Test Bank Entrepreneurship And Starting A Small Business Ch6 - Understanding Business 12e Complete Test Bank by William Nickels. DOCX document preview.
Understanding Business, 12e (Nickels)
Chapter 06 Entrepreneurship and Starting a Small Business
1) Entrepreneurship involves accepting the risk of starting and running a business.
2) Entrepreneurship is another name for management.
3) Entrepreneurs are less important now than in the past to the U.S. economy.
4) While entrepreneurs frequently earn significant profits for themselves, their impact on society is quite small.
5) Many businesses started by entrepreneurs have grown into major corporations employing thousands of workers.
6) Entrepreneurs are motivated by the desire to earn a profit.
7) Entrepreneurs take calculated risks.
8) Most entrepreneurs prefer working for someone else.
9) Most entrepreneurs are more interested in personal achievement than in power.
10) If you have managerial skills and leadership ability, you also possess the personality to be an entrepreneur.
11) Because of the stress of being in business for yourself, it's important that entrepreneurs have people around them to help replenish their enthusiasm.
12) Successful entrepreneurs rely on others for direction and support.
13) Successful entrepreneurs accept the risk of failure.
14) Entrepreneurs avoid risk and place a high priority on security.
15) It is important for an entrepreneur to be highly energetic.
16) Most entrepreneurs get the ideas for their products and services from a flash of inspiration.
17) Potential entrepreneurs would be well advised to surround themselves with people who are smarter than they are.
18) An entrepreneurial team is a group of experienced managers who share the same skills and abilities.
19) Entrepreneurial teams combine the creative marketing and production ideas of a group of experienced people.
20) Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their businesses.
21) The most important difference between entrepreneurs and micropreneurs is the focus placed by micropreneurs on balancing the demands of work and family.
22) The primary concern of micropreneurs is to balance the risk of starting your own business with the desire to build a powerful organization earning significant profits.
23) Many micropreneurs are home-based business owners.
24) Micropreneurs are motivated by a desire to have both a satisfying family life and rewarding work.
25) Advancements in computer technology put home-based businesses at a disadvantage.
26) Many micropreneurs operate home-based businesses in the service industry.
27) Corporate downsizing reduces the opportunities for home-based businesses.
28) Successful micropreneurs require self-discipline to separate work from family responsibilities.
29) Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating in residential areas.
30) One advantage enjoyed by home-based businesses is the relative ease in attracting new customers.
31) Small businesses have not significantly participated in online sales.
32) Online businesses avoid the risk of failure faced by traditional start-up businesses.
33) An intrapreneur is the creative person who starts and manages a nonprofit organization.
34) Creative people working as entrepreneurs within a large organization are called intrapreneurs.
35) Entrepreneurial spirit is unique to a small business environment.
36) Large organizations encourage intrapreneurship as a strategy to improve their profitability through new products.
37) By passing the Immigration Act of 1990, the U.S. government acted to encourage entrepreneurs to immigrate to the United States.
38) The U.S. government offers investor visas to attract more entrepreneurs.
39) The position of our government is to restrict foreign entrepreneurs from operating within the U.S.
40) Business incubators provide assistance to established companies attempting to generate foreign sales.
41) A National Business Incubator Association study indicates that over 85 percent of incubator graduates remain in business.
42) Enterprise zones offer lower tax rates and government assistance to attract private business investment.
43) Independence, challenge, and opportunity are among the key reasons given by those who assume the risks of entrepreneurship.
44) Successful entrepreneurs are exclusively motivated by the desire to become rich.
45) Although corporate managers often exhibit the skills required of successful entrepreneurs, they seldom have the desire to give up the perks and fringe benefits of corporate life and start their own business.
46) To be successful, entrepreneurs are dependent on the support of others for encouragement.
47) Entrepreneurial teams increase the cooperation between marketing, production, and other functional areas of a business venture.
48) State governments create new start-up business organizations called enterprise zones that are later sold to private investors.
49) The United States government views entrepreneurship as a result of an individual's self-motivation. The government can do very little to encourage an individual to become an entrepreneur.
50) The Spotlight on Small Business box is testimonial to the fact that entrepreneurs are problem solvers.
51) According to the Spotlight on Small Business box, people in college are not ready to start their own business.
52) 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.
53) 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.
54) Luca has eliminated the risk of entrepreneurship by preparing a detailed business plan.
55) Timothy, Jude, and Eric are working in the marketing department of a multinational corporation. They each have similar backgrounds and experience and are thinking about leaving their current company to start their own business. Successful entrepreneurial teams are comprised of these types of people because similarities in knowledge and skill ensure harmony and consistency in their new business.
56) Antonio works for a textbook publisher. However, his dream is to establish a home-based business providing his services to a variety of publishers. Antonio's primary goal is to escape the 9 to 5 world of corporate publishing and to enjoy the opportunity of working for himself. Antonio is an example of a micropreneur.
57) Alex works for Wheelie's, a large corporation that designs and manufactures accessories for scooters, bicycles, and other children's motorized toys. She is a creative force within the company and has helped create and launch several new successful products. Alex is an example of an intrapreneur.
58) Grant received an e-mail stating that HE COULD EARN THOUSANDS!!!! just working a few hours from home. Most likely Grant's e-mail was a work-at-home scam.
59) When Marley created the Mar's Cookie Bars Company, she took advantage of a state-supported incubator that offered her new business low-cost office space and basic services such as accounting, legal advice, and secretarial help. Joining the incubator helped her company to survive because it provided assistance in the critical stage of its early development.
60) The principles of management of a large business are similar to the principles of management of a small business.
61) To be classified as a small business, a firm must have no more than 100 employees.
62) According to the Small Business Administration's definition, small businesses are independently owned and operated.
63) A business is considered small by comparing its size to others in the same industry.
64) Small businesses create 65% of the new jobs in the United States each year.
65) Small businesses account for over 50% of the U.S.'s gross domestic product (GDP).
66) About 80% of U.S. workers find their first job in small business.
67) Of all nonfarm businesses in the United States, almost 97% are considered small by the Small Business Administration (SBA) standards.
68) Compared to small businesses, large firms have a greater ability to provide personalized customer service.
69) Big businesses do not serve all the needs of a market.
70) The most common small business failures occur in businesses that are the easiest to start.
71) Only about 10% of all businesses qualify as small businesses using the definition of the Small Business Administration.
72) The small business sector that has the best chance of significant growth is legal services.
73) Small businesses can often provide more personalized customer service than bigger rivals.
