Exam 6: Small Business and Entrepreneurship: Economic Rocket Fuel

Which of the following are a convenient and flexible means of financing a new start-up, but can result in very high financing fees if they are not paid off promptly?

How are the vast majority of new firms funded?

When it comes to learning more about starting and running a small business, which of the following best describes available sources?

What have Steve Jobs, Ray Kroc, and Walt Disney all experienced?

Which of the following best describes overhead costs for small businesses?

The vast majority of the richest individuals in Canada earned their wealth by obtaining employment in major corporations and then working their way into positions in senior management within these organizations.

When borrowing money from family and friends to start a business, it is a good idea to keep the loan arrangements on a professional basis.

Which of the following best describes entrepreneurs with a strong internal locus of control?

Gregor has developed an automobile engine that runs efficiently for up to three hours on a single russet potato. His friends have pointed out how difficult it will be to get car manufacturers to adopt his new technology and that it could take years to get enough service stations to stock potatoes to make it practical for people to rely on the new energy source for long trips. But Gregor is convinced he can make the Canadian economy energy independent, thus changing the world. He plans to create a new business called Spuds-to-Go to promote his new engine. What does Gregor have?

An entrepreneur is an individual willing to take the risk of owning and operating a business.

Three downsides to buying a franchise include initial high costs, the ongoing percentage-of-sales royalty fees, and the franchise requirements that, in effect, reduce the owner's independence.

The personal touch of smaller businesses is not usually beneficial in selling to foreign markets.

Fifty percent of small business owners are 50 years of age or older.

What does a look at survival rates for small businesses over their first ten years show?

Buying an established business is generally less risky than starting a business from scratch.

Which organization would be most likely to help you develop a business plan?

Bernard has been a very successful sales rep for a big corporation and has managed to save up a large sum of money. He's tired of working for the big company and is wondering if he should sink his savings into a new business. He is willing to work hard and has very good people skills. But he hasn't been able to develop a good business concept from scratch. He also realizes that he doesn't have strong financial skills and might need some training and assistance in this area. Which of the following would best describe someone like Bernard?

One of the biggest problems facing people who want to start a small business is the lack of educational resources available to help them learn the ins and outs of starting and managing their new company.

When entrepreneurs fail, what do they tend to do?

Every small business owner starts out as an entrepreneur.