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EC-EM > NATURE OF A SMALL BUSINESS > Flashcards

NATURE OF A SMALL BUSINESS Flashcards

1
Q

“People with large amounts of financial capacity (capital) are only a few, so there is little possible engagement in entrepreneurship.” TRUE or FALSE

A

TRUE

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2
Q

“People with small amounts of financial capacity (capital) are large, so there many possible engagements in entrepreneurship.” TRUE or FALSE

A

TRUE

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3
Q

Small business may be defined by using any of the two approaches:

A

Market share or total assets

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4
Q

Small business may be defined as one which is independently owned and operated and which is not dominant in its field of operation.

A

Market sharer approach

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5
Q

Ownership is by a private individual, a partnership, or a corporation

A

Independently owned

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6
Q

Indicates that a small business does not control a sizable share of its market.

A

“not dominant”

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7
Q

When the total sale of a business firm is less than one percent of the total demand for its products, the firm may be considered small business.

A

TRUE

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8
Q

As one having total asset that fall within a certain bracket. For example, the Magna Carta for small Enterprise (R. A. 6977) indicates that the firm must have total assets valued at above Php 1.5 million to Php 15million to be considered small business. The government prefers this approach because it simplifies formulation and implementation of policy.

A

Total Assets Approach

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9
Q

One of the disadvantage of the total assets approach is that asset values are affected by inflation.Inflation alters the nominal value of business assets and what may be previously considered small business may no longer be classified as such.

A

TRUE

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10
Q

From the point of view of business management, the market share approach in defining small business is more appropriate. This is so because the target market share is an objective more basic than other objectives.

A

TRUE

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11
Q

Kinds of Business According to Size

A

Public Enterprises
Private enterprises

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12
Q

5 Kinds of Private Enterprise

A
  1. Micro Business
  2. Cottage Business
  3. Small Business
  4. Medium Business
  5. Large Business
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13
Q

Types of Small Business

A
  1. manufacturing
  2. service
  3. wholesaling
  4. retailing
  5. general construction firms
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14
Q

Involved in the conversion of raw materials into products needed by society.

A

Manufacturing Business

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15
Q

Those that provide service in one way or another.

A

Service business

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16
Q

Service business may be classified into the ff:

A
  1. Business services
  2. Personal services
  3. Repair services
  4. Entertainment and recreation
  5. Hotels and motels
  6. Education services
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17
Q

Provide service to other business.

A

Business service

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18
Q

Provide service to the person

A

Personal service

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19
Q

Provide repair services to owners of various machinery

A

Repair service

20
Q

Includes movie houses, resorts, billiard pool centers

A

Entertainment and recreation

21
Q

Include Montessori schools for children, high school, correspondence schools, among others.

A

Educational services

22
Q

Refers to the activities of persons or establishments which sell to retailers and other merchants, and / or to industrial, institutional, and commercial users, but who do not sell in large amounts to final consumers.

A

Wholesaling

23
Q

Covers all activities involved in the sale of goods and services to the final consumers.

A

Retailing

24
Q

The bulk of retailing activities are performed by small businesses.

A

TRUE

25
Q

Engaged in the construction of buildings whether for private individuals or firms, or for the government. Many of them perform subcontracting jobs for the bigger contractors.
- employ hundreds of thousands of people and they operate mostly in the countryside.

A

General construction firms.

26
Q

Small businesses are the ff:

A
  1. Independent management
  2. Small capital requirement
  3. Mostly local operation
27
Q

The owner is also the manager

A

Independent management

28
Q

Small business requires only small capital and this can be supplied by a single or a few individuals.

A

Small capital requirement

29
Q

Small business usually operates in a certain locality although there are cases when the market is not confined to a local area.

A

Mostly local operation

30
Q

Small businesses play an important role in the development or our economy. They assume the ff functions:

A
  1. providers of economic opportunities for entrepreneurs
  2. providers of products and services to consumers
  3. suppliers of products and services to other businesses
  4. distributors of products and services to other businesses
  5. supporters of government
  6. providers of employment
31
Q

People who do not feel comfortable as employees have the option of engaging in small business operation

A

Provide of economic opportunities for entrepreneurs

32
Q

The production of many products and services is oftentimes not feasible with big and medium business operation. These limited opportunities are naturally fitted for small businesses.

A

Providers of products and services to consumers

33
Q

Some businesses require raw materials, semi-finished parts, finished components, or even labor, which they cannot economically produce. The small business perform this task for them

A

Supplier of products and services to other businesses

34
Q

Some manufacturers do not have the ability to distribute their products and services. Many small businesses assume this role for them.

A

Distributors of products and services of other businesses

35
Q

Small businesses support the government with the taxes they pay, as well as performing other functions.

A

Supporters of government

36
Q

A large proportion of the labor force are employed by small businesses

A

Providers of employment

37
Q

An individual has various options to improve his economic lot. They are the ff:

A
  1. be an employee
  2. be a professional;
  3. be a small business operator (SBO)
38
Q

Provider of:
- economic opportunities for entrepreneurs
- products and services to consumers
-funds to the government in the form of taxes
- employment to the labor force
Supplier of :
- products and services to other businesses
Distributor of :
- products and services produced by large firms

A

Small Business

39
Q

A professional may generate higher income through the effective practice of his profession. His income, however, is limited by the number of patients he attends to every day as he cannot delegate his skill to others.

A

TRUE

40
Q

A small business operator keeps long working hours and absorbs whatever damages that happen as a result of his faulty decision-making. However, he is afforded to the ff benefits:

A
  1. Opportunity to gain control over his destiny.
  2. Opportunity to reach his full potential.
  3. Opportunity to reap unlimited profits, and
  4. Opportunity to make a contribution to society and receive recognition for his efforts.
41
Q

Prospective small business owner can choose from several business opportunities that he would like to take advantage of.

A

Opportunity to gain control over his own destiny

42
Q

The employee will do his work based on prescribed targets which may only require less than his full potential.

A

Opportunity to reach full potential

43
Q

If the small business succeeds, all profits, big or small, accrue to the owner.

A

Opportunity to reap unlimited profit

44
Q

Entrepreneurs who make innovative products available to the public are recognized properly by society.

A

Opportunity to make a contribution to society and receive recognition for his efforts

45
Q

Although certain advantages accrue to the small business operator, there are certain disadvantages that must be considered. these are the ff:

A
  1. uncertainty of income
  2. risk of losing your entire capital investment;
  3. lower quality of life until the business gets established;
  4. complete responsibility;
  5. having to serve undesirable costumers;
  6. paperwork and other chores; and
  7. long hours and demanding work condition
46
Q

Small businesses play an important role in the development of our economy. They provide economic opportunities for entrepreneurs, products and services to consumers and industrial users, services to other firms by way of distributing their products and services, payment of taxes to the government, and employment.

A

TRUE

47
Q
A

EC-EM (5 decks)

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