74) Recent evidence suggests that the small business failure rate is significantly higher than previously reported.
75) Bad luck is the most often reported cause for small business failure.
76) The business opportunities with the greatest growth potential tend to be in the high technology industries.
77) The easiest businesses to start are those that offer the greatest profit potential.
78) Most business opportunities offer entrepreneurs high levels of security and profits.
79) The easiest businesses to start also have the least growth potential and the greatest failure rates.
80) While the first job for many people is working for a small business, larger corporations create most of the permanent new jobs.
81) If you are trying to prevent failure, it is a good idea to go into the business with good record-keeping techniques.
82) If you go through the exercise of preparing a business plan, only to determine that you need twice the amount of money to start the business than you have, the SBA and other expert organizations encourage you to go ahead with your plans because if you understand the market, you can use the revenues you accrue to make up the shortfall.
83) Small businesses lack the resources to compete directly with big businesses.
84) Because of their greater financial resources and expert staffs, big corporations can almost always outperform small businesses.
85) Tessa has just graduated with a business degree. Her job hunt should only focus on large corporations.
86) Kate, a manager at a small manufacturing firm, has offered to help manage a local branch of the YMCA. Unfortunately, Kate will find that the skills acquired managing a small business will not be useful in managing a nonprofit organization.
87) Your brother is a dentist and has opened a new practice in your hometown. As a business student you know that this type of business experiences low failure rates.
88) Valerie wants to start her own small business. If her primary goal is to grow quickly and earn high profits, her best chances would be in the manufacturing sector.
89) Jin Yang wants to start a small business. But he has not yet uncovered an opportunity that would offer him security and the possibility of high profits. Jin Yang will likely find that one must risk more in order to attain high profits.
90) The best way to learn about small business is to "bite the bullet" and start your own.
91) Individuals wanting to learn about small business operations are advised to learn from other entrepreneurs.
92) Many entrepreneurs got the idea for their own business from their experience of working for others.
93) Since entrepreneurs are starting new businesses, experience gained from working for an established business isn't particularly helpful.
94) Offering to manage an established business for a percentage of the profits plus a salary offers experience to the would-be entrepreneur and free time to the business owner.
95) Entrepreneurs are well advised to avoid starting businesses in the same market in which they were previously employed.
96) You can negotiate a win-win situation by offering to manage an established small business. You win from the experience; the owner wins with free time.
97) If you were to begin gathering information on a particular type of business, it is doubtful that a community college class would benefit your search because the information you would gain is too generic in nature.
98) There are several ethical considerations when starting a business, but competing against current and former work relationships is always fair game.
99) Amir hopes to start his own business someday. He should not talk to other small business owners about his plans because they might steal his ideas.
100) Riley worked as a floral designer at a floral shop in town before opening her own shop. This approach to the business is okay, but her time would be put to better use starting her own business.
101) As an employee of a small business, Dante has heard the owner is getting ready to retire. Since Dante would like to buy the business, he needs to determine how much the business is worth. In order to determine a fair price for the business, Dante should add up the market value of all of the firm's physical assets such as buildings, machinery, equipment, and inventory, and willingly pay this amount for the business.
102) The two primary concerns of an entrepreneur starting a new business are planning and record keeping.
103) According to the Small Business Administration, poor management is the cause of the majority of small business failures.
104) Business plans are necessarily a bit vague since these are prepared prior to the beginning of business operations.
105) A good business plan describes the nature of the proposed business, the target market, the competitive advantages, and the qualifications of the owners.
106) Bankers and investors require entrepreneurs to present a well-conceived business plan.
107) Getting a business plan into the hands of the right people is nearly as important as getting the right information in the plan.
108) The entrepreneur's integrity is not relevant to bankers when determining the creditworthiness of a business loan.
109) 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.
110) Since creating a detailed business plan is almost impossible, entrepreneurs should focus on the other tasks needed to get their firm started.
111) Management includes attention toward financing the business, hiring employees, marketing, and record keeping.
112) Identifying poor management as the cause of a small business failure likely covers a variety of problems.
113) Aside from personal savings, the only other viable source of financing for an entrepreneur would be funds available from friends and family.
114) Potential suppliers can be an excellent source of financing for a new business since lending money to a new customer may be very much in their own interest.
115) Angel investors are the government agencies that invest money in new companies before they go public.
116) Venture capitalists provide funds for start-up businesses in exchange for part ownership in the new firm.
117) State and local governments often act as venture capitalists.
118) While the Small Business Administration provides management advice to new business owners, it is not empowered to provide financial assistance.
119) Venture capitalists provide funds for small businesses as part of their philanthropy programs.
120) Venture capitalists prefer investing in smaller start-up businesses in order to reduce their overall risk.
121) The Small Business Administration's microloan program offers small businesses very small loans.
122) Small Business Administration microloans are based on the borrowers' integrity rather than collateral and credit history.
123) In order to qualify for a microloan from the SBA, an entrepreneur must have adequate collateral and a proven track record of success.
124) Small Business Investment Companies (SBICs) are privately owned companies licensed by the Small Business Administration to lend money to small businesses.
125) The SBA may guarantee loans made by a financial institution and repay them if the borrowers stop making payments.
126) Success in running a business depends on knowing your customers, managing your employees, and keeping efficient records.
127) In the business world, a market consists of those people who have a willingness to buy a particular product.
128) One of the greatest advantages that small businesses have over larger ones is the ability to know their customers better and to adapt quickly to the customers' needs.
129) 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.
130) As their firms grow and prosper, busy entrepreneurs take pleasure in delegating authority to others.
131) Studies show that seniority is the most important criterion when selecting employees for promotion to management positions.
132) Compared to employees of large businesses, small business employees are less satisfied with their work because they see their jobs as less challenging.
133) Hiring family members offers the best answer to the problem of attracting qualified employees.
134) Questions about how much authority to delegate and to whom, are easier issues for family-run businesses since they can't fire family.
135) With fewer employees and less revenue, small businesses have less need for detailed records than do larger business organizations.
136) Many small business owners report that they needed assistance with accounting when they first started businesses.
137) Commercial loan officers and insurance agents offer expert assistance that can be valuable to small business owners.
138) One way to control the legal costs associated with operating a small business is to purchase a prepaid legal plan.
139) Commercial loan officers serve as a resource for small business owners for information regarding risk management.
140) Many more new entrepreneurs are turning to crowdfunding sites, like Kickstarter, to raise funds for their endeavors.
