Question 1

What can the Small Business Administration do for a small business?

Accepted Answer

The Small Business Administration (SBA)

Question 2

Joe decides to start his own business designing websites for other businesses. Joe's business would be classified as a

Accepted Answer

A)  distribution business. 
B)  retailer. 
C)  production business. 
D)  wholesaling business. 
E)  service business. 
A)  distribution business. 
B)  retailer. 
C)  production business. 
D)  wholesaling business. 
E)  service business.

Question 3

Small businesses are generally managed by professional managers.

Accepted Answer

A) True 
 B)False

Question 4

What are the advantages and disadvantages to the franchisee of having a franchise?

Accepted Answer

Franchising can offer several advantages

Question 5

The average size of an SBA-guaranteed business loan is about

Accepted Answer

A)  $25,000. 
B)  $100,000. 
C)  $200,000. 
D)  $300,000. 
E)  $500,000. 
A)  $25,000. 
B)  $100,000. 
C)  $200,000. 
D)  $300,000. 
E)  $500,000.

Question 6

Your friend, Shonta, started a graphic design firm about a year ago. The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding. Shonta does not see any problem because she thinks she can easily get all the money she will need from her local bank. What advice might you give her?

Accepted Answer

A)  She is right―the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses. 
B)  She is crazy―banks do not lend money to small businesses but only to well- known, well-established organizations. 
C)  She should sell her business immediately before it fails because most small businesses fail during the first five years. 
D)  She should not accept any new clients so that she can end the need to add additional equipment and employees. 
E)  She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses. 
A)  She is right―the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses. 
B)  She is crazy―banks do not lend money to small businesses but only to well- known, well-established organizations. 
C)  She should sell her business immediately before it fails because most small businesses fail during the first five years. 
D)  She should not accept any new clients so that she can end the need to add additional equipment and employees. 
E)  She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses.

Question 7

Statistically, one can expect about two out of every three new businesses to fail within six years of their founding.

Accepted Answer

A) True 
 B)False

Question 8

The SBA's website resource targeted at assisting women-owned business is known as the SBA's Online Women's Resource and Growth Center.

Accepted Answer

A) True 
 B)False

Question 9

Chelsea is about to purchase a Baskin-Robbins franchise because she loves ice cream. How much work should Chelsea expect to have to do to make the franchise successful?

Accepted Answer

A)  Most franchisees simply hire managers to run the operations, so she will have to work very little. 
B)  She will need to work about twenty hours a week to make sure things are running smoothly. 
C)  She should expect to work very hard, putting in long hours about six days a week. 
D)  She will have to work a standard forty-hour work week, just as she did at her previous corporate job. 
E)  Her franchising agreement likely requires her to be at the store whenever it is open. 
A)  Most franchisees simply hire managers to run the operations, so she will have to work very little. 
B)  She will need to work about twenty hours a week to make sure things are running smoothly. 
C)  She should expect to work very hard, putting in long hours about six days a week. 
D)  She will have to work a standard forty-hour work week, just as she did at her previous corporate job. 
E)  Her franchising agreement likely requires her to be at the store whenever it is open.

Question 10

All of the following are advantages that small businesses have except

Accepted Answer

A)  the ability to adapt to change. 
B)  personal relationships with their customers. 
C)  simplified record keeping. 
D)  independence. 
E)  greater potential for making a profit. 
A)  the ability to adapt to change. 
B)  personal relationships with their customers. 
C)  simplified record keeping. 
D)  independence. 
E)  greater potential for making a profit.

Question 11

The business plan should deceive neither investors nor loan officers and should convey accurate and realistic expectations of business potential.

Accepted Answer

A) True 
 B)False

Question 12

Franchising is limited only to fast foods.

Accepted Answer

A) True 
 B)False

Question 13

The purchaser of a franchise is called the franchisee.

Accepted Answer

A) True 
 B)False

Question 14

Money that is invested in small and sometimes struggling firms that have the potential to become very successful is called

Accepted Answer

A)  seed money. 
B)  franchise funds. 
C)  SBA-guaranteed loans. 
D)  growth funds. 
E)  venture capital. 
A)  seed money. 
B)  franchise funds. 
C)  SBA-guaranteed loans. 
D)  growth funds. 
E)  venture capital.

Question 15

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

Accepted Answer

A)  How much will the new business cost? 
B)  Why is this new business a good idea? 
C)  What are the goals for the business? 
D)  What is the nature and mission of the business? 
E)  How often will the business advertise? 
A)  How much will the new business cost? 
B)  Why is this new business a good idea? 
C)  What are the goals for the business? 
D)  What is the nature and mission of the business? 
E)  How often will the business advertise?

