Chapters 5 & 6

Question 0

Business plan

Answer 0

Your plan on how to get your business started

Question 1

Entrepreneur

Answer 1

A person who recognizes business opportunity and organizes, manages, and assumes the risks of a business enterprise

Question 2

Small business

Answer 2

An independently owned business that usually has the owner as its manager

Question 3

Profit

Answer 3

Money left over free a business has paid all costs of producing its goods and services

Question 4

What part of a business is the owner responsible for?

Answer 4

All of it

Question 5

List some disadvantages of being an entrepreneur

Answer 5

• total responsibility of the business
• long hours
• financial risks

Question 6

Why do some small businesses fail?

Answer 6

They don’t get enough profit and they end up spending more then they are actually selling

Question 7

A small business employs more ores than 500 people?

Answer 7

Less

Question 8

Most businesses in the US are what?

Answer 8

Small businesses

Question 9

How many out of five businesses fail within the first five years?

Answer 9

Four

Question 10

What percentage are successful businesses?

Answer 10

20%

Question 11

How long does it take to prepare a good business plan?

Answer 11

More than 5 months

Question 12

Sale proprietorship

Answer 12

Business owned by only one person

Question 13

Partnership

Answer 13

Business owned by many people but treated by law as one person

Question 14

Corporation

Answer 14

Business owned by many people but treated by law as one person

Question 15

Stocks

Answer 15

Shares of ownership in your corporation

Question 16

Limited liability

Answer 16

If your company loses money, the stockholders lose only what they invested

Question 17

Nonprofit organization

Answer 17

Type I business that focuses on providing a service rather than making a profit

Question 18

Cooperative

Answer 18

An organization owned and operated by its members for the purpose of saving money on the purchase of certain goods and services

Question 19

Processor

Answer 19

Change raw materials into more finished products

Question 20

Retailer

Answer 20

Purchases goods from a wholesaler and resells them to the consumer or the final buyer of the goods

Question 21

Intermediary

Answer 21

Business that moves goods from one business to another

Question 22

Service industry

Answer 22

A business that does work for a customer, and occasionally provides goods, but is not involved in manufacturing

Question 23

Wholesaler

Answer 23

Distributes goods

Question 24

What is a corporation controlled by?

Answer 24

Board of directors

Question 25

Who owns the corporation?

Answer 25

Several people

Question 26

Example of a nonprofit organization

Answer 26

American Red Cross

Question 27

Does a nonprofit organization pay taxes?

Answer 27

No

Question 28

What is he main advantage of a partnership?

Answer 28

More owners can contribute to the business

Question 29

Give one example of a cooperative

Answer 29

Ocean spray

Question 30

Describe three advantages and three disadvantages of owning a franchise

Answer 30

Advantages: easy to start, rely on proven methods and product of parent company, and name of parent company can get you more customers.
Disadvantages: very strict how business is run, must operate like every other franchise, and might be limited to what products you can offer

Question 31

Name at least five skills and attributes that and entrepreneur needs to be successful

Answer 31

Risk taker
Need for achievement 
Willingness to work hard
Self confidence
Desire to control own destiny