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Chapter 6 Review

Chapter 6 Review. MC. Most business plans are updated (a) every six months (b) annually (c) every five years (d) whenever the business hires a new employee. B. True or False. Most successful entrepreneurs have a low tolerance for ambiguity. True. MC.

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Chapter 6 Review

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  1. Chapter 6 Review

  2. MC • Most business plans are updated (a) every six months (b) annually (c) every five years (d) whenever the business hires a new employee. • B

  3. True or False • Most successful entrepreneurs have a low tolerance for ambiguity. • True

  4. MC • A good example of an entrepreneur is a(n) (a) police officer (b) UPS delivery driver (c) gift shop owner (d) checkout clerk at Target. • C

  5. Fill in the Blank • Professional, scientific, and technical services account for the largest percentage of small businesses in the Untied States.

  6. True or False • Many entrepreneurs own their first business while in their teens. • True

  7. MC • New businesses are often discontinued because of (a) low sales (b) competitive pressure (c) higher than expected expenses (d) all of the above. • D

  8. Fill in the Blank • Small businesses are responsible for almost 50 percent of the U.S. gross domestic product each year.

  9. True or False • Most of the money needed to start a new business comes from the entrepreneur and his or her family and friends. • True

  10. MC • Personal characteristics of successful entrepreneurs include (a) persistence (b) recklessness (c) greed (d) pessimism. • A

  11. Fill in the Blank • Entrepreneurship is the process of starting, organizing, managing, and assuming the responsibility for a business.

  12. True or False • The American private enterprise system discourages risk-taking and innovation. • False

  13. MC • The business idea, ownership structure, and the business’s long-term goals are discussed in this section of a business plan. (a) financial plan (b) marketing plan (c) operations plan (d) description of the business. • D

  14. Fill in the Blank • A written description of a business idea and how it will be carried out is called a(n) business plan.

  15. True or False • Most Americans are employed by a small business. • False

  16. MC • According to the Small Business Administration, a small business is an independent business with fewer than ___ employees (a) 500 (b) 100 (c) 50 (d) 10. • A

  17. True or False • Many small businesses fail simply because the owners do not keep adequate records. • True

  18. MC • Business ideas can come from (a) books and magazines (b) business experiences (c) hobbies and interests (d) all of the above. • D

  19. True or False • A large number of small businesses in the United States are service businesses. • True

  20. MC • What percentage of U.S. small businesses are owned by women? (a) about 75 percent (b) almost 50 percent (c) more than 25 percent (d) close to 10 percent. • C

  21. True or False • It is not wise to start a new business when demand for the product or service you plan to sell is high, because already-established companies will have a clear advantage over you. • False

  22. True or False • The most important step in starting a business is developing confidence. • False

  23. MC • Small businesses (a) must focus on products and services that meet the needs of a large group of customers as possible (b) have an advantage when customers want more individual attention (c) are generally forced to sell products and services at lower prices than large businesses to compete effectively (d) all of the above. • B

  24. Fill in the Blank • Start-up financing is the amount of money needed to open a new business.

  25. True or False • The first step in developing a business plan is to gather and review information. • True

  26. MC • Nearly ___ percent of all Americans aged 18–64 is involved in some type of entrepreneurial activity. (a) 5 (b) 10 (c) 25 (d) 50. • B

  27. Matching – Know the following terms • short-term financing - Money needed to pay for the current operating activities of a business. • Improvement - A designed change that increases the usefulness of a product or service. • long-term financing - Money needed for the main resources of a business that will last for many years. • Service Corps of Retired Executives - A group of retired local businesspeople who volunteer their services to counsel and mentor new business owners.

  28. Matching continued • Innovation - An invention or creation that is brand new. • Inventory - Products or raw materials a business keeps on hand. • Small Business Administration - A government agency that helps entrepreneurs develop business plans and obtain financing. • venture capital - Money provided by large investors to finance new products and new businesses. • customer analysis - The part of a business plan that discusses sales forecasts and the location and number of potential patrons • description of competition - The part of a business plan that discusses the industry characteristics and the condition of the economy.

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