Dana Is Thinking About Starting Her Own Graphics Design Business

question 101

Multiple Choice

Dana is thinking about starting her own graphics design business but is keenly aware of the fact that she lacks much business experience. A friend has suggested that she consider going to work for someone else in the same type of business before going out on her own. Which of the following would best describe this advice?

• A) Usually a bad idea. Working for someone else tends to stifle creativity.
• B) Almost always an excellent idea. Most studies suggest that the vast majority of successful small business owners worked for at least 10 years for someone else before they launched their own company.
• C) Sometimes a good idea, but more often it's a waste of time. Most small businesses are so simple to manage that prior experience isn't really necessary.
• D) Often a good idea because it allows you to learn the ins and outs of running that type of business with little personal risk. But keep in mind that if you work for someone else too long you might get too comfortable in your position to follow through with your plans.

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Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet account balances to calculate cash flow from operating activities.

Statement Of Cash Flows

A document detailing the inflows and outflows of cash within a company, categorized into operating, investing, and financing sections, essential for assessing financial health.

Operating Section

Part of an income statement that discloses revenues and expenses related directly to the core business operations.

Direct Method

A cash flow statement approach that lists major payments and receipts within operating activities directly.