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110. An entrepreneur's personal financial position will have a minor impact on negotiations with
bankers for a small business loan.
111. Getting a business plan into the hands of the right people is nearly as important as getting
the right information in the plan.
112. The entrepreneur's integrity is not relevant to bankers when determining the
creditworthiness of a business loan.
113. Software designed to help create business plans has proven to be of little value because it
is difficult to apply it to every business situation.
114. Since creating a detailed business plan is almost impossible, entrepreneurs should focus
on the other tasks needed to get their firm started.
115. Management includes attention toward financing the business, hiring employees,
marketing, and record keeping.
116. Identifying
poor management
as the cause of a small business failure likely covers a
variety of problems.
117. Aside from personal savings, the only other viable source of financing for an entrepreneur
would be funds available from friends and family.
118. Potential suppliers can be an excellent source of financing for a new business since
lending money to a new customer may be very much in their own interest.
119. Angel investors are the government agencies that invest money in new companies before
they go public.
120. Venture capitalists provide funds for start-up businesses in exchange for part ownership
in the new firm.
121. State and local governments often act as venture capitalists.
122. While the Small Business Administration provides management advice to new business
owners, it is not empowered to provide financial assistance.
123. Venture capitalists provide funds for small businesses as part of their philanthropy
programs.
124. Venture capitalists prefer investing in smaller start-up businesses in order to reduce their
overall risk.
125. The Small Business Administration's microloan program offers small businesses very small
loans.
126. Small Business Administration microloans are based on the borrowers' integrity rather
than collateral and credit history.
127. In order to qualify for a microloan from the SBA, an entrepreneur must have adequate
collateral, and a proven track record of success.
128. Small Business Investment Companies (SBICs) are privately owned companies licensed by
the Small Business Administration to lend money to small businesses.
129. The SBA may guarantee loans made by a financial institution and repay them if the
borrowers stop making payments.
130. Success in running a business depends on knowing your customers, managing your
employees, and keeping efficient records.
131. In the business world, a market consists of those people who have a willingness to buy a
particular product.
132. One of the greatest advantages that small businesses have over larger ones is the ability
to know their customers better and to adapt quickly to the customers' needs.
133. Attracting qualified workers presents a problem for small businesses since they usually
offer less money, fewer benefits, and less room for advancement than larger firms offer.
134. As their firms grow and prosper, busy entrepreneurs take pleasure in delegating authority
to others.
135. Studies show that seniority is the most important criterion when selecting employees for
promotion to management positions.
136. Compared to employees of large businesses, small business employees are less satisfied
with their work because they see their jobs as less challenging.
137. Hiring family members offers the best answer to the problem of attracting qualified
employees.
138. Questions about how much authority to delegate and to whom are easier issues for family-
run businesses since they
can't fire family
.
139. With fewer employees and less revenue, small businesses have less need for detailed
records than do larger business organizations.
140. Many small business owners report that they needed assistance with accounting when
they first started businesses.
141. Commercial loan officers and insurance agents offer expert assistance that can be
valuable to small business owners.
142. One way to control the legal costs associated with operating a small business is to
purchase a prepaid legal plan.
143. Commercial loan officers serve as a resource for small business owners for information
regarding risk management.
144. Many more new entrepreneurs are turning to crowdfunding sites, like Kickstarter, to raise
funds for their endeavors.
145. According to the
Adapting to Change
box, one uspide to crowdfunding is that potential
future investors will be attracted to companies that already have large numbers of investors.
146. Management includes attention toward financing the business, hiring employees,
marketing, and record keeping.
147. Prior to creating a business plan, discussions with bankers and investors can help
entrepreneurs determine the amount of financing available.
148. An effective business plan analyzes the competition and identifies the resources required
to profitably serve a target market.
149. When writing a business plan, prospective entrepreneurs should remember to omit
details regarding their experience and education since investors are only interested in the
proposed business.
150. As opposed to venture capitalists, angel investors prefer to target their investments in
new firms requiring large sums of money.
151. A major advantage of preparing a formal business plan is that prospective entrepreneurs
must identify the resources and activities required to successfully operate their proposed
venture.
152. 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.
153. If you plan to meet face-to-face with a banker or venture capitalist, it is not necessary to
submit a business plan.
154. As a prospective entrepreneur, Chantal considered a variety of financing sources. Her
discussions with a venture capitalist revealed that this type of investor expects to receive a
significant ownership interest in her firm.
155. 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.
156. Austin's interest in computers helped fuel his design of a new hard drive that is far
superior to anything on the market. Austin's product and business plan will likely attract several
sources of financing if he is willing to give up part ownership in his company.
157. Because college students realize the importance of nursing homes for our aging
population, students comprise an attractive market for nursing home insurance policies.
158. In order to better serve their customers, small business owners should avoid delegating
authority to their employees.
159. Justin feels that his family-run business will be more likely to avoid the problems many
growing businesses have with managing employees. His attitude will likely hinder the growth of
his company.
160. Whitney wants to start her own business, but she is concerned about her limited financial
resources. She would be well advised to save money by delaying her meeting with lawyers and
accountants until the business has been operating for a few years.
161. While only a small percentage of small businesses export, the number has increased
dramatically recently.
162. Large multinational firms dominate the international market, leaving few opportunities for
small businesses.
163. One advantage enjoyed by small businesses in international markets is that overseas
buyers like dealing with individuals rather than large corporate bureaucracies.
164. Due in part to government support, the majority of U.S. small businesses are involved in
exporting.
165. Exporting offers small businesses opportunities to reduce their dependence on domestic
sales and extend product lives.
166. Small Business Administration loans help firms finance their domestic operations. These
funds however, cannot be used to finance exports since the money is provided by U.S. taxpayers.