141) Management includes attention toward financing the business, hiring employees, marketing, and record keeping.
142) Prior to creating a business plan, discussions with bankers and investors can help entrepreneurs determine the amount of financing available.
143) An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.
144) When writing a business plan, prospective entrepreneurs should remember to omit details regarding their experience and education since investors are only interested in the proposed business.
145) As opposed to venture capitalists, angel investors prefer to target their investments in new firms requiring large sums of money.
146) A major advantage of preparing a formal business plan is that prospective entrepreneurs must identify the resources and activities required to successfully operate their proposed venture.
147) Prospective entrepreneurs turned down by private lenders have little hope of getting financial help from the Small Business Administration, since the SBA's standards are even tougher than those of private lenders.
148) If you plan to meet face-to-face with a banker or venture capitalist, it is not necessary to submit a business plan.
149) In order to better serve their customers, small business owners should avoid delegating authority to their employees.
150) As a future entrepreneur, Brooke considered a variety of financing sources. Her discussions with a venture capitalist revealed that this type of investor expects to receive a large ownership interest in her firm.
151) Hoping to qualify for a Small Business Administration microloan, Aliana's business plan clearly pinpoints her strategy to gainfully serve her target market. Unfortunately, her lack of business experience and limited collateral greatly reduce her chances of obtaining the microloan.
152) Elliot's long-time interest in and knowledge of computers enabled him to design a new hard drive that is better than anything else on the market. Elliot's product and business plan will likely attract several sources of financing if he is willing to give up part ownership in his company.
153) Because college students realize the importance of nursing homes for our aging population, students comprise an attractive market for nursing home insurance policies.
154) Preston believes his family-run business is more likely to avoid many of the problems growing businesses have with managing employees. His attitude will likely hinder the growth of his company.
155) Rachel hopes to start her own business soon, but is concerned about her limited financial resources. She should save money by waiting to meet with lawyers and accountants until the business has grown and has been operating successfully for a few years.
156) The number of small businesses that export has increased dramatically recently.
157) Large multinational firms dominate the international market, leaving few opportunities for small businesses.
158) One advantage enjoyed by small businesses in international markets is that overseas buyers like dealing with individuals rather than large corporate bureaucracies.
159) Due in part to government support, the majority of U.S. small businesses are involved in exporting.
160) Exporting offers small businesses opportunities to reduce their dependence on domestic sales and extend product lives.
161) 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.
162) Small businesses can provide more personalized service than a large corporation to overseas customers.
163) The Internet has slowed small businesses' participation in international markets.
164) From a competitive standpoint, small businesses cannot expect to successfully compete with large corporations in international markets.
165) The only real barrier preventing small businesses from exporting is insufficient knowledge of the opportunities available.
166) As the owner of a small manufacturing business, Finn has an interest in exporting. However, he doesn't know how to get started. Fortunately, the government provides an abundance of information to encourage entrepreneurs like Finn.
167) Kyle is a recent college graduate with a business degree. While still in school, he learned that as a potential small business owner, he should focus his sights on domestic business only.
168) Entrepreneurship is
A) managing businesses for others.
B) a controlling interest in the ownership of a corporation.
C) managing businesses that operate in multiple countries.
D) accepting the risk of starting and running a business.
169) Which of the following U.S. issues does entrepreneurship most directly affect?
A) The political process
B) The ability to create jobs for others
C) Contributions of money to organizations that help people in need
D) The ability to influence national macroeconomics polices
170) Which of the following explains why individuals accept the risks of business ownership?
A) The potential for learning how to be self-disciplined
B) The sense of self-satisfaction and independence
C) The challenge of seeking power
D) The desire to work fewer hours
171) Which of the following is a characteristic of successful entrepreneurs?
A) Power-seeking
B) Relies heavily on others who believe in the business
C) Willingness and desire to follow others
D) Action-oriented
172) Which of the following best describes entrepreneurial personality traits?
A) Tolerant of uncertainty and highly energetic
B) Risk averse and self-nurturing
C) Appreciative of direction from others and risk averse
D) Preference for working fewer hours and letting others do the footwork
173) A(n) ________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product.
A) entrepreneurial team
B) joint venture
C) self-directed functional team
D) managerial task force
174) An entrepreneurial team consists of
A) managers with similar skills, abilities, and interests.
B) experienced professionals from different areas of business.
C) a group of wealthy investors who share a vision for a product.
D) representatives from management, labor, and the government who work together to solve a company's problems in a creative way.
175) Business owners who prefer to maintain their businesses at a manageable size are called
A) macropreneurs.
B) intrapreneurs.
C) micropreneurs.
D) home workers.
176) One of the challenges of running a home-based business is
A) an increase in business risk.
B) managing the extra time on your hands.
C) keeping work and family tasks separate.
D) burdensome tax laws.
177) A creative person working within a corporation to launch new products and generate new profits is known as a(n)
A) arbitrator.
B) micropreneur.
C) macropreneur.
D) intrapreneur.
178) The goal of an intrapreneur is to
A) improve quality control in a corporation's production process.
B) develop new products and generate new profits for the corporation.
C) implement cost control policies for existing products.
D) create smaller companies within larger companies.
179) The U.S. government's Immigration Act of 1990
A) encouraged entrepreneurs to come to the U.S. through "investor visas."
B) established a government program to teach American workers displaced by immigration how to start their own businesses.
C) established guidelines to help entrepreneurs recruit legal aliens as a source of low-cost labor.
D) proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses.
180) Enterprise zones are specific geographic areas that
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.
181) Business incubators are usually government-funded facilities intended to
A) provide health care benefits for small business owners and their families.
B) offer start-up firms low-cost office space and basic business services.
C) help rebuild the nation's infrastructure.
D) assist foreign investors in identifying business opportunities in the U.S.
182) Historically entrepreneurs in the U.S.
A) created wealth for themselves, but have had a minor impact on the economy as a whole.
B) started many small firms that later became major corporations employing thousands of workers.
C) experienced success only when they worked in partnership with the federal government.
D) played an important role, but are less important now in creating jobs and wealth.
183) Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?
A) It's all about profits, and the chance to make a lot of money.
B) It's about independence and the opportunity to share in the American dream.
C) It's about power and fame.
D) It's about a lot of things, but it does not include personal achievement.
184) Successful entrepreneurs are self-nurturing. This means they
A) look to others for strength and encouragement.
B) self-finance their business with no assistance from others.
C) perform all business operations by themselves.
D) believe in themselves and their ideas.
