Defining the target market is one of the hardest and most important things the
entrepreneur can do in the business plan.
Companies do not have an ethical obligation to inform consumers regarding their
products.
A valuable shoplifting reduction technique is to train employees on what to watch for in
potential shoplifters.
Despite the fact that AIDS is becoming more common in the workplace, few businesses
are prepared to deal with it.
Generally speaking, all growing companies need to borrow money at some point.
It is the position of your authors that companies that do not offer quality customer
service will eventually fail, for that reason.
To avoid becoming liable for corporate actions, officers should ensure that they hold
annual meetings, keep minutes of those meetings, make sure the board of directors
makes all decisions, etc.
The EOQ solution balances the ordering costs and the carrying costs of an inventory
item so that total costs are minimized.
Banner adsare small rectangular ads that reside on Web sites, much like roadside
billboards, touting a company’s product or service.
“Playing together” at leisure activities makes it easier for family members to cooperate
at work activities in the family business.
Under the “what-is-affordable method” of establishing an advertising budget,
advertising is viewed as an investment which produces sales and profits in the future.
Flextime is an arrangement where the employees both share responsibility for a single
job and may choose where and when they accomplish the assigned tasks.
It is important that any ethical code is enforced fairly and consistently.
One of the strategic management processes is to translate strategic plans into
unachievable plans.
A letter of creditis a document the seller draws on the buyer, requiring the buyer to pay
the face amount (the purchase price of the goods) either on sight (a sight draft) or on a
specified date (a time draft) once the goods are shipped.
A variation of outdoor advertising is transit advertising.
Proper pricing is a balancing act, walking between a high enough price to cover profit
margins and convey the right image and low enough to attract customers.
There are no restrictions on how partners distribute the company’s profits as long as
they are consistent with the partnership agreement and do not violate the rights of any
partner.
Choosing the right source of capital is as important as choosing the right form of
ownership for the small business owner.
Franchisors can require franchisees to purchase materials and supplies only from
approved suppliers.
When watching for shoplifters, owners should remember that impulse shoplifters tend
to work alone while juveniles and professionals work in groups.
Goodwill is a capital asset that the business buyer cannot depreciate or amortize for tax
purposes.
Implementing TQM means a radical change in the management of information in that
much more information must be shared with workers.
Signs are one of the most expensive and least effective ways available to small
businesses for communicating with customers.
How the product will be distributed should be explained in the plan of operation.
Newspaper ad space is typically sold by lines and columns or inches and columns.
Entrepreneurs bootstrap their companies.
The only way to achieve diversity in the small business is to let it take care of itself as
society increases in diversity.
NAFTA is an agreement between the United States, Canada, Mexico, Argentina, and
Chile, forming a free trade arena among these countries.
The most popular form of ownership in the United States is the partnership.
Most entrepreneurs can neglect the purchasing function because they buy so little from
vendors they don’t gain anything by spending time working on improving it.
The first step in preparing a break-even analysis is to break business expenses down
into “fixed” and “variable” categories.
A goal is the master plan that covers all of the major parts of the organization and ties
them together into a unified whole.
One of the most reliable methods of determining an adequate minimum cash balance is
using past experience.
GATT will probably bring 2 million jobs and as much as $1 trillion to the U.S. economy
over the next decade.
Start-up companies often use trade credit from suppliers to buy equipment and fixtures
for their business.
The form of advertising that gives the small business owner a preselected audience and
an economical way to make sales calls would be:
A) outdoor advertising.
B) trade shows.
C) directories.
D) direct mail.
The maximum amount of a disaster assistance loan is ________ dollars.
A) 100,000
B) 500,000
C) 1 million
D) 2 million
A ________ agreement prevents the sale of insider shares for a specific time period.
A) lock-up
B) pre-nuptial
C) road show
D) registration
The small business owner who sells merchandise on a consignment basis realizes the
following advantages except:
A) the owner does not have to invest money in these inventory items, but the
merchandise on hand is available for sale.
B) the owner does not make payment to the consignor until the item is sold.
C) because the consignment relationship is founded on the law of agency, the consignor
never takes title to the merchandise and does not bear the risk of loss for the goods.
D) the supplier normally plans and sets up displays for the merchandise and is
responsible for maintaining it.
Timex designs a set of newspaper ads promoting its watches, making them available at
no cost to jewelers selling its watches so they can add their names, addresses, and
phone numbers. It is using ________ advertising.
A) institutional
B) generic
C) cooperative
D) shared
Your cash budget and an explanation of how much money you need to make your
company and product a long-term success are the subject matter of the:
A) financial plan.
B) strategic plan.
C) business strategic plan.
D) strategic action plan.
When it comes to enforcing employment laws and the job interviewing process, the
EEOC:
A) flatly outlaws certain specific questions.
B) watches for questions that can lead to employment discrimination.
C) provides an interviewing guide with approved questions for use by the entrepreneur.
D) is largely unconcerned about job interviews in small businesses unless someone files
a complaint.
Many small businesses build a(n) ________, or cushion, into their inventories in case
demand runs ahead of the anticipated usage rate.
A) safety stock
B) lead time
C) EOQ
D) stockout point
Successful copreneurs are marked by which of the following characteristics?
