SBA SBA Entrepreneurship & Small Business Fundamentals 2 — Questions and Answers
Question 1: What is 'intellectual property' in the context of a small business?
- Physical assets owned by the business
- Intangible creations of the mind such as inventions, brand names, and creative works (Correct answer)
- Debt owed to creditors
- Cash and liquid assets
Correct answer: Intangible creations of the mind such as inventions, brand names, and creative works
Intellectual property (IP) refers to intangible assets created through human intellect, including patents, trademarks, copyrights, and trade secrets.
Question 2: What is the primary difference between a trademark and a copyright?
- Trademarks last 10 years; copyrights last 5 years
- Trademarks protect brand identifiers; copyrights protect original creative works (Correct answer)
- Copyrights require federal registration; trademarks do not
- Trademarks cover only logos; copyrights cover only text
Correct answer: Trademarks protect brand identifiers; copyrights protect original creative works
Trademarks protect brand identifiers such as names, logos, and slogans, while copyrights protect original creative works such as books, music, and software.
Question 3: Which type of business valuation method calculates worth based on the company's expected future earnings?
- Asset-based valuation
- Income approach valuation (Correct answer)
- Market comparison approach
- Book value method
Correct answer: Income approach valuation
The income approach values a business based on its projected future earnings or cash flows, often discounted back to present value.
Question 4: What is the purpose of a 'pivot' strategy in entrepreneurship?
- Expanding to multiple locations simultaneously
- Fundamentally changing the business model or product based on market feedback (Correct answer)
- Filing for Chapter 11 bankruptcy reorganization
- Merging with a competitor
Correct answer: Fundamentally changing the business model or product based on market feedback
A pivot is a strategic shift in a business's core model, product, or target market in response to market feedback or changing conditions.
Question 5: What is a 'value proposition' in the context of small business development?
- The total value of business assets
- A clear statement of the unique benefit a business provides to its customers (Correct answer)
- An annual financial report
- The price-to-earnings ratio
Correct answer: A clear statement of the unique benefit a business provides to its customers
A value proposition is a concise statement that explains how a product or service solves a customer's problem and why it's better than alternatives.
Question 6: What is 'networking' most valuable for in small business entrepreneurship?
- Reducing IT infrastructure costs
- Building relationships that lead to referrals, partnerships, and business opportunities (Correct answer)
- Automating social media posts
- Filing government paperwork
Correct answer: Building relationships that lead to referrals, partnerships, and business opportunities
Networking builds professional relationships that generate referrals, partnerships, mentorship, and access to resources and opportunities essential for business growth.
SBA SBA Entrepreneurship & Small Business Fundamentals 2
What is 'intellectual property' in the context of a small business?