185) Which of the following statements is characteristic of entrepreneurs?
A) They like certainty.
B) They have the ability to visualize a clear path.
C) They look at problems and see opportunities.
D) They prefer to be inventive rather than worry about whether the invention solves a customer need.
186) Although successful entrepreneurs are more tolerant of uncertainty,
A) they seldom start another business after a failure.
B) they develop mental games to see themselves through the risk game, especially.
C) they always protect themselves from failure by taking out lots of insurance.
D) they strive to take calculated risks.
187) Effective entrepreneurial teams combine
A) creativity with marketing and production experience.
B) venture financing, tax benefits, and production economies.
C) scientific abilities, capital investment, and marketing skills.
D) risk tolerance, debt financing, and international experience.
188) Successful entrepreneurial teams
A) quickly organize themselves like large corporations.
B) assign only one person to new product innovation.
C) bring a variety of talent to the business venture.
D) outsource most of the details of innovation.
189) One reason we have seen continued growth in home-based businesses is
A) the location offers a more secure operational environment.
B) affordable technology makes it easier to compete.
C) people need something to do while they wait to return to work for a large corporation.
D) it is less risky to start a home-based business than other types of entrepreneurial ventures.
190) Which of the following best describes the difference between an intrapreneur and an entrepreneur?
A) Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses.
B) Intraprenuers are practical while entrepreneurs are creative.
C) Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business.
D) Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the management of all areas of a business.
191) Intrapreneurs make use of ________ to develop and launch new products and generate new profits.
A) their employer's existing human, financial, and physical resources
B) their own personal financial resources
C) government-supplied physical and financial resources
D) old ideas abandoned by entrepreneurs
192) Enterprise zones are
A) government-owned properties that are available for entrepreneurial ventures at a reduced cost.
B) similar to incubator facilities but strictly run by city and state governments.
C) blighted areas that contain toxic materials making them unsuitable for business operations.
D) specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.
193) Enterprise zones and investor visas are examples of
A) government policies that favor large corporations rather than small businesses.
B) government programs that encourage economic growth through entrepreneurship.
C) government policies designed to encourage intrapreneurs.
D) examples of private initiatives to reduce the government's role in the economy.
194) State and city governments have promoted facilities where new businesses can open up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, ________ continue to grow in popularity.
A) enterprise zones
B) incubators
C) intrapreneurial development centers
D) venture farms
195) The Spotlight on Small Business box "Student Startups" features students who
A) directed inheritance money they received into profitable business ventures.
B) turned a passion into a business opportunity.
C) realized the American dream at a very young age, and now run multimillion-dollar companies.
D) convinced banks to fund their business ideas.
196) Angelina recently left her job at a large corporation to start her own business. She knows that her decision comes with risk, but she is excited to be her own boss and to tackle the challenges that running her own company will bring. Angelina is an example of a(n)
A) intrapreneur.
B) entrepreneur.
C) venture capitalist.
D) raconteur.
197) Laila created a new piece of workout gear. She's calling it the Toned Tushie. Although she couldn't initially find potential investors, she secured a personal loan and borrowed additional money from her parents. Her drive to continue believing in her idea and to remain enthusiastic shows that Laila is
A) characteristically self-nurturing.
B) better suited to managing a nonprofit organization.
C) unaware of the risks she was taking.
D) not a true entrepreneur.
198) Apple's legendary smart team is an example of a company that succeeded by
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.
199) Elise recently quit her job at a well-known insurance company and started a home-based business preparing medical transcriptions for doctors. Based on recent statistics, she can expect
A) a negative reaction from friends and family who wonder when she will get a real job.
B) the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service.
C) the government will discourage her attempts to create a home-based business in the hopes that she will opt for locating in an enterprise zone.
D) to find security, routine, and a paycheck from her new enterprise.
200) Eddie is an inventive engineering new graduate who just started working for a large company that makes medical products for both hospital and patient use. One of his primary responsibilities is to initiate and develop new products to complement the firm's current product line. Eddie's position is ________.
A) intrapreneurial
B) entrepreneurial
C) an outside consultant for other firms
D) micropreneurial
201) Northeast City College received a government grant to create a business incubator. Once completed, Northeast City College's facility will offer
A) local government agencies assistance in obtaining funds for urban renewal.
B) area businesses advice on employee benefits and ways to reduce taxes.
C) venture capitalists an opportunity to identify new entrepreneurs.
D) new businesses low-cost office space with basic business services.
202) Tucker is an intrapreneur for a multinational wearable electronics company. Which statement best describes Tucker's duty?
A) He is expected to recruit new managerial talent for his firm.
B) He will use the firm's existing resources to develop new products.
C) He is concerned mainly with improving the firm's public image.
D) He will concentrate on creating new ventures that can be spun off to become independent firms.
203) Matteo just left the Army after 20 years of service. During his service, he managed to save a little money and is now entitled to a government pension. His wants to go back to his home state of Arizona and start manufacturing small, solar-powered panels for residential use. Although he knows he needs a storefront and an industrial site, he is not 100 percent convinced about where to locate. However, he does know for certain that one of his top priorities is to limit his tax liability associated with this new business. What would you suggest for Matteo?
A) He should make certain he is deeply passionate about the product he is developing, before he explores the need.
B) He should keep it small, especially in the beginning.
C) He should take out a lot of insurance in case he finds out that he has not paid enough taxes.
D) He should check out the enterprise zones in Arizona.
204) Caleb inherited a successful dry cleaning business from his parents. Just as his parents did, he offered high-quality service to all the customers he served. As the surrounding towns grew, several customers recommended that Caleb expand the business to offer service in new locations. He chose to maintain only one operation, so as not to lose control and to keep his work life and home life balanced. Caleb is a good example of a(n) ________.
A) small business affiliate
B) intrapreneur
C) micropreneur
D) enterprise zone participant
205) Located at Monsanto's world headquarters, the Nidus Center is a unique ________ facility. The tenants are biotechnology companies who are at various stages of product development. The agricultural giant, Monsanto, the Danforth Foundation, Washington University-St. Louis, Saint Louis University, and several venture capital firms contribute seed money for these small start-up ventures that receive approval to further develop their ideas at the Nidus Center.
A) incubator
B) intrapreneurial
C) enterprise zone
D) micropreneurial
206) Small businesses
A) deal with similar management issues that large companies face.
B) deal with very different management issues due to the very different management challenges experienced by small businesses.
