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Exam 6: Entrepreneurship and Starting a Small Business

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Question 61

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Opponents of home-based businesses successfully lobbied Congress to reduce the tax deductions available for home offices.

A) True
B) False

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Question 62

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Because of the stress of being in business for yourself, it's important that entrepreneurs have people around them to help replenish their enthusiasm.

A) True
B) False

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Question 63

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Entrepreneurs are well advised to avoid starting businesses in the same market in which they were previously employed.

Jennifer, a talented photography major started a corporate photography business. She planned to solicit jobs from large corporations who needed pictures for their annual reports and websites. Although filling a unique niche, Jennifer needed the security that the business would thrive and that she would earn enough to support herself and her child. She also hoped that she would spend less time each day calling on potential clients and more time doing the actual shoots. As her small business consultant, which of the following suggestions would you have for Jennifer?

According to the Reaching Beyond our Borders box, how do small business owners use technology to keep their labor costs down?

After Kate graduated from college, her grandfather created a bookkeeping position for her in his furniture retail business. Her older brother is in charge of purchasing inventory for the stores, yet often the store runs out of popular furniture or become overstocked with pieces that must be marked down to be sold. Kate is confident that her brother is more suited for handling accounting and finance, and she has a pulse on what sells and how much sells. Although she has spoken with her grandfather about it a couple of times, he seems reluctant to change. As the founder of the business, he may:

When Kelsey began the Cookie Kitchen, she located the operation at a small business center to get help with accounting, legal advice, and secretarial help for a very low cost. Electing to join the incubator helped her company to survive because it provided assistance while her company was in its infancy.

Big businesses do not serve all the needs of a market.

Due to the credit crunch during the recession of 2008, many small businesses found that were more willing to lend money to smaller operations.

The most important difference between entrepreneurs and micropreneurs is the focus placed by micropreneurs on balancing the demands of work and family.

While entrepreneurs frequently earn significant profits for themselves, their impact on society is quite small.

If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques.

It is important for an entrepreneur to be highly energetic.

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:

In order to qualify for a microloan from the SBA, an entrepreneur must have adequate collateral, and a proven track record of success.

Entrepreneurs take calculated risks.

While the Small Business Administration provides management advice to new business owners, it is not empowered to provide financial assistance.

A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a(n) :

Pete inherited a thriving dry cleaning business from his father and mother. He continued the tradition of offering quality service to the customers he served. As the surrounding towns expanded, several people suggested that Pete expand the business to offer service in new locations. He chose to maintain only one operation, so as not to lose control and to keep his work life and home life balanced. Pete is a good example of a(n) .

An entrepreneurial team consists of: