What is a small business?
independently owned and operated, is not a dominant force in its field, in general has less than 500 employees, and has an average of $7.5 million annual revenue
What percent do small businesses make up in net new jobs in the U.S.?
65%
How much GDP do small businesses create?
More than 1/2
How much of all U.S. exports of goods and services do small businesses make up?
About 1/3
How do small businesses contribute to the economy?
they foster innovation, they help bugger companies (i.e. supplying goods/services for a large corporation), and they help consumers by supplying products and services that large companies can or will not
How do small businesses contribute to the Workforce?
They create over 65% of new jobs each year, they employ many who do not fit into a traditional corporate structure, and they provide opportunities for woman and minorities
What are some traits of a successful entrepreneur?
Innovative, risk takers, motivated, flexible, work well with others, good leadership skills, "system thinkers
What are the different types of entrepreneurs?
Lifestyle entrepreneur, micropreneurs, home-based entrepreneurs, internet entrepreneur, growth entrepreneurs, intrapreneurs, social entrepreneurs and social intrapreneurs, and entrepreneurial teams
What are the Pros of starting a new business?
you're not hampered down by the previous image or equipment of an existing business, you can chose your own location, logo, and build your own relationships, and you can explore new markets and directions
What are some cons of starting a new business?
you have no existing customer base to build on, you're taking a bigger risk than if you were buying an existing business, and because your business has no track record, it will be harder to find financing
What are the pros of buying an existing business?
You gain an established customer base, location, and supplier relationships, the business is a known entity with a proven formula and name recognition, you can view the business's records before buying to make sure its profitable, and since the business h
What are the cons of buying an existing business?
Hidden problems with the business could come back to haunt you, the business may have a bad reputation, the business's inventory could be obsolete, employees may be loyal to the former owner causing management issues, and there's no guarantee the business
What is franchising?
A license to sell another's products or to use another's name in business or both
What are some pros of buying a franchise?
1. become part of a system with a well-known image or proven products or services
2. marketing and sales power of the franchisor behind you
3. you get training and guidance from the franchisor
4. You're apart of a network and can turn to other franchisees
What are some cons of buying a franchise?
1. not a much freedom as an independent business owner
2. must pay ongoing royalties and other fees
3. must sign a binding contract that limits your ability to exit the business
4. The franchisor's problems -- whether financial, image, or otherwise -- are
Why do small businesses fail?
Accumulating too much debt, inadequate management, poor planning, and unanticipated personal sacrifices
What is a key trait of an entrepreneur?
a. flexibility
b. Creative thinking
c. risk taking
d. all of the above
D
Sally started her business venture five years ago. The business now operates in three locations and her sale have increased by 20% every year, which is exactly what Sally had in mind. Which type of entrepreneur best describes Sally?
a. social
b. lifestyle
D
One of the first things someone needs to do before starting a business is to write which of the following?
a. business plan
b. loan application
c. partnership statement
d. franchise agreement
A
Which of the following is not a characteristic of a small business?
a. they generally have between 500 and 1,000 employees
b. on average, the annual revenue is $6.5 million
c. it is independently owned and operates
d. it is not a considered a dominant pla
A
Steven Ye wants to start a company. He has a rough draft of his business plan and some tentative funding but needs some additional advice and guidance to help him through the start-up process. The best source for steve is
a. an angel investor
b. a SCORE v
B
Kazuto is interested in starting a new business. Which is a reason Kazuto should consider a franchise over starting a business from scratch?
a. he will operate a tried and tested business strategy
b. he will be able to make all the decisions
c. he will ne
A
Wayland wants to open up a deli, but doesn't want the risk of opening one up from scratch. There is a deli in the area that the owner is selling, but the owner has put too high a value on the business's goodwill. Goodwill is:
a. the value of the left-over
C
Rebecca needs about $500,000 to take the idea further and perhaps sell it to other pet groomers. Which is the most likely source of financing that Rebecca could use?
a. credit cards
b. line of credit
c. funds from an angel investor
d. venture capital fina
C
Which of the following factors commonly leads to small business failures?
a. not enough planning
b. too much accumulated debt
c. unanticipated personal sacrifices
d. all of the above
D
Rashid is starting a consulting business. He doesn't want to rent an office right now, but he needs a receptionist, a place to meet clients, and other aspects of an office. A good solution for Rashid to consider would be a(n):
a. mentoring group
b. adviso
C
T or F: Being a part of a franchise allows you to have access to tried and true marketing strategies?
T
T or F: A social intrapreneur is someone who provides funding for those in third-world countries who want to begin their own businesses but have no capital with which to do so:
F
T or F: According to the SBA, to be considered a small business, a company can have only one location:
F
T or F: A growth entrepreneur is best described as one who starts a business in the agricultural industry:
F
T or F: Credit cards can be a convenient way to help finance business expenses as long as the balances are paid in full every month:
T