Ch. 4 Small Businesses , Entrepreneur, Franchising

Question 1

Angel Investors

Answer 1

private investors who supply equity financing for businesses

Question 2

Business Plan

Answer 2

a precise statement of the rationale for a business and a step-by-step explanation of how it will achieve its goals

Question 3

External Shocks

Answer 3

unanticipated events that occur in a firm’s external environment that hurt the company’s business

Question 4

Franchise

Answer 4

a licence to sell another’s products or to use another’s name in business, or both

Question 5

Franchisee

Answer 5

the purchaser of a franchise

Question 6

Franchisor

Answer 6

the company that sells a franchise

Question 7

Intrapreneurs

Answer 7

individuals in large firms who take responsibility for the development of innovations within the organizations

Question 8

Small Business

Answer 8

any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people

Question 9

Undercapitalization

Answer 9

the lack of funds to operate a business normally

Question 10

Venture Capitalists

Answer 10

persons or organizations that agree to provide some funds for a new business in exchange for an ownership interest or stock