4. Structuring a new business (Connect, Perform) Think about the different ways entrepreneurs can start their businesses. Which of the following can an entrepreneur expect when starting a new business as a franchisee? Check all that apply The franchiser will provide the entrepreneur with some management help and support. An entrepreneur must comply with practices required by the franchise that is, the franchise cannot run the business however he or she wants The franchiser will expect the entrepreneur to purchase supplies from a pre-approved distributor All information needed to determine whether to buy a franchise is included in disclosure documents provided by the franchiser. Imagine you are opening a small business that sells golf equipment to local intramural teams. However, to make your dream a reality, you need to have money for start-up costs and to cover expenses until the business generates revenue. You want to fully understand the benefits and obligations associated with each type of funding before making any decisions Because you have planned to open a business for many years, you have saved enough money to run the business for at least 6 months. Which of the following are benefits of using your own money, rather than getting loans? Check that apply. Most businesses start generating a profit after about 3 months you can determine the amount of savings needed based on this estimate As long as you have living expenses covered for at least 1 month, using personal savings is probably the best way to finance a new business. You can avoid going through the approval process for a loan. If the business is not successful, you may use up your savings, but you will not have a loan, which would require making loan payments, despite the failure of your business. As you have planned for your new business, you have obtained a lot of valuable information from the U.S. Small Business Administration (SBA). You are now at the stage where you are arranging for financing. Which of the following are true about SBA financial programs? Check all that apply The SBA has a program through which it guarantees loans made by commercial lenders. If you cannot get a loan through a bank, the SBA has a variety of landing programs that might help you obtain a loan. You Should not assume that an SBA loan will be available to your business. SBA loans are not a major source of new business funding. dyle to restrictions on who can obtain SBA-backed loans and to budget cutbades at the SBA. If you are denied a bank loan, the SBA ensures that you will have access to capital. Yoy are also interested in obtaining funds from a venture capital company. After all, many successful companies started in this manner, and it seems We an easy way to get money. However, your friend, Frances, explained that your conception of what venture capital entails may be inaccurate. Which of the following statements made by Frances are correct? Check all that apply. Venture capital funding must be repaid once the business becomes profitable. A venture capital company usually takes an equity (ownership) position when it invests in a business. Venture capital companies typically look for businesses with rapid growth potential. A venture capital company may insist on having input regarding major business decisions as part of the investment agreement