Exam 5: Entrepreneurs and Small Businesses

One of the safest ways to finance your business is to borrow against a personal asset, such as your retirement account.

The sole purpose of the Small Business Administration is to cater to the needs of small businesses.

Which of the following statements BEST explains why an initial purchase price of an existing business could be higher than the immediate up-front costs associated with a startup?

Which of the following is NOT an advantage of buying an existing business?

________ support(s)startup businesses by offering resources such as administrative and technical support and business networking.

Which of the following is an example of the role that small businesses can play in fostering innovation?

If you were a venture capitalist, which of the following startup businesses would you be most likely to fund?

Since Donna was laid off from her job a few months ago, she has enjoyed having more time to relax, exercise, and be with her family. Now she is wondering whether she should start her own business. Donna should consider purchasing a franchise ONLY if she ________.

Which of the following is NOT a symptom of potential small business failure?

Franchises are independent third-party operators who market and sell a company's products or services under the company's name.

Banks may offer lines of credit to help the new business owner ________.

Joe is very confident about his purchase of a franchise from a well-known full-service restaurant company. What is one of the things he MOST likely did before he bought the franchise?

An advisory board is composed of ________.

Timothy is the 60-year-old founder of a publishing company that has over $2 million in annual gross sales. Is he eligible to have a mentor through the Entrepreneurs Organization?

Ever since Kim opened her own nail salon, she has made all important decisions about how it is run. She recently launched a Web site to market her services and a new line of organic nail products. Which reason for starting a small business is BEST displayed by Kim's situation?

The fastest way to start a business is to create a limited liability company.

Harvard student Mark Zuckerberg came up with the idea for Facebook as a way to provide a forum for students on his college campus to network and display pictures of themselves and their friends. Today, Facebook has a market value of approximately $750 million and media giants such as Google and Yahoo have been trying to outbid each other for ownership. What reason for starting a small business does the creation of Facebook BEST represent?

A ________ is a formal document that states the goals of the business as well as the intended process for reaching those goals.

Sam is eager to start a local magazine that will include articles about health and fitness and provide a place for local health and fitness professionals to advertise their services. Which of the following does he NOT need to include in his business plan?

Maria is the owner of Pet Heaven, a new pet daycare, grooming and boarding business. Maria envisions her business expanding to five locations in her state within three years. To help her succeed, which of the following does Maria MOST need?