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Exam 6: Entrepreneurship and Starting a Small Business

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Question 21

True/False

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The burst of the dot com bubble caused venture capitalists to limit their funding of new businesses.

A) True
B) False

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Question 22

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Only about 10% of all businesses qualify as small businesses using the definition of the Small Business Administration.

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B) False

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Question 23

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A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a:

Prospective entrepreneurs turned down by private lenders have little hope of getting financial help from the Small Business Administration,since the SBA's standards are even tougher than those of private lenders. The SBA offers a number of programs to help finance small businesses that have difficulty obtaining loans from private sources.Sometimes the SBA will offer direct loans,sometimes it will guarantee private loans,and other times it will combine both of these approaches.

Offering to manage an established business for a percentage of the profits plus a salary offers experience to the would-be entrepreneur and free time to the business owner.

Successful entrepreneurial teams:

Small business owners interested in finding out more about exporting will find that:

While Jing wants to start a small business,she has not yet uncovered an opportunity that would offer her security and the likelihood of high profits.Jing will likely find that one must risk more in order to attain high profits. Firms that offer security seldom offer the potential for rapid growth and high profits,while firms that offer high profits tend to be associated with high levels of risk.

From a competitive standpoint,small businesses cannot expect to successfully compete with large corporations in international markets. Small businesses have certain advantages over larger rivals in international markets.Overseas buyers often prefer to deal with individuals rather than corporate bureaucracies.Moreover,small businesses can often begin shipping faster and offer more personal service.

Entrepreneurial teams increase the cooperation between marketing,production and other functional areas of a business venture. In entrepreneurial teams,all members work together to conceive,make,and market a new product or service.A team may be better than an individual entrepreneur because team members can combine creative skills with production and marketing skills right from the start.

Individuals desiring to learn about small business operations are advised to learn from other entrepreneurs.

As a small business owner,Tanika can't afford to provide her employees with the high wages and benefits offered by big corporations.One way to retain her employees and create a high level of motivation would be to:

A National Business Incubator Association study indicates that over 80 percent of incubator graduates remain in business.

Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture?

The two primary concerns of an entrepreneur starting a new business are planning and record keeping.

Economist Bruce Kirchhoff contends that business failures are much lower than traditionally reported.

After several years of working as a regional manager for a nationally known nonprofit,Janelle landed a management position with an innovative small business.If she accepts the job offer,she is likely to find that:

According to SBA guidelines,a manufacturing firm with 1,000 employees:

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:

The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments.