Question 1

Online businesses avoid the risk of failure faced by traditional start-up businesses.

Accepted Answer

A) True 
 B)False

Question 2

Long-motivated by his wish to operate his own business, Andrew is considering purchasing an existing business. As he carefully weighs this option, he is likely to find that

Accepted Answer

A)  very few owners of small businesses have any interest in selling. 
B)  his potential for success would greatly improve if he started his own new firm. 
C)  the value of an existing business is determined by what the business owns, what it earns, and what makes it unique. 
D)  any entrepreneur willing to sell his/her business is experiencing serious financial problems. 
A)  very few owners of small businesses have any interest in selling. 
B)  his potential for success would greatly improve if he started his own new firm. 
C)  the value of an existing business is determined by what the business owns, what it earns, and what makes it unique. 
D)  any entrepreneur willing to sell his/her business is experiencing serious financial problems.

Question 3

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Accepted Answer

A) True 
 B)False

Question 4

When starting a small business, it's important to remember

Accepted Answer

A)  an affinity for taking large amounts of risk is the critical factor in achieving small business success. 
B)  doing things differently from previous entrepreneurs is the real key to success. 
C)  learning from others and gaining relevant business experience improves the odds for success. 
D)  to avoid burnout, limit the number of hours you work each week as you adapt to the rigors of self-employment. 
A)  an affinity for taking large amounts of risk is the critical factor in achieving small business success. 
B)  doing things differently from previous entrepreneurs is the real key to success. 
C)  learning from others and gaining relevant business experience improves the odds for success. 
D)  to avoid burnout, limit the number of hours you work each week as you adapt to the rigors of self-employment.

Question 5

Antoine is considering marketing his bicycles in Brazil. If he enters the Brazilian market, he is likely to learn that

Accepted Answer

A)  some cultures like dealing with individuals from smaller companies rather than large companies. 
B)  he will not be able to keep up with demand. 
C)  most foreign cultures prefer large company relationships to small company relationships. 
D)  there is strong resistance of Brazilian firms with respect to American products. 
A)  some cultures like dealing with individuals from smaller companies rather than large companies. 
B)  he will not be able to keep up with demand. 
C)  most foreign cultures prefer large company relationships to small company relationships. 
D)  there is strong resistance of Brazilian firms with respect to American products.

Question 6

Small Business Administration loans help firms finance their domestic operations. These funds, however, cannot be used to finance exports since the money is provided by U.S. taxpayers.

Accepted Answer

A) True 
 B)False

Question 7

State governments create new start-up business organizations called enterprise zones that are later sold to private investors.

Accepted Answer

A) True 
 B)False

Question 8

Mike remembers his grandfather telling him, "If you can find something you like to do, and somebody is willing to pay you to do it, that's the secret to a great life." The way Mike saw it, this was his chance. For the past five years, he's been splitting his time between school and working at a local tree farm. The owner recently announced he was ready to retire. As Mike began creating a business plan, he contemplated what the business might be worth. How much will he need to buy this business? For starters, Mike

Accepted Answer

A)  needs to find a government database that outlines what nursery businesses are worth, on average, across the country. 
B)  should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage. 
C)  will want to determine the assessed value of the acreage that the business owns, and then bid competitively. 
D)  needs to understand that it's difficult to buy an existing business, rather than start your own. The key will be to meet with the company's accountant, and explain your interest. The accountant will have all the answers. 
A)  needs to find a government database that outlines what nursery businesses are worth, on average, across the country. 
B)  should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage. 
C)  will want to determine the assessed value of the acreage that the business owns, and then bid competitively. 
D)  needs to understand that it's difficult to buy an existing business, rather than start your own. The key will be to meet with the company's accountant, and explain your interest. The accountant will have all the answers.

Question 9

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Accepted Answer

A) True 
 B)False

Question 10

Since Pepe has worked in marketing for a large corporation before getting into the pizza business

Accepted Answer

A)  there is no need to consider an entrepreneurial team for start-up due to the fact that all other management functions are served by marketing. 
B)  he can skip any marketing research steps that the SBA recommends. 
C)  he knows that the type of business he wants to start may be difficult to develop, but it has a tremendous amount of security due to its promise of long-term survival. 
D)  he plans to put together an entrepreneurial team of experts that will complement his expertise. 
A)  there is no need to consider an entrepreneurial team for start-up due to the fact that all other management functions are served by marketing. 
B)  he can skip any marketing research steps that the SBA recommends. 
C)  he knows that the type of business he wants to start may be difficult to develop, but it has a tremendous amount of security due to its promise of long-term survival. 
D)  he plans to put together an entrepreneurial team of experts that will complement his expertise.

Question 11

Software designed to help create business plans has proven to be of little value because it is difficult to apply it to every business situation.

Accepted Answer

A) True 
 B)False

Question 12

Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating in residential areas.

Accepted Answer

A) True 
 B)False

Question 13

The Spotlight on Small Business box is testimonial to the fact that entrepreneurs are problem solvers.

Accepted Answer

A) True 
 B)False

Question 14

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

Accepted Answer

A)  market 
B)  consumer cooperative 
C)  consumer collective 
D)  buyer's cooperative 
A)  market 
B)  consumer cooperative 
C)  consumer collective 
D)  buyer's cooperative

Question 15

Sofia recently applied for a microloan from the Small Business Administration. Although several conditions are important, the SBA's decision to grant or deny the loan will largely depend upon

Accepted Answer

A)  her credit history and the collateral she can offer. 
B)  her age, since microloans are only available to senior citizens. 
C)  her previous record of business success. 
D)  the soundness of her business plan, and her integrity. 
A)  her credit history and the collateral she can offer. 
B)  her age, since microloans are only available to senior citizens. 
C)  her previous record of business success. 
D)  the soundness of her business plan, and her integrity.

