How would you define small business?

2. Name a company that seems large but might be classified as small because it has relatively little impact on its industry.

3. Large businesses depend on small businesses. Why?

4. Define outsourcing, and describe its impact on small business.

5. Why are small businesses more likely than large businesses to be innovative?

6. Explain the term creative destruction.

7. How can being close to your customers give you a competitive advantage?

8. How would you show that small business is becoming a more important part of the economy?

9. The text compares the failure rate of small business with the divorce rate in marriage and student failure rate in college. Are these fair comparisons?

10. Describe four causes of small business failure. How does the quality of management relate to each of these causes?

Questions for Critical Thinking

1. The chapter discussed the evolution of small business in the American economy. With the rapid growth in the popularity of Internet businesses in the late 1990s and the bust in 2000, what is the next stage of small business evolution? Is the Internet just another business tool, or will it re-create the way business is done again?

2. Is creative destruction just another economic theory for the foundation of capitalism? Build a case supporting your answer.