Quality is so important in franchising that most franchisers retain the right to terminate
the franchise contract and to repurchase the outlet if a franchisee fails to maintain
quality standards.
Creating a meaningful presence on the Web requires an ongoing investment of
resourcestime, money, energy, and talent.
Creativity is the ability to develop new ideas and to discover new ways of looking at
problems and opportunities.
The business plan presentation should be slow, methodical, and detailed to show the
depth of understanding and preparation the entrepreneur has gone to.
A letter of credit reduces the financial risk for the exporter by substituting a bank’s
creditworthiness for that of the purchaser.
The danger inventory poses to a small business is the amount of cash it ties up.
The skimming pricing strategy is used when there is a lot of competition in the market.
TCM focuses solely on reducing administrative time in product development.
When a lender becomes a certified lender, it makes the final lending decision itself,
subject to SBA review.
It is legal and appropriate for the entrepreneur to ask a job candidate if they have
children or have been arrested.
The job specification outlines the duties and responsibilities of a job and its working
conditions.
Price is the monetary value of a good or service in the marketplace.
Creativity is always “caught,” it is never “taught.”
If a franchisor encourages you to sign without reading the agreement, or discourages
you from “spending the money on an attorney,” this is a warning sign that the franchiser
might be dishonest.
Selling terms are as important to the small business as the actual price of the goods and
services being purchased.
One key to building a successful differentiation strategy is to be better than competitors
at some characteristic that customers value.
A free trade area is a region in which there are no tariffs or taxes on imports and
exports.
The ability to innovate is one of the greatest weaknesses of the entrepreneur.
An interstitial ad appears for a short time before a user-requested page appears.
Liquidation bankruptcies are handled under Chapter 7 of the Bankruptcy Reform Act of
1978.
Showrooming poses a threat to retailers.
Playing together is so important to the success of a family business that family
members should be forced to play together even when they don’t want to.
Social responsibility is the awareness by a company’s managers of the social,
environmental, political, human, and financial consequences their actions produce.
Changes in office design have a direct impact on workers’ job performance, job
satisfaction, and ease of communication.
In most cases, startup costs for franchises often do not include any additional fees.
The purchasing plan should identify a company’s quality requirements, its cost targets,
and the criteria for determining the supplier.
A low inventory turnover ratio demonstrates that the firm’s inventory is liquid and its
pricing policies are accurate.
If a firm lacks a unique business image, it must match its competitor’s prices or risk
losing customers.
Small business owners using the ABC system of inventory control need not worry about
conducting a physical inventory count.
The most powerful unique selling proposition is tied to the tangible practical features of
the product.
Site selection begins with considering what city in which to locate and then broadening
the search to consider the region and state.
A balanced scorecard is a set of common measures for all companies.
The best way to handle sexual harassment is to educate the employees and thereby
prevent sexual harassment.
Under the UCC, delivery of goods does not necessarily mean physical delivery, but
simply making the goods available to the buyer.
The licensing potential for intangibles, such as technology, trademarks, etc., is often
greater than the licensing opportunities for products.
A strategy is a road map of action for fulfilling a firm’s mission, goals and objectives.
In a bankruptcy proceeding, all assets are subject to court attachment.
Convergent thinking is the ability to see the differences among various data and events.
The best way to minimize carrying costs is to order as many units as possible in each
order.
Under the capitalized earnings approach to business valuation, firms with lower risk
factors are more valuable than those with higher risk factors.
The following is true regarding entrepreneurial education:
A) entrepreneurship has become an extremely popular course.
B) universities are not able to meet the demand for courses in entrepreneurship.
C) more courses are being offered in entrepreneurship.
D) All of the above
The ideal domain name should be:
A) short & memorable.
B) indicative of a company’s business or business name.
C) easy to spell.
D) All of the above
Which of the following is a drawback of the market approach of valuation?
A) It does not consider current earnings.
B) It may under represent earnings.
C) Its reliability depends on the forecasts of future earnings.
D) It over emphasizes the value of goodwill.
Kyoto is writing a description of her new venture’s product line and how it compares to
her competitors’ product lines. She is writing the ________ portion of her business plan.
A) description of her firm’s product
B) marketing strategy
C) competitive analysis
D) business strategy
The marketing plan should include certain key objectives, such as:
A) determining product costs through market research.
B) pinpointing the specific target markets a small business will serve.
C) determining what costing strategies to use.
D) discovering what the company’s ETDB index is.
The single most important ingredient in making a successful public offering is:
A) choosing a capable underwriter.
B) negotiating a favorable letter of intent.
C) preparing a suitable registration statement.
D) filing Regulation D with the SEC.
A ________ pricing strategy often is used when a company introduces a new product
into a market with little or no competition.
A) price war
B) competitive
C) skimming
D) price floor
Successful entrepreneurs recognize that their most valuable resource is their ________.
A) time
B) energy
C) vision
D) age
Price ________ usually begin(s) when one competitor believes that they can achieve a
higher volume through lower price, or they believe that they can exert enough pressure
on other competitors’ profits to drive them out of business.
A) discounts
B) markdowns
C) wars
D) penetration
Free trial offers, free delivery, lengthy warranties, and money back guarantees are
examples of:
A) promotion.
B) product differentiation.
C) non-price competition.
D) customer discounts.
A small business that buys a fire insurance policy on the equipment in its corrugated
box factory is relying on a risk ________ strategy.