C) do not seek government funding due to the fact that the federal government has made it very clear that it must support large operations before small operations.
D) concern themselves with state-of-the-art information and accounting technology but not employee relations due to their challenge to financially support employee benefits programs.
207) The Small Business Administration defines a small business as a firm that:
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.
208) Small businesses create about ________ percent of the new jobs in the United States.
A) 25
B) 45
C) 65
D) 85
209) A business's size is measured
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.
210) Some people argue that small business failures are
A) lower than traditionally reported.
B) understated to keep small business creation enthusiasm.
C) accurate and alarming.
D) inconclusive.
211) When comparing small businesses to their larger competitors, it is clear that
A) bigger is always better.
B) small firms can always outperform big firms on a level playing field.
C) small firms often can offer more personalized customer services than big firms.
D) small firms are slower to respond to opportunities than are large firms.
212) Small businesses are important to the U.S. economy because
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.
213) Using the analogy of boulders vs. sand for filling a hole, the textbook points out that
A) small businesses are employing a record number of employees because they have to work twice as hard at producing the same amount of output as a large competitor.
B) small businesses can serve niche markets that larger firms do not serve well.
C) the sand represents the small businesses that start and fail each year, while the boulders represent the large companies whose resources permit them to stay the course.
D) large companies serve market niches so much better than small companies.
214) Which of the following employment statistics about small businesses is true?
A) Small businesses create about 15% of all new jobs in the U.S.
B) The number of women owning small businesses has remained constant.
C) A great majority of American workers find their first jobs with a small business.
D) Growth of minority-owned businesses in the U.S. is declining.
215) According to SBA guidelines, a manufacturing firm with 1,000 employees
A) would be classified as a large firm in the industrial sector.
B) may be classified as a small business depending upon the size of others in the same industry.
C) is too small to achieve the efficiencies of large-scale production.
D) is classified as an S corporation.
216) Which of the following statements accurately depicts an advantage that small business has over big business?
A) If the small business owner can project his business as being big, if not very similar to big businesses that sell in the same industry, then he will realize a significant advantage.
B) The size of the business (small being better in this case) is an important consideration in the management of legal, payroll, and tax concerns.
C) A small business can maneuver and change quicker than most large businesses can. It can react to market conditions and customer concerns much faster.
D) The slower pace of small businesses translates into better quality for its customers.
217) Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider starting a business in
A) the manufacturing sector.
B) the food service industry.
C) a low-risk industry.
D) the agriculture sector.
218) A review of small business successes and failures indicates that the
A) businesses that are easiest to start offer the greatest potential for long-term growth and profits.
B) restaurant industry offers the least risk for entrepreneurs.
C) businesses with the potential for high profit levels tend to be difficult to start and hard to keep going.
D) reason the service sector is rapidly growing is that these firms are easy to start and keep going, and offer high levels of security and growth potential.
219) Manuel is focusing his attention on finding full-time employment now that he has graduated. He has decided to narrow his job search to jobs with a major corporation and ignore the possibility of working for a small business. His job search strategy
A) makes sense because managerial skills are best developed by working for big firms.
B) is smart because major corporations represent the most important source of employment growth in the United States.
C) indicates that Manuel's passion is to fulfill his dream of owning his own business.
D) will likely limit his job prospects since most new jobs are with small businesses.
220) Quinn has landed a management position with a pioneering new small business after many years of working as a regional manager for a nationally known nonprofit. As Quinn starts her new job, she is likely to find that
A) due to the significant differences in large and small firms, her previous experience will be of little value in her new position.
B) the principles of management are much the same at large and small firms.
C) nonprofit organizations are motivated by their desire to help people and so financial management is of little concern.
D) planning is more important to a nonprofit organization and less important to a small business so she will need to adjust the time she spends on the planning function.
221) As a result of recent downsizing at his firm, Dominic lost his job as an IT manager for a large telecommunications company. A true, self-confirmed computer nerd, Dominic knew that several of his past contacts often outsourced their computer problems. He decided it was a good time to test the waters and see if he could secure enough computer clients to be in business for himself. His success demonstrated that
A) starting your own business can quickly provide security and profits.
B) people always tend to hire people they know from past associations.
C) the service sector is not an area of significant growth.
D) successful big businesses often create profitable opportunities for small businesses.
222) 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?
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.
223) Dr. Pearl White just graduated from dental school. She is hoping to acquire the necessary funding to start her own dental practice. One advantage of this type of business is
A) above-average opportunity to borrow funds at a high interest rate.
B) nearly unlimited growth potential.
C) the service is individualized and not easily mass-produced.
D) very low start-up costs.
224) 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
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.
225) Austin, Aiden, and Zara wanted to open A2Z Sports Bar that serves a unique offering of beer, weekend entertainment, and a limited menu of appetizers. In one of the preliminary meetings, Zara presented a list of reasons that small businesses fail. Although many of the ideas on this list were applicable to many types of business, one challenge pertained specifically to the restaurant and bar business. The challenge he referred to was
A) underestimating how much time it will take to build a market.
B) borrowing money without planning just how and when to pay it back.
C) carrying habits of personal extravagance into the business.
D) some of the easiest businesses to start have the least growth prospects and greatest failure rates.
226) Scarlett is graduating from culinary school soon and she often imagines opening her own comfort food restaurant. Her other passion is skiing in Colorado, where she travels to four or five times every year. As her small business advisor, you believe it necessary to provide her with information that will help her make good business decisions. Which of the following would be helpful for Scarlett to know?
A) Restaurants are relatively easy businesses to start, but are labor intensive and also have the greatest failure rate.
B) Restaurants are not the easiest type of business to start, but once you get it going, you will have plenty of time for skiing.
C) Most restaurant owners get rich if they open their own, independent restaurant as opposed to starting a franchised operation.
D) Franchised operations will take less time on the part of the owner than a regular independently owned operation. If she opens a franchise, she will have more time for creativity in the business, and more time for skiing too.
227) A small business management course at a community college may offer entrepreneurs an opportunity to
A) meet with experienced entrepreneurs and learn from their advice.
B) try out ideas on a computer simulation before risking real time and money.
C) listen to a qualified instructor solve all of the problems of small business owners.
D) be part of a group that will include angel investors.
228) One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on
A) the prospects for business competition.
B) the current owner's retirement plan.
C) the amount of government contracts the company has.
D) the value of what the business owns, what it earns, and what makes it unique.
229) Conversations with people who start their own business often reveal that
A) many small business owners got their entrepreneurial idea from a previous job.
