have unsatisfied wants and needs and are willing and able to buy. This is the foundation of demand and the basic premise of economics. The presence of wholesalers and retailers may facilitate the exchange of goods and services, but they are not a requirement for a market to exist. Similarly, a dominant firm may exist within a particular market, but it does not define the existence of the market itself. Laboratory testing and FDA approval is only relevant for certain products, and not a requirement for a market to exist.

Question 2

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 3

Small business employees:

Accepted Answer

Small businesses often offer more opportunities for employees to take on diverse roles and responsibilities, as well as a closer-knit work environment. This can lead to more job satisfaction than in large corporations where employees may be more limited in their roles and have less direct interaction with upper management. However, wages may not always be higher in small businesses compared to large corporations.

Question 4

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

Accepted Answer

Bankers will expect the entrepreneur to provide a business plan because it provides a clear understanding of the business's goals, strategies, financial projections, and potential risks. A solid business plan increases the chances of getting approved for a loan and helps establish credibility and trust between the entrepreneur and the banker. The other options (A, C, and D) are not accurate as bankers do not typically request ownership shares, only focus on dot.com related industries, or offer only short-term financing.

Question 5

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 the advice of an attorney is important for legal documents such as leases, contracts, and partnership agreements as they are trained and knowledgeable about the legal aspects involved in such documents. A friend who has started a business may have some knowledge, but may not be able to provide the legal expertise needed. A competitor may not have an interest in providing advice and may even have conflicting interests. A marketing expert may be able to provide valuable advice, but not for legal documents.

Question 6

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 7

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

Accepted Answer

One of the major factors contributing to difficulty in attracting qualified workers for small businesses is the lower pay and limited benefits offered. Many small businesses struggle to offer competitive salaries and comprehensive benefit packages compared to larger corporations, making it difficult to attract and retain skilled employees.

Question 8

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

Accepted Answer

The Small Business Administration is a government agency dedicated to helping small businesses get started, grow, and succeed. It provides resources, guidance, and access to capital to small businesses.

Question 9

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

Accepted Answer

A Small Business Investment Company (SBIC) is a privately owned and operated investment company that is licensed by the Small Business Administration (SBA) to provide financing and management assistance to small businesses. SBICs provide funding in the form of loans, equity investments, and other types of financing to small businesses that meet their investment criteria.

Question 10

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 a company in exchange for an ownership stake, which allows them to have some say in the management and direction of the business. They also typically expect to receive a return on their investment through a percentage of the company's profits or a successful exit, such as an IPO or acquisition. Interest rates and repayment terms may vary, but it is not uncommon for venture capital investments to be long-term and involve multiple rounds of funding.

Question 11

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 a store is opened. This allows them to identify their target audience, understand their competition, and develop a marketing strategy that will help them succeed. By making these decisions early on, they can ensure that they are meeting the needs of their customers and positioning themselves for success in a competitive marketplace.

Question 12

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

Accepted Answer

Small Business Development Centers (SBDCs) are funded by the SBA and provide free consulting and low-cost training to aspiring and existing business owners. They also provide assistance with SBA loan applications and connecting entrepreneurs with lenders. Therefore, it's the best choice for young entrepreneurs to start shopping for SBA loans.

Question 13

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 can help ensure accurate financial records and ease the process of managing finances and taxes later on. Angel investment networks, detailed supplier networks, and vertical marketing systems may be important for certain types of businesses, but are not necessary for all businesses from the start.

Question 14

The executive summary section of the business plan contains:

Accepted Answer

The executive summary is typically the first section of the business plan that investors and bankers will read. It should be attention-grabbing and provide a high-level overview of the business idea and its potential for success. It should not contain detailed financial information or personal qualifications of the entrepreneur.

Question 15

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

Accepted Answer

The Small Business Administration's microloan program awards loans based primarily on the integrity of the borrower and the soundness of their business idea. While collateral and credit history may be considered, they are not the primary determining factors in loan approval. The previous business success is also not necessarily a major factor since the microloan program is often aimed at new or small businesses without an extensive track record.

Question 16

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 Service Corps of Retired Executives (SCORE) is a program under the Small Business Administration that provides free business advice and mentoring to small business owners. SCORE volunteers are retired executives from various industries, trade associations, and academic backgrounds.

Question 17

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

Accepted Answer

The answer of A(n)____________ is a valuable source of information...

Question 18

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 (demand) and the financial resources needed to buy (ability to pay). The other options (A, B, and C) are not necessary requirements for being part of a market.

Question 19

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

Accepted Answer

A market is a group of consumers who have unsatisfied wants and needs and are able to buy a product or service. The other options refer to specific types of consumer organizations, but do not necessarily define the group of consumers with wants and needs.

Question 20

A good business plan will:

Accepted Answer

A good business plan should describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications. It should not omit small details of operating the business nor be purposefully vague since that can lead to confusion and lack of direction. Personal information about the owner may be included if it's relevant to the success of the business.

Quiz 6: Entrepreneurship and Starting a Small Business