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Exam 6: Entrepreneurship and Starting a Small Business

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Question 81

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The Small Business Administration's microloan program offers small businesses very small loans.

A) True
B) False

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Question 82

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A business is considered small by comparing its size to others in the same industry.

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B) False

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Question 83

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Juanita wants to operate her own business.Although she admits it would be nice to earn a healthy profit,her primary motivation is the excitement and challenge of starting and running a business.Juanita's attitude is different from most small business owners,who usually focus solely on the earnings potential of their ventures,as well as the opportunity to acquire power and prestige. Many factors motivate entrepreneurs,including the challenges and opportunities of starting and operating their own business.Additionally,most entrepreneurs seek a sense of achievement rather than power.

In order to improve his chances of small business success,Demitri prepared a business plan.Most often,a positive outcome of this exercise is:

As a prospective entrepreneur,Ebony considered a variety of financing sources.Her discussions with a venture capitalist revealed that this type of investor expects to receive a significant ownership interest in her firm. Venture capitalists sometimes ask for as much as a 60% stake in a business.

The only real barrier preventing small businesses from exporting is insufficient knowledge of the opportunities available. Although many small businesses could profit from going international,there are some serious barriers to small business exporting.Financing is often hard to obtain,dealing with the bureaucratic paperwork involved in international transactions can be daunting,and the need to adjust to cultural differences can complicate marketing efforts.

The business plan will include _____________.

Independence,challenge,and opportunity are among the key reasons given by those who assume the risks of entrepreneurship. Many factors encourage people to accept the risks associated with entrepreneurship,including the opportunities,independence,and challenges associated with starting and operating a business.Clearly the potential of profits is also a great motivator for entrepreneurs.

Small businesses can often provide more personalized customer service than bigger rivals.

Adequate funding for a small business venture insures its success.

A business's size is measured:

Many small business owners report that they needed assistance with accounting when they first started businesses.

Enterprise zones are:

The Internet has slowed small businesses participation in international markets.

There are several ethical considerations when starting a business,but competing against current and former work relationships is always fair game. Similar to managers who work for large organizations,small business owners/managers must consider ethics when making decisions.The Making Ethical Decisions box depicts a situation where two employees plan to quit their jobs and create a business that directly competes against their current employer.Although they have a right to create a business and compete,how do they ethically compete for the same customers that their former employer serves?

Mini-Case Peppy Roaney believes that pizza is a much more versatile dish than most people realize.As the national marketing manager for Pizza Guys,he observed how consumers were delighted with barbecue pizza,Hawaiian pizza,Mexican pizza and other unique combinations.His suggestions for other unusual pizzas,however,were met with a negative response by his superiors.Even some of his colleagues laughed at his ideas.Peppy's confidence in his ability to understand the market has led him to focus on planning a business of his own.Peppy realizes that he will take a risk when he leaves his job with Pizza Guys and embarks upon a new venture: Peppy's Pizzazzeria.Peppy is excited about the potential of profitably catering to the unmet desires of pizza consumers. -Due to the fact that Peppy has worked in the field of marketing for a large corporation,

Corporate downsizing reduces the opportunities for home-based businesses.

Anna recently left a large insurance firm and opened a home-based business preparing medical transcriptions for doctors.Based on recent statistics,she can expect:

To be considered part of a market,an individual must:

Jake wants to sell his workout DVDs in European,Asian,and Latin American countries._______________ will help him reach vendors abroad,without the expense of traveling to meet them face-to-face.