159. Small businesses are typically managed by people who started and own them.
a. True
b. False
160. Entrepreneurial spirit is the desire to create a new business.
a. True
b. False
161. A new business is built around the entrepreneur.
a. True
b. False
162. It is rare that managers of small businesses lack the management skills necessary to run their businesses.
a. True
b. False
163. The main reasons small businesses fail are poor management skills on the part of owners, inadequate capital, and
poor planning.
a. True
b. False
164. Small businesses are prone to failure.
a. True
b. False
165. Many entrepreneurs lack the management skills required to run a business.
a. True
b. False
166. The incidence of innovation among small-business workers is significantly higher than that among workers in large
businesses.
a. True
b. False
167. According to a government source, more than half of this century‘s technological innovations came from small
companies.
a. True
b. False
168. Small businesses account for all nongovernment employment.
a. True
b. False
169. Small firms have traditionally added more than their proportional share of new jobs to the economy.
a. True
b. False
170. Large companies often find it less expensive to purchase parts from small companies than to manufacture their
own.
a. True
b. False
171. Because of small-business competition, large companies must become more efficient and responsive to consumers’
needs.
a. True
b. False
172. Society usually does not benefit from entrepreneurs who pursue their individual goals; it is only the entrepreneurs
who reap the benefits of their own work and creativity.
a. True
b. False
173. A main disadvantage of a small business is that employees and customers usually develop too close of a
relationship.
a. True
b. False
174. For those who like dealing with people, small business is the place to be.
a. True
b. False
175. Statistically, one can expect about two out of every three new businesses to fail within six years of their founding.
a. True
b. False
176. Some advantages of the sole proprietorship also apply to the small business.
a. True
b. False
177. Economically, the U.S. government is not concerned with whether or not small businesses make it.
a. True
b. False
178. An investor who is considering investing in Diane‘s Burger Bar would not likely want to see her business plan.
a. True
b. False
179. The business plan should deceive neither investors nor loan officers and should convey accurate and realistic
expectations of business potential.
a. True
b. False
180. The SBA is a private organization rather than a government agency.
a. True
b. False
181. SCORE is a group of retired businesspeople who volunteer their services to small businesses through the SBA.
a. True
b. False
182. John Wells, an African-American small business owner, might be eligible for a grant from the Minority Business
Development Agency.
a. True
b. False
183. The SBA’s website resource targeted at assisting women-owned business is known as the SBA’s Online Women’s
Resource and Growth Center.
a. True
b. False
184. In the past, the SBA could guarantee loans up to $5 million.
a. True
b. False
185. The average length of an SBA loan is about twenty-five years.
a. True
b. False
186. Money invested in small firms with the potential to become very successful is known as venture capital.
a. True
b. False
187. A small-business investment company (SBIC) is a government agency that provides venture capital to small
enterprises.
a. True
b. False
188. A license to operate an individually owned business as though it were part of a chain is a franchise.
a. True
b. False
189. The purchaser of a franchise is called the franchisor.
a. True
b. False
190. The purchaser of a franchise is called the franchisee.
a. True
b. False
191. Franchising experienced tremendous growth during the early 1430s.
a. True
b. False
192. Franchising is limited only to fast foods.
a. True
b. False
193. There is much less likelihood of failure with a franchised outlet than with an independently owned small business.
a. True
b. False
194. An agreement between two franchisors in which the two franchisors offer their products together is called double
franchising.
a. True
b. False
195. About one-third of franchised businesses fail during the first two years of operation.
a. True
b. False
196. Franchising is a win–win combination; both franchisees and franchisors are guaranteed success.
a. True
b. False
197. In a franchise, the franchisee gets the opportunity to start a business with limited capital and to make use of the
business experience of others.
a. True
b. False
198. The disadvantages of franchising mainly affect the franchisee because the franchisor retains a great deal of
control.
a. True
b. False
199. Some franchisors claim that contracts are unfairly tilted toward the franchisees.
a. True
b. False
200. All franchisors give geographical protection to their franchise holders.
a. True
b. False
201. International trade will become more important to small-business owners in the new century.
a. True
b. False
202. Small businesses are expected to remain the dominant form of organization in this country.
a. True
b. False