B) it is unusual for experienced corporate managers to start their own businesses.
C) the most successful entrepreneurs often start their business ventures right after high school.
D) most small business owners begin with significant personal wealth.
230) For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college
A) is likely to be wasted time since college courses tend to be too theoretical.
B) can be helpful by offering them an opportunity to meet experienced small business owners.
C) serves as supplementary information, only after starting their business venture.
D) seldom provides you with information to help make small business decisions.
231) Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture?
A) Avoid the temptation of buying an existing firm. Build your own reputation and make your own mistakes.
B) Gain experience by working for a successful businessperson.
C) Postpone consulting with an accountant or lawyer until you can afford their services.
D) Jump in quickly, before the market conditions change and opportunities are lost.
232) Successful small business owners are
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.
233) When starting a small business, it's important to remember
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.
234) The Making Ethical Decisions box "Should You Stay or Should You Go?" addresses a dilemma worthy of consideration. It describes
A) an unethical situation where the business owner's need for capital causes him/her to delay all payments to suppliers for 120 days, forcing several of his close business relationships out of business.
B) the slow death of a business and how important it is to delay payments, sell off assets, and do everything possible to save a failing business except dismissing employees who need their jobs for survival.
C) ethical decisions that need to be considered when employees leave a faltering business to start their own, eventually competing against their previous employer.
D) the unethical and disloyal decision to leave your family business and start your own, taking with you all the family business's trade secrets.
235) 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
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.
236) Lily, an upperclassman at Riverside College, hopes to start her own business after graduation. In an effort to learn as much as she can about small business management, she talked to four friends who each offered their advice. Which of these suggestions is likely to help her the most?
A) The best way to learn about running a business is by getting hands-on experience. You should quit school and put your dream into action.
B) Take courses related to small business management and then look for a job with a successful businessperson, preferably in your field of interest.
C) Since every business is unique, don't worry about advice from others. Go to a bank, get a business loan, and live your dream.
D) Starting and managing a small business requires little more than common sense. If your idea is unique, hard work will guarantee your success.
237) Isaac benefited from his experience working for an established private company that provided state-of-the-art lighting for music venues around town. Although confident that he could start his own lighting business, he had limited capital to buy the necessary equipment needed to successfully compete with established companies. Which of the following strategies would best help Isaac achieve his goal of business ownership?
A) Begin by offering to take over management of his employer's business, allowing the owner to enjoy some leisure time.
B) Consider working for a major corporation, live modestly, and save until he has sufficient funds to start his business.
C) Enroll in the closest university and apply for student loans.
D) Open his business and trust that his work experience will bring him success even with insufficient capital.
238) 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
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.
239) Two key management functions that need particular attention when starting a business are
A) human relations and accounting.
B) planning and financing.
C) marketing and public relations.
D) staffing and controlling.
240) A ________ is a written document that details the business idea, the target market and the business's competitive advantage, financial resources available for the business, and the qualification of the management.
A) feasibility product
B) marketing plan
C) business plan
D) statement of intent
241) The business plan will include ________.
A) an analysis of the competition
B) names of banks the owner plans to visit
C) import/export information
D) names of employees
242) A detailed written statement that describes the nature of the business, the target market, the firm's competitive advantages, as well as the owner's resources and qualifications is a
A) business plan.
B) entrepreneurial mission statement.
C) profit and loss statement.
D) professional action plan.
243) Entrepreneurs seeking financial support from bankers and potential investors should
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.
244) Bankers and potential investors are likely to read ________ first.
A) the executive summary
B) the marketing plan
C) the qualifications of the management team
D) the analysis of the competition
245) After personal savings, the next largest source of capital for entrepreneurs is from
A) large multinational banks.
B) the Small Business Administration.
C) state and local governments.
D) friends and family.
246) ________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies.
A) Leveraged buyout specialists
B) Angel investors
C) Venture investors
D) Corporate raider investors
247) Due to the credit crunch that developed during the Great Recession, many small businesses found that ________ were more willing to lend money to smaller operations.
A) large corporations
B) credit card companies
C) international banks
D) smaller, community banks
248) A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a
A) corporate raider.
B) takeover specialist.
C) financial capitalist.
D) venture capitalist.
249) Which of the following government agencies is responsible for encouraging the development of small business?
A) Small Business Administration
B) Federal Trade Commission
C) Entrepreneur Assistance Center
D) Federal Microloan Authority
250) Which of the following sources of investment is the LEAST likely type available to entrepreneurs?
A) Angel investors
B) Small Business Administration loans
C) Venture capitalists
D) Family and friends
251) The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their
A) collateral.
B) credit history.
C) previous business success.
D) integrity and sound business idea.
252) A Small Business Investment Company (SBIC) is a(n)
A) agency of the federal government that loans money to high-tech firms.
B) private investment company that is licensed by the SBA to make loans to small businesses.
C) private firm that offers loans to small businesses in return for a share of ownership in the firm.
D) agency set up by state governments to provide managerial advice and support to small businesses.
253) One of the best places for young entrepreneurs to start shopping for an SBA loan is a
A) Small Business Development Center.
B) financial institution specializing in business loans.
C) college or university financial aid office.
D) website for the Venture Capitalists Association.
254) A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.
A) market
B) consumer cooperative
C) consumer collective
D) buyer's cooperative
255) To be considered part of a market, an individual must
A) be a registered buyer.
B) have made a purchase within the past 30 days.
C) know the names and addresses of two or more sellers.
D) have both a willingness to buy and the financial resources needed to buy.
256) Small business owners often struggle in attracting qualified workers. Which of the following contributes to this problem?
A) Managers in small firms tend to be disrespectful to the workers.
B) Owners will not often listen to ideas suggested by the workers.
C) Employee relations are especially poor in small firms.
D) Many jobs in small firms have low pay and few benefits.
257) Employees of small businesses often have greater job satisfaction than do employees of larger firms. One reason for this difference in job satisfaction is that employees of small businesses often
A) earn higher wages.
B) receive more vacation time.
C) get more respect from their bosses.
D) have more job security and better fringe benefits.
258) A new business that sets up a(n) ________ from the start is saving itself time and grief later.
A) angel investment network
B) good accounting system
C) detailed supplier network
D) vertical marketing system
259) Small businesses must seek advice from outside experts. In order to put together official documents such as leases, contracts, and partnership agreements, it is important to seek the advice of ________.
A) a friend who has already started a business.
B) a competitor in a similar business.
C) an attorney.
