Chapter 5

Question 1

Business plan

Answer 1

A precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals

Question 2

Entrepreneurship

Answer 2

The process of creating and managing a business to achieve desired objectives

Question 3

Franchise

Answer 3

A license to sell another’s products or to use another’s name in business, or both

Question 4

Franchisee

Answer 4

The purchaser of a franchise

Question 5

Franchiser

Answer 5

The company that sells a franchise

Question 6

Intrapreneurs

Answer 6

Individuals in large firms who take responsibility for the development and innovations within the organization

Question 7

Microentrepreneurs

Answer 7

Entrepreneurs who develop businesses with the five or fewer employees

Question 8

Sharing economy

Answer 8

An economic model involving the sharing of underutilized resources

Question 9

Small business

Answer 9

Any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people

Question 10

Small Business Administration (SBA)

Answer 10

An independent agency of the federal government that offers managerial and financial assistance to small businesses

Question 11

Social entrepreneurs

Answer 11

Individuals who use entrepreneurship to address social problems

Question 12

Undercapitalization

Answer 12

The lack of funds to operate a business normally

Question 13

Venture Capitalists

Answer 13

Persons or organizations that agree to provide some funds for a new business in exchange for an ownership interest or shock