choose the correct answer 3

Which of the following statements about industries that attract small businesses are true and which are false?

Knowledgeable entrepreneurs are attracted to unfamiliar industries where they can raise capital based on their skills.

Entrepreneurs who choose production industries often need to have considerable capital for initial investment.

A decreasing number of self-employed entrepreneurs run service businesses from home in the United States.

Small businesses dominate in the real estate, leasing, and rental industries.

Look at the following personality traits and determine if each is favorable or unfavorable for someone who wants to start a successful small business.

Someone else in my family has run a small business.

I prefer to be independent.

I prefer to avoid challenges.

I have an idea for a new product.

I prefer to work for other people.

Imagine you read the following statements in newspaper interviews with different entrepreneurs. Use the drop down menu to indicate whether the information in each quote is generally associated with the success or failure of a small business.

Entrepreneur A says: “If my new product doesn’t catch on quickly, within the first one or two months, I’ll need to borrow additional money to keep the business going until revenue increases.”

Entrepreneur B says: “I learned the ins and outs of this industry while working as a consultant to executives in market-leading companies, before I decided to run a business myself.”

Entrepreneur C says: “My plan is to move full speed ahead, expanding month after month as quickly as possible before competitors have a chance to copy my unique new product.”

Entrepreneur D says: “My can-do attitude, coupled with my experience, skills, and resources, will help me compete with much larger firms.”

Entrepreneur E says: “I’m enjoying the challenge of learning to manage a lot of people and a large payroll, which I’ve never done before.”

As you plan for your own small business, you’re making a list of possible pros and cons. Using the drop down menu, identify each statement as an advantage or disadvantage of small business.

You don’t want to account to a boss for how you spend your time.

You enjoy meeting new people and doing what you can to be helpful.

You are worried about your business not doing well.

You wonder about how big your small business can grow because you want to make a good living.

You believe in experimenting with different ways to meet your customers’ needs, even trying new things from one day to the next.

You want to work closely with customers rather than having to invest a lot of time in complicated paperwork.

You are about to prepare a business plan for opening a new soup and salad restaurant. Identify which of the following statements about a business plan are true and which are false.

A business plan can help you expand beyond the limited potential of your small business.

A business plan can help you determine the potential profitability of your small business.

A business plan can help you track, measure, and assess movement toward your business’s goals.

A business plan can help improve your knowledge and expertise as your small business expands.

A business plan can help you communicate with potential financial backers.

You’re going to need either investors or a bank loan to help finance your new restaurant. For example, you’ll be buying new kitchen equipment, as well as new dining furniture. Use the drop down menu to indicate which of the following questions investors and bankers are seeking to answer when they examine a new venture’s business plan.

“How will this new business affect local employment?”

“Is this new business a good idea, and why?”

“What level of funding is needed to get this new business off the ground and keep it going?”

“What does the entrepreneur hope to accomplish with this new business?”

“How is this entrepreneur providing technical innovation?”

“Is this new business part of the distribution, service, or production industries?”

Before you open your new restaurant, you decide to get outside advice about management and financing. Using the drop down menu, match each of these descriptions with the appropriate organization providing the assistance.

Free counseling from retired and active businesspeople in the local community.

Free management counseling from students in business administration on local campuses.

Training and counseling services drawing on the resources of government agencies, private businesses, and universities.

Publications, workshops, and other assistance from a specialized government agency created by Congress more than 60 years ago.

Private firms licensed by the Small Business Administration to provide venture capital to small businesses that might otherwise be unable to attract such investment.

Instead of starting from scratch to open your own soup and salad restaurant, you’re considering whether to work with Soup Today, a company that is offering franchises nationwide. Your first step is to investigate exactly what’s involved in franchising. Using the drop down menu, read each statement and indicate whether the franchisee or the franchisor is responsible for that action.

Pay a fee for the use of the brand and design of the premises.

Inspect the premises to be sure that standards are being met.

Supply and train the labor to operate the business.

Provide the necessary initial training for managing the method of doing business.

Grant a license to use trademarks and patents.

Before you make a decision about buying a franchise from Soup Today, use the drop down menu to identify each of the statements below as being an advantage for the franchisor or the franchisee.

Franchising under nationally advertised brands attracts customers for local outlets.

Franchising results in a well-controlled distribution of products without investing heavily to build and run local outlets.

Franchising yields royalty payments when each local entrepreneur succeeds in building sales.

Franchising allows local operators to minimize the cost of supplies and advertising by buying in cooperation with other local operators.

After meeting with Soup Today’s top executives and visiting three of its franchisees, you jotted down some quotes. Using the drop down menu, select pro or con to indicate whether it is seen as an advantage or a disadvantage from the franchisee’s perspective.

A franchisee said: “Soup Today controls every tiny detail of my franchise, from soup recipes to employee uniforms to accounting systems. I want to make more decisions on my own, but I’m limited by the franchise agreement.”

A second franchisee said: “Soup Today really knows the restaurant business. Sure, I pay royalties, but I feel more confident as an entrepreneur because I know I can get expert advice whenever I have a problem.”

A third franchisee said: “Ingredients and supplies would be much more expensive if I didn’t have the Soup Today franchisee buying group. Actually, I’m getting higher quality ingredients than I could afford as one small business on my own.”

Soup Today’s director of marketing said: “Have you seen our Super Bowl ads? Then you know we are very aggressive in advertising our brand to support local franchisees around the country.”

Soup Today’s director of franchise sales said: “So far, we have sold only two franchises in your part of the state. Be aware that we have received other inquiries and we have the right to sell to many other franchisees in your area.”

Soup Today’s executive chef said: “We carefully research consumer trends and introduce a steady stream of new soups to bring customers into local outlets again and again.”

You want to start your own small business. Which of these broad industry categories attract the most small businesses? Select all that apply.

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