Question 16

Enterprise zones are specific geographic areas that

Accepted Answer

A)  the government has set aside for major corporations that promise to spend at least $10 million to create new jobs. 
B)  attract business investment by offering lower taxes and government support for development. 
C)  the government has recognized as having the fastest growth rates in the country. 
D)  are characterized by government ownership of small businesses. 
A)  the government has set aside for major corporations that promise to spend at least $10 million to create new jobs. 
B)  attract business investment by offering lower taxes and government support for development. 
C)  the government has recognized as having the fastest growth rates in the country. 
D)  are characterized by government ownership of small businesses.

Question 17

Small businesses are important to the U.S. economy because

Accepted Answer

A)  they fill in the gaps when large businesses want to let workers go on vacation or when large businesses want to temporarily cease production. 
B)  banks and other financial services companies would not have borrowing customers, because small businesses borrow more than large businesses. 
C)  they pay most of the tax revenue collected by the U.S. government. 
D)  they create about 65% of new jobs each year and generate over 50% of the U.S. GDP. 
A)  they fill in the gaps when large businesses want to let workers go on vacation or when large businesses want to temporarily cease production. 
B)  banks and other financial services companies would not have borrowing customers, because small businesses borrow more than large businesses. 
C)  they pay most of the tax revenue collected by the U.S. government. 
D)  they create about 65% of new jobs each year and generate over 50% of the U.S. GDP.

Question 18

Ariana, a talented photography student, started her own photography business. She planned to solicit jobs from large corporations, which would need headshots and other pictures for their annual reports and websites. Although filling a unique niche, Ariana needed the security that the business would thrive and that she would earn enough to support herself and her family. She also hoped she would spend less time each day calling on potential clients and more time doing the actual shoots. As her small business consultant, which of the following suggestions would you have for Ariana?

Accepted Answer

A)  Ariana should either take the risk necessary to develop a small business, or go to work for someone else. 
B)  In the beginning, it's doubtful that Ariana will realize ease of entry, security, and good profits. She needs to make plans in the event that one or more of these does not materialize quickly. 
C)  Photographers can take pictures of a multitude of things. It's probably not good strategy to limit her business to only photographing the needs of large corporations. 
D)  Ariana should definitely make time for herself each day so that she does not experience burnout. If she plans well, leaping into her own business will provide her with several hours of unstructured time each day where she can perfect her craft even more. 
A)  Ariana should either take the risk necessary to develop a small business, or go to work for someone else. 
B)  In the beginning, it's doubtful that Ariana will realize ease of entry, security, and good profits. She needs to make plans in the event that one or more of these does not materialize quickly. 
C)  Photographers can take pictures of a multitude of things. It's probably not good strategy to limit her business to only photographing the needs of large corporations. 
D)  Ariana should definitely make time for herself each day so that she does not experience burnout. If she plans well, leaping into her own business will provide her with several hours of unstructured time each day where she can perfect her craft even more.

Question 19

A business's size is measured

Accepted Answer

A)  in relation to the number of competitors in its industry. 
B)  in relation to other firms in its industry. 
C)  in relation to the number of dominant competitors in its sector. 
D)  as small, if it participates in the services sector. 
A)  in relation to the number of competitors in its industry. 
B)  in relation to other firms in its industry. 
C)  in relation to the number of dominant competitors in its sector. 
D)  as small, if it participates in the services sector.

Question 20

The Small Business Administration defines a small business as a firm that:

Accepted Answer

A)  has fewer than 100 partners. 
B)  is independently owned but not dominant in its industry. 
C)  is dominant in its industry, but small in the number of workers it employs. 
D)  has annual receipts of more than a specified amount depending upon the industry. 
A)  has fewer than 100 partners. 
B)  is independently owned but not dominant in its industry. 
C)  is dominant in its industry, but small in the number of workers it employs. 
D)  has annual receipts of more than a specified amount depending upon the industry.

Exam 6: Entrepreneurship and Starting a Small Business

Online businesses avoid the risk of failure faced by traditional start-up businesses.

Long-motivated by his wish to operate his own business, Andrew is considering purchasing an existing business. As he carefully weighs this option, he is likely to find that

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

When starting a small business, it's important to remember

Antoine is considering marketing his bicycles in Brazil. If he enters the Brazilian market, he is likely to learn that

Small Business Administration loans help firms finance their domestic operations. These funds, however, cannot be used to finance exports since the money is provided by U.S. taxpayers.

State governments create new start-up business organizations called enterprise zones that are later sold to private investors.

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Since Pepe has worked in marketing for a large corporation before getting into the pizza business

Software designed to help create business plans has proven to be of little value because it is difficult to apply it to every business situation.

Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating in residential areas.

The Spotlight on Small Business box is testimonial to the fact that entrepreneurs are problem solvers.

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

Sofia recently applied for a microloan from the Small Business Administration. Although several conditions are important, the SBA's decision to grant or deny the loan will largely depend upon

Enterprise zones are specific geographic areas that

Small businesses are important to the U.S. economy because

A business's size is measured

The Small Business Administration defines a small business as a firm that:

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

Filters