Chapter 5

Question 1

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

Answer 1

entrepreneurship

Question 2

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

Answer 2

franchise

Question 3

The purchaser of a franchise.

Answer 3

franchisee

Question 4

Franchiser

Answer 4

The company that sells a franchise.

Question 5

Individuals in large firms who take responsibility for the development of innovations within the organizations.

Answer 5

intrapreneurs

Question 6

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

Answer 6

small business

Question 7

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

Answer 7

Small Business Administration (SBA)

Question 8

The lack of funds to operate a business normally.

Answer 8

undercapitalization

Question 9

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

Answer 9

venture capitalists

Question 10

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

Answer 10

business plan