D) a marketing expert.
260) A(n) ________ is a valuable source of information regarding techniques to reduce a firm's exposure to risk.
A) insurance agent
B) accountant
C) liability assessor
D) union business agent
261) Similar to how large businesses proceed, small businesses make marketing decisions ________.
A) after the product or service is developed.
B) before the business is funded.
C) at the same time that they hire employees, research for an accountant, and prepare the business plan.
D) before a product is developed or store is opened.
262) The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called:
A) the Small Business Council of Volunteers (SBCV).
B) Partners in Service and Economic Progress (PSEP).
C) Small Business Counselors Incorporated (SBCI).
D) the Service Corps of Retired Executives (SCORE).
263) Entrepreneurs applying for a bank loan should realize that bankers will
A) expect to receive a share of ownership in the business in exchange for their loan.
B) expect the entrepreneur to provide a business plan.
C) generally make loans only to small businesses in dot-com related industries.
D) offer only short-term financing.
264) A good business plan will
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.
265) The executive summary section of the business plan contains
A) computerized information that readers can access interactively.
B) information that will capture the attention of bankers and other investors who receive many business plans every day.
C) qualifications, experience, and education of the entrepreneur and prospective employees.
D) a financial summary prepared by the business's accountant.
266) When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will
A) charge an interest rate that is much higher than any other lender.
B) not be interested in the management of the business.
C) expect an ownership stake in the company in exchange for financial backing.
D) demand that the money be repaid within 90 days or less.
267) A market consists of potential buyers of a good or service. However, for a market to exist
A) the business requires wholesalers and retailers.
B) one firm must dominate in sales and product development.
C) people must have unsatisfied wants and needs as well as a willingness and ability to buy.
D) the product must be laboratory tested and approved by the Food and Drug Administration (FDA).
268) Small business employees
A) usually dislike their jobs and look forward to finding employment with major corporations.
B) find their jobs less challenging than a similar job in a large corporation.
C) usually get paid higher wages than workers in large corporations.
D) often find more job satisfaction than their counterparts in big business.
269) Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm's resources is
A) for the owner(s) to trust his/her common sense.
B) hire a full-time lawyer and accountant who work exclusively for the small business.
C) defer making decisions regarding these issues until the company is bigger.
D) seek and pay for expert guidance and assistance.
270) In order to secure financing for Bitty Bytes, a mobile bakery business that services several large Silicon Valley firms, Betty demonstrated her unwavering aspiration to get her business started by visiting several bankers with ________.
A) her insurance agent.
B) her business plan.
C) her venture capitalist.
D) her idea.
271) In order to improve his chances of small business success, DeMarcus worked hard to prepare his business plan. Most often, a positive outcome of this exercise is
A) the plan will meet federal reporting requirements of the Internal Revenue Service.
B) the plan ensures financing will be available from the Small Business Administration.
C) the plan enables DeMarcus to think carefully about all aspects of his business idea.
D) the plan will protect DeMarcus from failure.
272) For several years, Addison has volunteered to play the piano and sing at a local nursing home. Now, Addison has decided the time was right to get into the growing eldercare market. She created Music and Memories, a nonprofit corporation that would hire local talent to perform her own music productions directed toward this market. In order to write and produce several productions each year, Addison needed start-up funds. An instructor at the local community college suggested that she begin by ________, because this effort would help introduce her idea to interested investors as well as suggest government grant applications that Addison might pursue.
A) preparing her business plan
B) finding talented performers
C) writing themed performances such as a Thanksgiving concert and a Valentine's Day concert
D) developing a list of start-up costs
273) As a high net worth individual, Aria searches for developing companies in need of additional funding to achieve their goals. In return for this ________, she expects to give up some percentage of ownership in the business.
A) analysis
B) venture capital
C) corporate loan
D) securities investment
274) Skylar is an angel investor. This means that he
A) invests his money in new businesses with potential for growth, hoping for a good return on his investment if they go public.
B) creates business incubators for start-up web-based firms.
C) invests in nonprofits that plan to change their status when they double in size.
D) comes to the rescue of firms who default on their bank loans.
275) 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
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.
276) Francisco came to the U.S. on a swimming scholarship. After a few months of frustration with trying to find the swim goggles he prefers from home, he created a website that selling specialty goggles for swimming, skiing, and snowboarding. Before launching the website and filling orders, Francisco spent a few months going to swim meets and gathering preferences about goggles from other international swimmers. Francisco's actions
A) showed that he had a ready market for this product.
B) demonstrated that he had little experience with this product.
C) showed that he was promoting the website before it launched.
D) demonstrated his need to better understand the market.
277) Ryan was called by one of his regular customers asking if he had time to repair some broken sprinkler heads on that customer's underground sprinkling system. Although it was already 6:00 p.m. and he already put in a full day of work, he turned his car around and headed for the customer's house. As a small business owner, Ryan demonstrates
A) his need for additional cash flow.
B) his ability to easily adapt and respond to his customer's needs.
C) the fact that it is difficult to find employees willing to go the extra mile for a small business because benefits are nonexistent.
D) that considering the fact that sprinkler heads are constantly breaking and need repair, his service is overpriced.
278) Mohamed's four employees have been with him since he opened Employment Experts, Inc., nearly a decade ago. As he anticipates staffing his new branch office, he decides none of these four long-time employees are ready to manage the office. Faced with this difficult situation, what should Mohamed do?
A) He should appoint one of the three anyway to show that he appreciates their loyalty and commitment.
B) He should run the new branch himself and appoint one of the three to take over the original office.
C) He should hire a new qualified employee to manage the office since utilizing his unready employees could be detrimental to the business.
D) He should appoint all three to the new branch and let them run it using a team approach.
279) After Abby graduated from college last year, her uncle created an accounting position for her in his business. Her older brother is in charge of purchasing inventory for the store, yet often the store runs out of popular items or is overstocked with products that must be marked down to be sold. Abby is confident that her brother is more suited for handling accounting and finance, while she has a sense of what sells and how much sells. Although she has spoken with her uncle about it a couple of times, he seems reluctant to change. As the founder of the business, he may
A) find it difficult to remove family members from positions, even if it is not good for the business.
B) find it difficult to retrain Abby for the job, and even though his business is losing opportunities, he will stay the course.
C) know that profit margins have declined, but he doesn't care.
D) have a bigger picture of things, and not feel the need to respond to a family member's request.
280) 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
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.