A) Distinct and different business and life goals
B) A clear delineation of who is the superior partner and who is the subordinate partner
C) A blending of responsibilities, roles, and authority
D) Mutual respect for each other’s talents
Some small businesses create innovations ________ in response to customer feedback
or changing market conditions.
A) responsibly
B) compassionately
C) reactively
D) proactively
A great source that profiles a variety of industries and offers projections for the future
trends is:
A) the Handbook.
B) an encyclopedia.
C) the Beige Book.
D) the Blue Book.
The first line of defense against bad debt losses is:
A) screening customers carefully before granting them credit.
B) establishing a firm credit policy in writing.
C) developing a policy for pursuing past-due accounts.
D) creating a thorough credit application.
When conducting a physical inventory, ________ involves counting a number of items
on a continuous basis.
A) semi cycle counting
B) cycle counting
C) perpetual inventory
D) None of the above
The reality of “going global” is that the entrepreneur must understand the needs of the:
A) suppliers.
B) government.
C) customers.
D) employees.
________ financing includes the personal investment of the owners and is often called
“risk capital.”
A) Equity
B) Asset-based
C) Debt
D) Growth
A company may have a powerful competitive advantage, but it is wasted unless:
A) the owner has communicated that advantage to workers.
B) the customers are recommending the company to their friends.
C) the workers communicate it to customers and potential customers.
D) All of the above
Kleptomaniacs have a compulsive need to steal even though they have little, if any,
need for the items they shoplift. Kleptomaniacs account for less than ________ percent
of shoplifters.
A) 10
B) 5
C) 7
D) 15
Some suggestions for maintaining family relationships and friendships when borrowing
for a business are:
A) keep the arrangement strictly family.
B) borrow as much as you can.
C) an oral contract is as good as a written contract.
D) treat the money as “bridge financing.”
A ________ organization uses its revenues to pursue social value rather than create
personal value for investors.
A) business
B) nonprofit
C) venture
D) corporate
________ is a tool that measures a Web site’s ability to attract customers, generate sales,
and keep customers coming back, help entrepreneurs know what worksand what
doesn’ton the Web.
A) A counter
B) Web analytics
C) A Web designer
D) A server application
Exchanging goods and services for other goods and services, or ________, is an
effective way for a small business to conserve cash.
A) leasing
B) bartering
C) arbitraging
D) credit sales
________ is drawing customers into a store by creating a kaleidoscope of sights,
sounds, smells, and activities, all designed to entertain and, of course, to sell.
A) Retailing
B) Entertailing
C) Etailing
D) Merchandising
Determining factors of setting up or ordering costs for products are:
A) the various expenses incurred in actually ordering materials.
B) the various expenses incurred in actually ordering inventory.
C) setting up the production line to manufacture.
D) All of the above
A company’s culture:
A) plays an important part in the development of the company’s competitive advantage.
B) generally has little effect on employee behavior due to the more powerful influence
of national culture.
C) is relatively easy to change and adapt to changing company strategies.
D) arises more from the employees than from the founder, emphasizing the importance
of the hiring process.
Which of the following is an advantage of outdoor ads?
A) Prominence of the ads
B) Narrow reach
C) Long exposure
D) Flexibility
________ is a technique in which a small firm marks down the price of a popular item
below its normal price in an effort to increase customer traffic and to boost sales of
other items.
A) Odd pricing
B) Leader pricing
C) Price lining
D) Suggested retail pricing
Time compression management (TCM) involves:
A) speeding new products to market.
B) enhancing the quality of existing products.
C) decreasing the time it takes a product to move from introduction to the maturity
stage of the product life cycle.
D) shortening the sales clerks’ response time to customers entering the retail store and
then being served.
What is the synonym for capacity?
A) Capital
B) Cash flow
C) Collateral
D) Credit
Candi is thinking through a number of management issues in making her exporting
decision. She is thinking about her company’s ________ capacity when she is thinking
about how exporting will affect meeting domestic orders, her pricing structure,
collection process, and what it will cost her for the company to make enough product
for foreign export.
A) financial
B) management
C) production
D) marketing
Unlike entrepreneurs of the past, today’s entrepreneurs:
A) are finding more government interest and funding for business start-ups than ever
before.
B) find fewer closed doors as small business start-ups have become less risky.
C) have to piece their capital together from several sources.
D) are spending nearly 75% of their time raising capital.
David started his business a couple of years ago. After several marketing promotions,
he decided to establish direct contact between his sales people and the customers. His
marketing communication is:
A) advertising.
B) public relations.
C) sales person sponsorship.
D) personal selling.
Direct mail ads have a number of advantages to them, such as:
A) low relative costs.
B) long life spans.
C) flexibility.
D) multiple exposure.
Tactics that can help an entrepreneur stimulate positive publicity for the firm are:
A) writing news releases and faxing them to the media.
B) sponsoring a community project.
C) promoting a cause.
D) All of the above
The statement of cash flow:
A) compares costs and expenses against a firm’s sales.
B) is built on the basic accounting equation: Assets = Liabilities + Capital.
C) shows what assets the business owns and what claims creditors and owners have
against those assets.
D) shows changes in working capital by listing sources and uses of funds.
The capitalized earnings approach determines the value of a business by capitalizing its
expected profits using:
A) the rate of return reflecting the risk level.
B) the prime interest rate.
C) the normal rate of return.
D) the prevailing rate of inflation.