Sal Is Thinking About Starting a Small Business and Is

question 5

Multiple Choice

Sal is thinking about starting a small business and is trying to assess the potential opportunities and threats associated with a new start-up.She's talked with friends and associates about her plans,and several have offered her opinions and advice.The comments of four friends are summarized below.Which of these statements would probably be the most helpful to Sal?

• A)Don't worry about your lack of business experience and limited business skills. Entrepreneurs can make up for a lack of skills with enthusiasm and hard work.
• B)Hang in there. If a business is going to fail, it almost always happens in the first year. If you can stick it out for more than a year, you'll be on your way to success.
• C)Since your company will be small and new, it's important to impress your customers. Spend a lot of money on upscale offices and state-of-the-art equipment to create a "wow" factor.
• D)Find a market segment that you can profitably serve but which is too small to attract larger companies.

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Definitions:

Financial Statement

Reports that present the financial performance, position, and cash flows of a business for a specified period.

Permanent/Temporary

Terms used to distinguish between accounts or items that either persist over multiple accounting periods (permanent) or exist for only one period (temporary).

Normal Balance

The side (debit or credit) of an account that is typically increased in accounting.

Financial Statement

Reports that provide detailed information about a company's financial performance and position.