Reasons to develop a business plan even if you don't need financing includeall of these EXCEPT:

helps in planning for income taxes

Small business owners

usually get information from customers about likes/dislikes.

Small businesses have an advantage over big businesses when customers

want more individual attention.

The most successful small business owners

have good relationships with bankers, lawyers, accountants.

Of all new businesses,

1/3 are profitable, 1/3 do not profit, and 1/3 lose $$.

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Business Principles A Chapter 6--Entrepreneurship

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Chapter 6 BPA

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Questions 24

Answers

1
If you start a new business, you need information about
all of the answers.
government regulations.
customers.
competitors.
2
All of these are reasons a business started by an entrepreneur might close EXCEPT
poor recordkeeping
selling too many products
higher than expected expenses
low sales
3
Reasons to develop a business plan even if you don't need financing includeall of these EXCEPT:
forced to think about important activities
may identify potential problems
serves as a guide to keep the business on track
helps in planning for income taxes
4
Scrubbles laundry detergent recently added a new ingredient. This is an example of
opportunity cost.
innovation.
improvement.
invention.
5
___ capital is money provided by large investors to finance new products and businesses.
Venture
Corporate
Partner
Executive
6
Short-term financing is obtained for a period of less than
two years.
three months.
one year.
six months.
7
Which element of a business plan discusses the entrepreneur's goals for the business?
financial plans
description of the business
customer analysis
8
According to the SBA, a small business is an independent business with fewer than __ employees,
100
500
50
10
9
A(n) ___ is an invention or creation that is brand new.
innovation
improvement
copyright
entrepreneur
10
All of these would be discussed in the operations plan section of a business plan EXCEPT?
organization of the company
human resource plans
sales forecasts
analysis of resources needed
11
Small business owners
focus on products that meet needs of large customer groups.
have less frequent contact w/ customers than large business.
usually get information from customers about likes/dislikes.
rely heavily on consumer research to gather information.
12
A(n) ___ is someone who takes a risk in starting a business to earn a profit.
entrepreneurship
business person
corporate executive
CEO
13
Location is important to small retail businesses because
customers do not travel long distances for their needs.
all of the answers.
customers stay away if the business is not easy to find.
most retailers need good customer traffic to survive.
14
More than __ new businesses are created in the United States every year.
500 thousand
750 thousand
1 million
2 million
15
The first step in developing a business plan is to
gather and review information.
write the introductory section.
develop the "game plan."
identify alternative plans for production and marketing.
16
What element of business plan discusses the entrepreneurs short/long term goal for the business
customer analysis
description of the business
financial plans
description of the competition
17
All of these are common categories of small businesses EXCEPT:
construction and health care
hotels and restaurants
corporations
professional, technical, and scientific services
18
Most of the money needed to start a new business comes from
The entrepreneur and his/her family and friends.
personal and business loans.
credit given selling products and services to the business.
the sale of stock.
19
Small businesses account for ___ of the US gross domestic product each year.
about 75 percent
about 10 percent
more than half
almost 25 percent
20
Small businesses have an advantage over big businesses when customers
all of the above.
prefer low cost and efficient delivery.
want more individual attention.
are willing to buy standard products.
21
All of the following describe a typical small business EXCEPT:
It serves a small market.
It is dominant in its field.
It operates in one or very few locations.
The owner is usually the manager.
22
The most successful small business owners
do not need to choose employees carefully; they give orders.
have never worked for anyone else before.
have good relationships with bankers, lawyers, accountants.
understand a written business plan is a waste of time/money.
23
All of the following EXCEPT ___ are sources of funding for new businesses.
venture capital
the government
the entrepreneur and family/friends
loans from banks
24
Of all new businesses,
1/3 are profitable, 1/3 do not profit, and 1/3 lose $$.
about 1/4 are profitable and 3/4 lose money.
about 3/4 are profitable and 1/4 lose money.
about 1/2 are profitable, 1/4 do no profit, and 1/4 lose $$.

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