281) After retiring as a telecommunications executive, Bruce joined SCORE. As a SCORE counselor Bruce will
A) provide venture capital funds for aspiring small businesspeople.
B) visit high schools to advise students who are thinking about starting their own business.
C) help in the research and development of new products for entrepreneurs to market.
D) provide consulting services to small businesses for free.
282) The size of the world market is about
A) 500 million
B) 7 billion
C) 7 million
D) 10 trillion
283) Increased participation in small business exporting owes credit to ________.
A) political constituents who have made inroads abroad.
B) large events such as the Olympics that have brought attention to the potential in world markets.
C) technological advances such as the Internet and PayPal for safely fulfilling orders.
D) partnerships that small businesses have formed with large businesses.
284) One of the hurdles small businesses face when deciding to export is
A) financing is often difficult to find.
B) overseas buyers prefer dealing with large corporations.
C) smaller companies must wait in line after large companies to qualify for tariffs.
D) American products are perceived as inferior.
285) One reason why many U.S. small businesses are not involved in exporting is
A) there is a limited market for their products.
B) the government's new homeland security programs limit opportunities for small businesses.
C) many of these firms do not know how to get started.
D) U.S. products are perceived as inferior.
286) The SBA's ________ program provides export-financing opportunities for small businesses.
A) Global Trade funding
B) Homeland Security funding
C) Export Express loan
D) International Monetary loan
287) Which of the following best describes the outlook for small businesses in international markets?
A) The world is a larger, and potentially a more lucrative market than the U.S. domestic market.
B) The threat of terrorist activities prevents small businesses from competing internationally.
C) Most foreign buyers prefer to deal with large, well-known corporations rather than small businesses.
D) Higher business costs eliminate the profit opportunities in global markets.
288) Small businesses often have advantages in international markets. Which best describes one those advantages?
A) They have greater expertise in managing the paperwork required to sell goods in international markets.
B) They have a better understanding of the cultural differences involved.
C) They can provide individualized customer service as opposed to impersonal corporate bureaucracies.
D) They have the ability to obtain financing through the International Monetary Fund.
289) Luxe Labels, LLC, exports specialty printing equipment for the custom labeling, flexible packaging, and carton industry. Thanks to increased support from ________, this company's sales to Brazilian companies and other global opportunities have significantly increased.
A) its newly revised website
B) Department of Commerce's Bureau of Industry and Security
C) the FDA
D) local politicians
290) Arturo is a partner in a firm that specializes in producing vitamins and health food products. While the business is considered small by U.S. standards, he is attempting to persuade his partner to expand internationally. Arturo would list which of the following as an advantage of going global?
A) Exporting can help sell excess inventory.
B) Marketing programs benefit from the cultural similarities in prospective markets.
C) Financing can easily be obtained to expand internationally.
D) Selling your products in other markets reduces their life cycle, making them more attractive.
291) Antoine is considering marketing his bicycles in Brazil. If he enters the Brazilian market, he is likely to learn that
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.
292) Not everyone dreams of owning their own business. Identify and describe at least three attributes of successful entrepreneurs.
293) What is an entrepreneurial team? What benefits does a team offer compared to an individual entrepreneur?
294) List and discuss at least three causes of small business failure.
295) Discuss the benefits exporting offers to small businesses. Given these benefits, why don't more small firms sell in international markets?
296) Discuss several ways the Small Business Administration assists entrepreneurs.
Mini-Case
Pepe Pieman believes that pizza is a much more versatile meal than most people realize. As the national marketing manager for Pizza Pals, he has watched how consumers ate up barbecue pizza, Hawaiian pizza, Mexican pizza, and other new and unique combinations. His superiors, however, met his suggestions for other unusual pizzas with a negative response. Even some of his teammates laughed at his ideas. Pepe's confidence in his ability to understand the market has led him to focus on planning a business of his own. Pepe realizes that he will take a risk when he leaves his job with Pizza Pals and sets off on a new endeavor: Pepe's Pizzazzeria. Pepe is excited about the potential of profitably catering to the unmet desires of pizza consumers.
297) Given Pepe's willingness to accept the risks of opening and running Pepe's Pizzazzeria, he is clearly an example of a(n)
A) arbitrageur.
B) intrapreneur.
C) gambler.
D) entrepreneur.
298) Pepe remains confident and enthusiastic even though his colleagues have poked fun at his ideas. This shows that Pepe is
A) self-disciplined.
B) self-nurturing.
C) self-generating.
D) auto-inspirational.
299) Pepe is confident that Pepe's Pizzazzeria will be a success, but only if he has enough money to do things right. Since Pepe has very little personal wealth, he knows he must find financial assistance. In order prepare for meetings with bankers and potential investors, Pepe should
A) hire a public relations firm to develop promotional materials.
B) develop a business plan.
C) read a book on entrepreneurship.
D) create a partnership contract.
300) Pepe has asked about the possibility of obtaining a microloan from the SBA. This type of loan is awarded primarily on the basis of the
A) borrower's integrity and the soundness of the business idea.
B) amount of collateral the borrower can pledge.
C) borrower's credit history and record of previous business success.
D) age of the borrower, since only senior citizens qualify.
301) Pepe is positive he knows a lot about marketing. But he is not as confident in his skills within the legal or financial aspects of starting a new business. He wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting Pepe's Pizzazzeria up and running. Pepe should
A) delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year.
B) trust his basic instincts and try to put it together without the advice of lawyers and accountants.
C) consult with a lawyer and accountant even though the budget is tight.
D) immediately hire full-time lawyers and accountants for his staff.
302) Since Pepe has worked in marketing for a large corporation before getting into the pizza business
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.
303) As a former classmate of Pepe's at the nearby university, you remind him what you both learned in your small business management class several years ago. What would you remind him?
A) Restaurants are easy to start up, but difficult to keep going.
B) Restaurants are probably the most difficult type of business to start up, due to the labor-intensive aspects of the business.
C) Experts believe that restaurants have a high profit potential, due the fact that there is not much direct competition.
D) Restaurants are easy to start up and have great profit potential.
Document Information
Connected Book
Explore recommendations drawn directly from what you're reading
Chapter 4 Demanding Ethical And Socially Responsible Behavior
DOCX Ch. 4
Chapter 5 How To Form A Business
DOCX Ch. 5
Chapter 6 Entrepreneurship And Starting A Small Business
DOCX Ch. 6 Current
Chapter 7 Management And Leadership
DOCX Ch. 7
Chapter 8 Structuring Organizations For Today'S Challenges
DOCX Ch. 8