AKS 6 Notes Review

What is one of the first steps in starting a business?

• Get a loan

• Write a business plan

• Choose a location

• Advertise the business

What are the two main reasons to acquire money for a company?

• Running operations and expanding facilities

• Marketing and running operations

• Buying supplies and hiring employees

• Running operations and expanding production

What is the initial capital used for in a business?

• Paying debts

• Covering startup costs

• Funding marketing campaigns

• Hiring employees

What is a key difference between equity and debt funding?

• Equity funding requires full repayment

• Debt funding involves selling shares

• Equity funding comes from investors; debt funding requires repayment

• Debt funding offers ownership stakes in the company

What is NOT a valid source of a business loan?

• Family members

• Personal savings

• Office equipment as collateral

• Commercial finance companies

What is the first step in securing a loan?

• Checking your credit report

• Writing a loan package

• Finding collateral

• Applying to multiple lenders

What type of collateral is accepted for loans?

• Perishable inventories

• Cars

• Stocks and bonds

• Jewelry

What does "cash flow" refer to in a business?

• Profits made in a year

• Revenue generated during a specific period

• Money being transferred in and out of the business

• Total expenses paid by the company

What does a lender look at to determine loan eligibility?

• Profit margins and inventory

• Business location and assets

• Credit score and financial statements

• Loan purpose and repayment history

Why do businesses run market surveys?

• To test advertising effectiveness

• To understand customer needs and wants

• To find new locations for expansion

• To monitor competitor pricing