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Name the advanages of small business ownership. (5)
Independence, Cost, Flexibility, Focus, and Reputation.
Leading reasons why entrepreneurs go into business for themselves. (2)
Independence and opportunity to better themselves.
How is the cost difference in a small business versus large ones?
Usually require less money to start and maintain.
What do small businesses have the flexibilty to do?
Adapt to changing market demands.
How can small businesses benefit from one layer of management?
Decisions can be made quickly.
Small firms can focus their efforts on what?
A precisely defined market or niche or a specific group of customers.
Small firms can develop what? This demonstrates what?
Reputations for quality and service demonstrating a commitment to customer satisifcation.
Name the disadvantages of small business ownership. (2)
High stress level and high failure rate.
What are the worries in small business ownership that cause high stress? (3)
Business, competition, or changing market demand.
In a small business, what is the norm for work days and vacations?
Long work days and few vacations.
What are some reasons why small businesses have a high failure rate? (3)
Poor business management, a poor business concept, and burdens imposed by governement regulation, insufficient funds during slow periods, and competition from others.
What are the 3 major causes of small business failure?
Undercapitalization, Managerial Inexperience or Incompetence, and Inability to Cope with Growth.
Define Undercapitalization
Lacking sufficent funds to operate the business efficiently.
The shortest path to failure in a business is what?
Along with a vision, an entreprenuer needs what to manage a growing business effectively?
Knowledge and/ or experience.
Why can growth be a problem for a small business?
The owner may not have (or have the time to aquire) the specialized management skills needed.
Immediate threats to small and mid-sized businesses include? (5)
Rising inflation, collapse of the dollars value, energy and other supply shortages, excessive household or corporate debt, and the growing federal deficit.