Question 1

Identifying poor management as the cause of a small business failure likely covers a variety of problems.

Accepted Answer

A) True 
 B)False

Question 2

Maya opened a bakery in a seaside resort town. She was positive she had the perfect location as plenty of hotels and inns were within walking distance of her storefront. She planned to use her grandmother's recipes and only the finest ingredients for her upscale resort customers. During her first week of business, she was disappointed with lackluster sales. When she drove past the regular breakfast-style restaurants and even the nearby Starbucks, she noticed they were rather bustling. Maya most likely

Accepted Answer

A)  did not publicize in the appropriate places. 
B)  underestimated the competition. 
C)  should have considered weather conditions before assuming that her business would be vibrant. 
D)  did not consider that small businesses never get the name recognition in resort towns that larger businesses and franchises realize. 
A)  did not publicize in the appropriate places. 
B)  underestimated the competition. 
C)  should have considered weather conditions before assuming that her business would be vibrant. 
D)  did not consider that small businesses never get the name recognition in resort towns that larger businesses and franchises realize.

Question 3

Management includes attention toward financing the business, hiring employees, marketing, and record keeping.

Accepted Answer

A) True 
 B)False

Question 4

Ariel wants to start and run her own business. Although she acknowledges it would be helpful to earn a healthy profit, her main motivation is the exhilaration and challenge of starting and running a business. Ariel's attitude is different from most small business owners, who usually focus solely on the earnings potential of their ventures, as well as the opportunity to acquire power and prestige.

Accepted Answer

A) True 
 B)False

Question 5

The SBA's ________ program provides export-financing opportunities for small businesses.

Accepted Answer

A)  Global Trade funding 
B)  Homeland Security funding 
C)  Export Express loan 
D)  International Monetary loan 
A)  Global Trade funding 
B)  Homeland Security funding 
C)  Export Express loan 
D)  International Monetary loan

Question 6

Because college students realize the importance of nursing homes for our aging population, students comprise an attractive market for nursing home insurance policies.

Accepted Answer

A) True 
 B)False

Question 7

Successful small business owners are

Accepted Answer

A)  not good sources for information on starting your own business because they generally do not understand failure. 
B)  valuable sources for information since you can learn from their experiences. 
C)  good sources of information but risky since their keen sense of sniffing out something with potential will tempt them to steal your ideas. 
D)  valuable sources of information, but you should proceed with caution because talking with someone who could eventually be your competitor may cross the line due to federal trade commission laws. 
A)  not good sources for information on starting your own business because they generally do not understand failure. 
B)  valuable sources for information since you can learn from their experiences. 
C)  good sources of information but risky since their keen sense of sniffing out something with potential will tempt them to steal your ideas. 
D)  valuable sources of information, but you should proceed with caution because talking with someone who could eventually be your competitor may cross the line due to federal trade commission laws.

Question 8

Victor is a dreamer rather than a doer. This will make him an ideal entrepreneur since their job is to be creative and develop new ideas that are then implemented by others.

Accepted Answer

A) True 
 B)False

Question 9

________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies.

Accepted Answer

A)  Leveraged buyout specialists 
B)  Angel investors 
C)  Venture investors 
D)  Corporate raider investors 
A)  Leveraged buyout specialists 
B)  Angel investors 
C)  Venture investors 
D)  Corporate raider investors

Question 10

A(n) ________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk.

Accepted Answer

A)  insurance agent 
B)  accountant 
C)  liability assessor 
D)  union business agent 
A)  insurance agent 
B)  accountant 
C)  liability assessor 
D)  union business agent

Question 11

Apple's legendary smart team is an example of a company that succeeded by

Accepted Answer

A)  encouraging each manager to focus on a well-defined area of the business and build his own specialized department. 
B)  bringing together a group of talented and experienced managers to conceive, develop, and market products. 
C)  emphasizing a low price and low-cost strategy right from the beginning. 
D)  assembling a group of employees whose inexperience was a plus, because they did not come with the baggage and institutional ideas of larger companies. 
A)  encouraging each manager to focus on a well-defined area of the business and build his own specialized department. 
B)  bringing together a group of talented and experienced managers to conceive, develop, and market products. 
C)  emphasizing a low price and low-cost strategy right from the beginning. 
D)  assembling a group of employees whose inexperience was a plus, because they did not come with the baggage and institutional ideas of larger companies.

