SBA SBA Entrepreneurship & Small Business Fundamentals 1 — Questions and Answers
Question 1: According to the SBA, what percentage of U.S. businesses are classified as small businesses?
- 75%
- 89%
- 99.9% (Correct answer)
- 60%
Correct answer: 99.9%
According to the SBA, small businesses make up 99.9% of all U.S. businesses, demonstrating their critical importance to the American economy.
Question 2: What is the definition of a 'startup' in the context of small business development?
- A business more than 5 years old
- A newly established business in its early stages of operations (Correct answer)
- A franchise business
- A business with over 50 employees
Correct answer: A newly established business in its early stages of operations
A startup is a newly created business in the early stages of operations, typically focused on developing a scalable product or service.
Question 3: Which of the following is a primary characteristic that differentiates entrepreneurs from managers?
- Entrepreneurs avoid financial risk
- Entrepreneurs identify and pursue new business opportunities, often taking personal financial risk (Correct answer)
- Entrepreneurs only work in large corporations
- Entrepreneurs never delegate tasks
Correct answer: Entrepreneurs identify and pursue new business opportunities, often taking personal financial risk
Entrepreneurs distinguish themselves by identifying market opportunities, taking calculated personal financial risks, and building new ventures to capitalize on those opportunities.
Question 4: What is 'bootstrapping' in the context of starting a small business?
- Applying for multiple SBA loans simultaneously
- Funding and growing a business using personal resources and revenue without external financing (Correct answer)
- Forming a business partnership
- Filing for business bankruptcy protection
Correct answer: Funding and growing a business using personal resources and revenue without external financing
Bootstrapping means building and growing a business using personal savings and generated revenue rather than seeking outside investment or loans.
Question 5: What is the main purpose of a feasibility study before launching a small business?
- Secure a trademark
- Assess whether a business idea is viable and likely to succeed (Correct answer)
- Register the business with the state
- Hire initial employees
Correct answer: Assess whether a business idea is viable and likely to succeed
A feasibility study evaluates a business concept's market potential, financial requirements, and operational challenges before committing resources to launch.
Question 6: What role does the SBA play in the U.S. economy according to its core mission?
- Regulate all business activities
- Aid, counsel, assist, and protect the interests of small businesses (Correct answer)
- Collect federal business taxes
- Manage government contracting for large corporations
Correct answer: Aid, counsel, assist, and protect the interests of small businesses
The SBA's core mission is to aid, counsel, assist, and protect the interests of small businesses and to help maintain and strengthen the U.S. economy.
SBA SBA Entrepreneurship & Small Business Fundamentals 1
According to the SBA, what percentage of U.S. businesses are classified as small businesses?