Chapter 5

Question 1

entrepreneur

Answer 1

someone who identifies a business opportunity and assumes the risk of creating and running a business to take advantage of it.

Question 2

3 Characteristics of Entrepreneurial Activity

Answer 2

Innovating
Running a Business
Risk Taking

Question 3

5 Advantages to being a Small Business Owner

Answer 3

Be your own boss.
Accommodate a desired lifestyle.
Achieve financial independence.
Enjoy creative freedom.
Use your skills and knowledge.

Question 4

Lifestyle Business

Answer 4

people who start businesses for the purpose of providing an income for themselves and their families.

Question 5

Small Business

Answer 5

independently owned and operated, exerts little influence in its industry, and (with minimal exceptions) has fewer than five hundred employees.

Question 6

Small Businesses help to:

Answer 6

Create jobs
Spark innovation
Provide opportunities for women and minorities to achieve financial success and independence

Question 7

Industry

Answer 7

a group of companies that compete with one another to sell similar products.

Question 8

Retailers

Answer 8

buy goods from other firms and resell them to consumers, in stores, by phone, through direct mailings, or over the Internet.

Question 9

Disadvantages to starting a small business

Answer 9

Financial Risk
Stress
Time Commitment
Undesirable Duties

Question 10

Business Plan

Answer 10

a document that identifies the goals of your proposed business and explains how it will achieve them.

Question 11

Ways to start a small business

Answer 11

Starting from Scratch
Buying an existing business
Buying a franchise

Question 12

Reasons small business fail:

Answer 12

Bad Business Idea
Cash Flow Problems
Lack of Customer Focus
Inability to handle growth

Question 13

SBDC (Small Business Development Centers)

Answer 13

matches businesspeople needing advice with teams of retired executives who work as volunteers through the SCORE program.