A) avoidance
B) reduction
C) anticipation
D) transfer
The Robinson-Patman Act focuses on:
A) price discrimination.
B) product warranty.
C) product liability.
D) unsafe products.
The SBA’s ________ program offers short-term capital to growing companies seeking
to finance seasonal buildups in inventory or accounts receivable.
A) The Direct Loan
B) CDC
C) Immediate Participation Loan
D) CAPLine
A company that installs a sprinkler system in its corrugated box factory is using a risk
________ strategy.
A) avoidance
B) reduction
C) anticipation
D) transfer
When the franchisee has the right to establish a semi-independent organization in a
particular territory to recruit, sell, and support other franchises, it is called a ________
franchise.
A) multi-unit
B) piggyback
C) conversion
D) master
Under the Truth-In-Lending Act, the owner of a stolen credit card who notifies the
credit card company of the theft before any unauthorized use of the card is liable for:
A) none of the unauthorized charges.
B) only $50 of any unauthorized charges.
C) a total of $100.
D) all of the charges. The owner has unlimited liability.
Customer surveys and questionnaires should:
A) be short.
B) not give biased results.
C) use simple ranking systems.
D) All of the above
The ________ becomes the document that summarizes the analysis that has been done
to justify a new business.
A) business plan
B) cash budget
C) pro forma
D) financial statement
What types of financing requirement dramatically reduces the number of potential
buyers?
A) 80% financing, 20 % cash
B) 100% cash only
C) 100% financing by the seller
D) All of the above
Most common mistakes that entrepreneurs make once they finally decide to go online
are:
A) they believe they have to have a “perfect” site before they can launch it.
B) few businesses get their sites “right” the first time.
C) in fact, the most successful e-commerce sites are constantly changing, removing
what does not work and adding new features to see what does.
D) All of the above
When it comes to monitoring electronic communication, especially e-mail:
A) 80% of all organizations read employees’ e-mail.
B) supervisors may not read employees’ e-mail without cause.
C) only 15% of all companies have policies governing the use of e-mail.
D) most employees don’t know employers may read their e-mail without permission.
All partnerships must have:
A) at least three limited partners.
B) no dormant partners.
C) at least one general partner.
D) at least one silent or money partner.
In a limited partnership, the limited partners are treated like ________ by the law.
A) investors
B) general partners
C) sole proprietors
D) honorary partners
JIT systems need two significant human elements to be successful: mutual trust and
teamwork, and:
A) an individual incentive/rewards program.
B) staff training.
C) a benefits program.
D) empowerment.
Small companies with limited financial resources can often use ________ as a way to
differentiate themselves from larger competitors.
A) innovation
B) lower prices with higher quality
C) high price and high quality
D) customer service
________ is any unwelcome sexual advance, request for sexual favors, and other verbal
or physical sexual conduct made explicitly or implicitly as a condition of employment.
A) Hostile harassment
B) Quid pro quo harassment
C) Non-employee sexual harassment
D) Sexual harassment
Many courses have team projects. A team can be powerfully effective in terms of
performance when:
A) their mission and performance targets are realistic and known to the team members.
B) the team has the needed skill.
C) the nature of the work is compatible with the use of teams.
D) All of the above
The first step in creating the pro forma income statement is to:
A) create a sales forecast.
B) determine a reasonable salary and return on investment in the company.
C) find published figures on the specific type of business in order to forecast sales.
D) figure out operating costs and make a realistic sales estimate.
The franchiser has the right to cancel a contract if a franchisee:
A) declares a bankruptcy.
B) fails to make required payments on time.
C) fails to maintain quality standards.
D) All of the above
________ is the primary market for U.S. franchisers.
A) South America
B) Europe
C) Mexico
D) The Caribbean
Sites that ________ may never have the chance to sell because customers will click to
another site.
A) move quickly
B) download slowly
C) don’t have e-mail
D) don’t have toll-free numbers
The Clayton Act prohibits:
A) fair trade agreements.
B) sales contracts and warranties.
C) any corporation purchasing the stock of another corporation.
D) interlocking directorates.
What is a limited liability company (LLC) and why would an entrepreneur choose it as
a form of ownership?
What are the three tests any business plan should be put to? Name and explain the
purpose of each.
What are the barriers to creativity?
What is assent in a contract and what invalidates it?
What can an entrepreneur do to avoid the failure of his/her company? Discuss at least
six actions they can take.
Discuss how a company can achieve stellar customer service and satisfaction.
Explain the use of employment tests and reference checking in the hiring process.
Describe the three levels of ethical standards.
Inventory management involves seven other interrelated steps. Identify each and
explain their importance to inventory management.
What is company culture and how does it influence the staffing and leading of a
growing company?
Review the business plan process, outlining the important elements of the presentation.
Name and discuss the four methods of establishing an advertising budget.
Explain the guidelines for building a successful Web strategy for a small e-company.
What key questions need to be answered in the process of due diligence?
What can the small business owner do to develop an effective drug prevention
program?
Create a credit and collection policy for a privately owned small bookstore/caf which
has a number of customers who buy pastries on account and numerous customers with
standing book orders that they pay on once a month.
How can a small business use the Web to go global?
Explain the impact of competition on pricing strategy and what an entrepreneur should
do about competitors’ prices.
Entrepreneurial activity is culturally diverse. Discuss the role of women, minorities, and
immigrant entrepreneurs in this activity, profiling their characteristics, their impact, and
the specific barriers they need to overcome in their small business start-ups.