ADMN 1000H - TRENT UNIVERSITY (MIDTERM 5+6 CH.) WITH
CORRECT ANSWERS
1. Discuss why most A small business is an independently owned business that has fewer
than 100
businesses are
small
businesses.
6.
2. Determine
the
contributions
of small
businesses to
the economy.
3. Discuss why
small
businesses
fail.
4. Describe the
fea- tures of a
suc- cessful
business plan.
5. Identify the
avail- able
assistance for
small busi-
nesses.
1/
25
, ADMN 1000H - TRENT UNIVERSITY (MIDTERM 5+6 CH.) WITH
CORRECT ANSWERS
mployees and revenues less and 70 percent are
than $2 million. A small business for five years. Failure is often attributed to management
business is not usually inexperience, inadequate financing, and diflculty meeting government
the leading business in its regulations.
field. It meets industry-
specific size standards for complete business plan contains an executive summary, an introduction,
income or number of financial and marketing sections, and résumés of the business principals.
employees. A business is An ettective busi- ness plan uses these five sections and includes the
classified as large when company's mission, an outline of what makes the company unique,
its number of employees identification of customers and competitors, financial evaluation of the
or revenue exceeds these industry and market, and an assessment of the risks.
standards.
The Business Development Bank of Canada (BDC) is a government agency
mall businesses create new that assists, counsels, and protects the interests of small businesses in
jobs and new industries. Canada. The BDC was created by an act of Parliament in 1944. It
They often hire people who operates across Canada through oflces and resource centres that
have diflculty finding jobs provide long-term financial assistance and man- agement counselling.
at larger firms. Small firms The BDC also provides training, technical assistance, and education to
give people an opportunity help small businesses prepare for doing business in foreign markets.
and outlet to develop new Statistics show that most failures in small businesses happen because
ideas. Sometimes these of poor management. For this reason, the BDC works to improve the
new ideas become entirely management skills of small-business owners and managers.
new industries. Small
businesses also develop
new or improved goods
and services.
bout 96 percent of small
businesses that enter the
marketplace are in
business for one full year,
85 percent are in
business for three years,
2/
25
, ADMN 1000H - TRENT UNIVERSITY (MIDTERM 5+6 CH.) WITH
CORRECT ANSWERS
Explain A franchisor is a large firm that allows a small-business owner (a
franchis- ing. franchisee) to market and sell the larger firm's products under its brand
name in return for a fee. The franchisor's opportunities include the
possibilities of expansion and greater profits. The franchisee's benefits
include name recognition, quick start-up, support from the franchisor, and
the freedom of small-business ownership.
7. Outline the forms The three legal forms of business ownership are sole proprietorships,
partner-
of private busi- ships, and corporations. A sole proprietorship is owned and operated by one
ness per- son. Sole proprietorships are easy to set up and otter great operating
ownership. flexibility, but the owner is personally liable for all of the firm's debts and
legal responsibilities. In a partnership, two or more individuals share
responsibility for owning and running the business. Partnerships are
relatively easy to set up, but they do not protect either partner from
liability. A corporation is a separate legal entity from its owners. Investors
receive shares of stock in the firm, and owners have no legal or financial
liability beyond their individual investments. The legal structure of a not-for-
profit corporation requires that its goals do not include earning a
profit.
8. Describe
pub- lic and public ownership, a government unit or agency owns and operates
collec- an orga- nization. Collective ownership sets up an organization called a
tive ownership of co-operative. The owners join forces to operate all or part of the
business. activities in their firm or industry.
9. Discuss
organiz- Shareholders are the owners of a corporation. In return for their financial
invest-
ing a corporation. ments, they receive shares of stock in the company. Shareholders elect
a board of directors, who set overall policy. The board hires the chief
executive oflcer, who then hires the managers.
3/
25
CORRECT ANSWERS
1. Discuss why most A small business is an independently owned business that has fewer
than 100
businesses are
small
businesses.
6.
2. Determine
the
contributions
of small
businesses to
the economy.
3. Discuss why
small
businesses
fail.
4. Describe the
fea- tures of a
suc- cessful
business plan.
5. Identify the
avail- able
assistance for
small busi-
nesses.
1/
25
, ADMN 1000H - TRENT UNIVERSITY (MIDTERM 5+6 CH.) WITH
CORRECT ANSWERS
mployees and revenues less and 70 percent are
than $2 million. A small business for five years. Failure is often attributed to management
business is not usually inexperience, inadequate financing, and diflculty meeting government
the leading business in its regulations.
field. It meets industry-
specific size standards for complete business plan contains an executive summary, an introduction,
income or number of financial and marketing sections, and résumés of the business principals.
employees. A business is An ettective busi- ness plan uses these five sections and includes the
classified as large when company's mission, an outline of what makes the company unique,
its number of employees identification of customers and competitors, financial evaluation of the
or revenue exceeds these industry and market, and an assessment of the risks.
standards.
The Business Development Bank of Canada (BDC) is a government agency
mall businesses create new that assists, counsels, and protects the interests of small businesses in
jobs and new industries. Canada. The BDC was created by an act of Parliament in 1944. It
They often hire people who operates across Canada through oflces and resource centres that
have diflculty finding jobs provide long-term financial assistance and man- agement counselling.
at larger firms. Small firms The BDC also provides training, technical assistance, and education to
give people an opportunity help small businesses prepare for doing business in foreign markets.
and outlet to develop new Statistics show that most failures in small businesses happen because
ideas. Sometimes these of poor management. For this reason, the BDC works to improve the
new ideas become entirely management skills of small-business owners and managers.
new industries. Small
businesses also develop
new or improved goods
and services.
bout 96 percent of small
businesses that enter the
marketplace are in
business for one full year,
85 percent are in
business for three years,
2/
25
, ADMN 1000H - TRENT UNIVERSITY (MIDTERM 5+6 CH.) WITH
CORRECT ANSWERS
Explain A franchisor is a large firm that allows a small-business owner (a
franchis- ing. franchisee) to market and sell the larger firm's products under its brand
name in return for a fee. The franchisor's opportunities include the
possibilities of expansion and greater profits. The franchisee's benefits
include name recognition, quick start-up, support from the franchisor, and
the freedom of small-business ownership.
7. Outline the forms The three legal forms of business ownership are sole proprietorships,
partner-
of private busi- ships, and corporations. A sole proprietorship is owned and operated by one
ness per- son. Sole proprietorships are easy to set up and otter great operating
ownership. flexibility, but the owner is personally liable for all of the firm's debts and
legal responsibilities. In a partnership, two or more individuals share
responsibility for owning and running the business. Partnerships are
relatively easy to set up, but they do not protect either partner from
liability. A corporation is a separate legal entity from its owners. Investors
receive shares of stock in the firm, and owners have no legal or financial
liability beyond their individual investments. The legal structure of a not-for-
profit corporation requires that its goals do not include earning a
profit.
8. Describe
pub- lic and public ownership, a government unit or agency owns and operates
collec- an orga- nization. Collective ownership sets up an organization called a
tive ownership of co-operative. The owners join forces to operate all or part of the
business. activities in their firm or industry.
9. Discuss
organiz- Shareholders are the owners of a corporation. In return for their financial
invest-
ing a corporation. ments, they receive shares of stock in the company. Shareholders elect
a board of directors, who set overall policy. The board hires the chief
executive oflcer, who then hires the managers.
3/
25