Question 16

The acronym SCORE stands for

Accepted Answer

A)  Standard Card Options for Retirees. 
B)  Sam's Cooperatives Operating in Reno. 
C)  Service Corps of Retired Employees. 
D)  Service Corps of Retired Executives. 
E)  Sonoma City Options for Retired Employees. 
A)  Standard Card Options for Retirees. 
B)  Sam's Cooperatives Operating in Reno. 
C)  Service Corps of Retired Employees. 
D)  Service Corps of Retired Executives. 
E)  Sonoma City Options for Retired Employees.

Question 17

SCORE is a group of active business executives offering their services to small businesses for a fee.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following was established to arbitrate disputes between franchisors and franchisees?

Accepted Answer

A)  Court system 
B)  Federal Trade Commission 
C)  National Franchise Mediation Program 
D)  Partnership for Franchisees' Rights 
E)  Association for Franchise Arbitration 
A)  Court system 
B)  Federal Trade Commission 
C)  National Franchise Mediation Program 
D)  Partnership for Franchisees' Rights 
E)  Association for Franchise Arbitration

Question 19

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant. Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages. He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally. The company hired an international agency to help it learn what and what not to do. After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
-Refer to Mc-King Chicken. Which of the following would be an advantage for Brian?

Accepted Answer

A)  Guidance from the franchisor 
B)  Franchise holders paying for their security 
C)  Disagreements increasing 
D)  Contract disputes 
E)  The franchisor maintaining a great deal of control 
A)  Guidance from the franchisor 
B)  Franchise holders paying for their security 
C)  Disagreements increasing 
D)  Contract disputes 
E)  The franchisor maintaining a great deal of control

Question 20

Carmen Catucci is considering going into business. She wants to offer an income tax service. To minimize her chances of failure, she might consider

Accepted Answer

A)  buying a franchise. 
B)  starting from scratch. 
C)  dealing only with wealthy people. 
D)  trying to enter the manufacturing industry instead. 
E)  borrowing money from the SBA. 
A)  buying a franchise. 
B)  starting from scratch. 
C)  dealing only with wealthy people. 
D)  trying to enter the manufacturing industry instead. 
E)  borrowing money from the SBA.

Exam 5: Small Business, Entrepreneurship, and Franchises

What can the Small Business Administration do for a small business?

Joe decides to start his own business designing websites for other businesses. Joe's business would be classified as a

Small businesses are generally managed by professional managers.

What are the advantages and disadvantages to the franchisee of having a franchise?

The average size of an SBA-guaranteed business loan is about

Statistically, one can expect about two out of every three new businesses to fail within six years of their founding.

The SBA's website resource targeted at assisting women-owned business is known as the SBA's Online Women's Resource and Growth Center.

Chelsea is about to purchase a Baskin-Robbins franchise because she loves ice cream. How much work should Chelsea expect to have to do to make the franchise successful?

All of the following are advantages that small businesses have except

The business plan should deceive neither investors nor loan officers and should convey accurate and realistic expectations of business potential.

Franchising is limited only to fast foods.

The purchaser of a franchise is called the franchisee.

Money that is invested in small and sometimes struggling firms that have the potential to become very successful is called

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees."

The acronym SCORE stands for

SCORE is a group of active business executives offering their services to small businesses for a fee.

Which of the following was established to arbitrate disputes between franchisors and franchisees?

Carmen Catucci is considering going into business. She wants to offer an income tax service. To minimize her chances of failure, she might consider

Exploring the World of Business and Economics

A: Being Ethical and Socially Responsible

B: Being Ethical and Socially Responsible

A: Exploring Global Business

B: Exploring Global Business

Choosing a Form of Business Ownership

Understanding the Management Process

Creating a Flexible Organization

Producing Quality Goods and Services

Attracting and Retaining the Best Employees

Motivating and Satisfying Employees and Teams

Enhancing Union-Management Relations

Building Customer Relationships Through Effective Marketing

A: Creating and Pricing Products That Satisfy Customers

B: Creating and Pricing Products That Satisfy Customers

Wholesaling, Retailing, and Physical Distribution

Developing Integrated Marketing Communications

Social Media, E-Business, and Accounting

Using Management and Accounting Information

Understanding Money, Banking, and Credit

Mastering Financial Management

A: Understanding Personal Finances and Investments

B: Understanding Personal Finances and Investments

Filters