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Exam 6: Entrepreneurship and Starting a Small Business

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Question 111

True/False

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Hoping to qualify for a microloan from the Small Business Administration, Magdalena's business plan clearly identifies her strategy to profitably serve a target market. Unfortunately, her lack of business experience and limited collateral greatly reduce her chances of obtaining the microloan.

A) True
B) False

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Question 112

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Small businesses create about percent of the new jobs in the United States.

A) 5-10
B) 25-35
C) 60-80
D) 100

E) A) and B)
F) A) and C)

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Question 113

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While only a small percentage of small businesses export, the number has increased dramatically in the last decade.

Juanita wants to start a small business. If her primary goal is fast growth and high profits, her best chances would be in the manufacturing sector.

Aside from personal savings, the only other viable source of financing for an entrepreneur would be funds available from friends and family.

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Jon received a letter in the mail explaining that HE COULD EARN THOUSANDS!!!! by working just a few hours from home. Most likely Jon's letter was a work-at- home scam.

The Internet has slowed small businesses participation in international markets.

As an employee of a small business, DeMonte has observed the owner's desire to retire. Since DeMonte would like to buy the business, he needs to determine how much the business is worth. In order to determine a fair price for the business, DeMonte should add up the market value of all of the firm's physical assets such as buildings, machinery, equipment, and inventory, and willingly pay this amount for the business.

Enterprise zones and investor visas are examples of:

According to the U.S. Department of Commerce, a of small businesses export their goods.

Juanita wants to operate her own business. Although she admits it would be nice to earn a healthy profit, her primary motivation is the excitement and challenge of starting and running a business. Juanita's attitude is different from most small business owners, who usually focus solely on the earnings potential of their ventures, as well as the opportunity to acquire power and prestige.

Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are.

A market consists of potential buyers of a good or service. However, for a market to exist:

Prospective entrepreneurs turned down by private lenders have little hope of getting financial help from the Small Business Administration, since the SBA's standards are even tougher than those of private lenders.

As the owner of a small manufacturing business, Myles has an interest in exporting. However, he doesn't know how to get started. Fortunately, the government provides an abundance of information to encourage entrepreneurs like Myles.

For the past twenty-five years, state and city governments have promoted facilities where new businesses can open-up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, continue to grow in popularity.

The SCORE (Service Corps of Retired Executives) program, sponsored by the SBA, is designed to provide financial assistance to minorities and women.

Commercial loan officers and insurance agents offer expert assistance that can be valuable to small business owners.

If you go through the exercise of preparing a business plan, only to determine that you need twice the amount of money to start the business than you have, the SBA and other expert organizations encourage you to go ahead with your plans because if you understand the market, you can use the revenues you accrue to make-up the short-fall.