Question 12

Entrepreneurs seeking financial support from bankers and potential investors should

Accepted Answer

A)  be vague regarding their creative business plan to avoid having their idea stolen. 
B)  seek the bankers' and investors' assistance in developing their business plan. 
C)  create a detailed business plan to help the bankers and investors understand why this business will succeed. 
D)  ask for a relatively small amount of capital initially, postponing a full funding request until the investors better understand the business concept. 
A)  be vague regarding their creative business plan to avoid having their idea stolen. 
B)  seek the bankers' and investors' assistance in developing their business plan. 
C)  create a detailed business plan to help the bankers and investors understand why this business will succeed. 
D)  ask for a relatively small amount of capital initially, postponing a full funding request until the investors better understand the business concept.

Question 13

As a small business owner, Jasmine can't afford to provide her employees with the high wages and benefits offered by big corporations. One way to keep her employees and create a high level of motivation would be to

Accepted Answer

A)  constantly communicate with them that "at least they have a job." 
B)  adopt a policy of promoting workers who have been employed the longest. 
C)  empower her employees to develop their own ideas. 
D)  hire only family members, since they are more loyal. 
A)  constantly communicate with them that "at least they have a job." 
B)  adopt a policy of promoting workers who have been employed the longest. 
C)  empower her employees to develop their own ideas. 
D)  hire only family members, since they are more loyal.

Question 14

Of all nonfarm businesses in the United States, almost 97% are considered small by the Small Business Administration (SBA) standards.

Accepted Answer

A) True 
 B)False

Question 15

List and discuss at least three causes of small business failure.

Accepted Answer

(Answers will vary; however, the student

Question 16

A good business plan will

Accepted Answer

A)  focus on the big picture and omit the small details of operating the business. 
B)  describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications. 
C)  be purposefully vague, since specifics can restrict creativity and flexibility. 
D)  focus on the nature of the business and the target market, omitting personal information about the owner in order to avoid personality issues. 
A)  focus on the big picture and omit the small details of operating the business. 
B)  describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications. 
C)  be purposefully vague, since specifics can restrict creativity and flexibility. 
D)  focus on the nature of the business and the target market, omitting personal information about the owner in order to avoid personality issues.

Question 17

Attracting qualified workers presents a problem for small businesses since they usually offer less money, fewer benefits, and less room for advancement than larger firms offer.

Accepted Answer

A) True 
 B)False

Question 18

If you plan to meet face-to-face with a banker or venture capitalist, it is not necessary to submit a business plan.

Accepted Answer

A) True 
 B)False

Question 19

Many small business owners report that they needed assistance with accounting when they first started businesses.

Accepted Answer

A) True 
 B)False

Question 20

A creative person working within a corporation to launch new products and generate new profits is known as a(n)

Accepted Answer

A)  arbitrator. 
B)  micropreneur. 
C)  macropreneur. 
D)  intrapreneur. 
A)  arbitrator. 
B)  micropreneur. 
C)  macropreneur. 
D)  intrapreneur.

Exam 6: Entrepreneurship and Starting a Small Business

Identifying poor management as the cause of a small business failure likely covers a variety of problems.

Management includes attention toward financing the business, hiring employees, marketing, and record keeping.

The SBA's ________ program provides export-financing opportunities for small businesses.

Because college students realize the importance of nursing homes for our aging population, students comprise an attractive market for nursing home insurance policies.

Successful small business owners are

Victor is a dreamer rather than a doer. This will make him an ideal entrepreneur since their job is to be creative and develop new ideas that are then implemented by others.

________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies.

A(n) ________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk.

Apple's legendary smart team is an example of a company that succeeded by

Entrepreneurs seeking financial support from bankers and potential investors should

As a small business owner, Jasmine can't afford to provide her employees with the high wages and benefits offered by big corporations. One way to keep her employees and create a high level of motivation would be to

Of all nonfarm businesses in the United States, almost 97% are considered small by the Small Business Administration (SBA) standards.

List and discuss at least three causes of small business failure.

A good business plan will

Attracting qualified workers presents a problem for small businesses since they usually offer less money, fewer benefits, and less room for advancement than larger firms offer.

If you plan to meet face-to-face with a banker or venture capitalist, it is not necessary to submit a business plan.

Many small business owners report that they needed assistance with accounting when they first started businesses.

A creative person working within a corporation to launch new products and generate new profits is known as a(n)

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

How to Form a Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Appendix: Working Within the Legal Environment

Appendix: Using Technology to Manage Information

Appendix: Managing Risk

Appendix: Managing Personal Finances

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