Exam 2 Flashcards
1) According to the Small Business Administration, a small business is
defined as a company that ________.
A) is any independent firm with fewer than 500 employees
2) Which of the following is an example of a lifestyle business?
A) A self-employed landscape designer
3) Small companies tend to differ from large ones because ________.
C) they can react to market changes and make decisions more quickly than larger companies
4) How do small businesses help to support the needs of larger
organizations?
B) Small businesses act as serving agents and suppliers to larger
corporations.
5) What is one major advantage of a small firm over a large firm?
B) Freedom to innovate and move quickly
The positive, forward-thinking desire to create a profitable, sustainable
business is called ________.
E) entrepreneurial spirit
7) Which of the following is a quality that a successful entrepreneur is most
likely to have?
C) Passion for a new product or idea
8) Intrapreneurship refers to ________.
D) entrepreneurial efforts within a larger organization
9) Why is an innovative spirit harder to have in a larger company?
D) Large firms are more analytical and careful as they mature.
10) How can a large firm foster an entrepreneurial spirit within the
organization?
A) Reward risky behavior that might lead to innovation.
11) Entrepreneurs often have a talent for inspiring others, and are driven by
a(n) ________ to succeed.
E) passion
12) The summary section of a business plan should include a(n) ________
which defines how it will generate revenue and produce a profit.
E) business model
13) Which of the following is an advantage of buying into a franchise
system?
A) It requires very little risk.
B) It comes with an established business system.
C) It allows the owner to have a very high level of freedom.
D) It requires the owner to establish brand recognition from scratch.
E) It comes with a workforce.
B) It comes with an established business system.
14) A business plan is a written document that summarizes the ________.
E) proposed business venture, goals, and plans for achieving those goals
15) Preparing a business plan serves which of the following functions?
B) It helps persuade lenders and investors to finance the business.
16) A business plan indicates that investors will be able to sell their
investment through a public stock offering, or participate in a buyback of
the investors’ interest. This is an example of which of the following
elements of a business plan?
A) Exit strategy
B) Target market
C) Operations plan
D) Marketing strategy
E) Start-up schedule
A) Exit Strategy
17) Which of the following requires less work and less risk because there is an established customer base?
A) Buying an existing business
18) Which of the following combines the benefits of independent business
ownership with the support of a large organization?
A) Buying a franchise
) Which of the following should indicate the business plan for a new
company and be compelling enough to entice an investor into reading
more?
A) Marketing strategy
B) Company overview
C) Products or services
D) Summary
E) Mission and objectives
D) Summary
20) Which of the following should be developed to present a concise
overview of a business plan to investors?
A) Executive summary
21) Data that will persuade an investor that you understand the strengths
and weaknesses of your competitors can be found in which section of the
business plan?
C) Target market
22) At the federal level, small businesses can apply for loans backed by the
________.
E) Small Business Administration (SBA)
23) A(n) ________ is a form of “group mentoring” in which you assemble a
team of people with subject-area expertise or vital contacts to help review
plans and decisions.
D) advisory board
25) ________ help an entrepreneurial team develop an idea into a workable
business model.
A) Business incubators
