Small Business, Entrepreneurship, and Franchises

Which of the following businesses would not be considered a small business?

• A car repair shop with over $250,000 in revenue and eight employees

• A real estate development company with $100 million in revenue and 54 employees

• A manufacturing firm with $17 million in revenue and 95 employees

• A wholesale trade company with $1 million in profit and 300 employees

Small businesses are important to the U.S. economy for all of the following reasons except _____.

• pay 40 percent of total U.S. private payroll

• they have generated 50 percent of net new jobs over the past 20 years

• they employ about half of all private-sector employees

• that they represent 99.9 percent of all employer firms

Frustrated that she was working many hours for someone else, Morgan decided to start her own business. She could work when she wanted to and take a day off as needed instead of having to work on a set schedule. Morgan was likely influenced by ____ when starting her own business.

• money

• age

• family

• independence

______ entrepreneurs own 42 percent of all businesses.

• Black

• Women

• Immigrants

• Teen

Portia knows the customers of her hat shop by name and knows each of their preferences. What small business advantage does this demonstrate?

• Personal relationships with customers

• Simplified record keeping

• Ability to adapt to change

• Independence

Sriranjani has a motorcycle and ATV store. Her customers often talk about trikes. Sriranjani orders some Harley-Davidson Trikes for her inventory. Her actions are possible because small businesses _____.

• have personal relationships with customers

• have simplified record keeping

• have the ability to quickly adapt to change

• can keep all profits

Giovanni would like to start his own business, but he has very little savings. Additionally, his family isn’t willing to invest any money into his business because they fear it may fail. Giovanni’s bank is also unwilling to provide a loan that is large enough to start the business. This is an example of which disadvantage of small business?

• Risk of failure

• Inability to adapt to change

• Limited potential

• Limited ability to raise capital

Kushi has collected money from savings, family investments, and bank loans in order to start her own florist shop. She is optimistic that her business will be a success because she loves arranging flowers and receives many likes and comments when she posts her designs online. Kushi asks you, a business major, what advice you have about starting a business. Which of the following is correct information you can share with Kushi?

• Small businesses inherently possess the ability to expand.

• Most small businesses generate a profit in their first year of operation.

• Entrepreneurs should always adopt a “fast growth” mindset.

• Starting a small business requires much more than optimism and a good idea.

Bhavika has created a business plan as part of an assignment for her entrepreneurship class. Her plan is for a screen-printing business. In the _____ section of the business plan, Bhavika discusses current competition, pricing, and promotion.

• Company and Industry

• Introduction

• Marketing Plan

• Benefits to the Community

Malik must submit a business plan with his loan application. He has just finished the section of the plan that discusses the weaknesses of the business and how he plans to deal with those. Malik has just completed the _____ section.

• Company and Industry

• Critical Risks and Assumptions

• Executive Summary

• Financial Plan