Pure innovation is an overall strategic approach in which a firm patterns itself on other
firms, with the exception of one or two key areas.
Shake-out is a type of life cycle growth stage marked by a very rapid increase in sales
in a relatively short time.
Funds left over after deducting the cost of goods sold are referred to as the net profit.
The total product is the most general description of a business, and the one which
captures the smallest amount of what is special about a business.
A sole proprietorship is not considered as a separate legal entity from its owner.
In small businesses, providing credit to customers decreases the need to borrow cash.
Variable costs decrease if output increases.
In a professional corporation, the shareholders are responsible for debts of the
corporation.
Which of the following provides potential customers an education in a firm’s product or
service, including stories of customers’ whose problems were solved, an FAQ list, as
well as a page on the products or services, and a page on the business owner and his or
her firm?
A. Promotional novelties
B. Sales packets
C. Business cards
D. Brochures
Which of the following are the two major classification systems that code industries?
A. NAICS and SIC
B. SCALE and SCOPE
C. SWOT and VRIO
D. OLC and SWOT
_____ is a dispute resolution process held instead of court cases in which both sides
present their case to a legal professional.
A. Litigation
B. Arbitration
C. Mediation
D. Piercing the veil
Axion Inc. is a small business started by Robert. As the business grew, he decided to
implement new company policies that would ensure that his employees are not
encouraged to set up competition against Axion. Which of the following techniques
should he adopt to achieve this?
A. Lay off employees who seem most likely to go into competition with Axion
B. Groom other candidates to replace the employees currently working at Axion
C. Cross train the employees to neutralize job specialization
D. Negotiate contracts with key employees that limit their freedom to go into
competition
Which of the following approaches yields better results in richer, dynamic, uncertain
environments or industries?
A. Promotion focus
B. External focus
C. Effectuation focus
D. Prevention focus
Which of the following statements is true of a business plan presentation?
A. Typically, a business plan presentation does not follow the content of a business
plan.
B. The content of a business plan presentation remains the same for different audiences.
C. Handouts are mailed or distributed when the business plan changes frequently.
D. Listeners check presentations for the content and not for the professionalism and
passion of the presenter.
Accurate and timely _____ are essential for making decisions concerning the extension
of credit. They also help produce accurate billing of customers, and thus help to
maintain good customer relations.
A. payroll records
B. leasehold records
C. accounts payable records
D. accounts receivable records
Brendon wants to sue Fitness Ace, a leading provider of fitness equipments, for
negligence. He approaches Arthur Bailey Group, a law firm, which has good experience
in handling product liability claims for victims of exercise equipment failure. Which of
the following would be true if the attorney charges Brendon in the form of contingency
fees?
A. The attorney would charge Brendon on an hourly basis.
B. The attorney would charge separately for consultation and paperwork.
C. The attorney would take a percentage of Brendon’s recovery as his or her fee.
D. The attorney would take monthly fee and additional fees if circumstances change.
People should typically avoid businesses that advocate:
A. utilitarianism in ethical decision making.
B. caveat emptor as the business principle.
C. bootstrapping as a means to save costs of doing business.
D. green audit and green retailing.
Which of the following is true regarding a small-claims court?
A. These courts will only accept cases where the stakes are as large as $50,000 or
above.
B. Most of these courts are designed so that ordinary citizens can bring their cases in.
C. This legal option is only available to entrepreneurs who can afford an attorney.
D. These courts are the only recourse for small business owners for litigation.
The idea trigger of the separate products, services, or whole businesses that
entrepreneurs can put together to create another distinct business represents which cue
of the SCAMPER tool?
A. Substitute
B. Magnify
C. Adapt
D. Combine
Which of the following is most likely to be a major business plan concern for bankers?
A. Compliance with regulations and laws
B. Intellectual property protection
C. Asset or collateral base
D. Monitoring compliance
_____ measure a management’s effectiveness in using the invested capital of the
business to provide profits.
A. Profitability ratios
B. Gross margin ratios
C. Return on investments
D. Return on equity
Describe the challenges faced by women and minorities in small businesses.
What are the different ways of generating publicity?
Discuss some of the feasible ways of monitoring the environment of small businesses.
Differentiate between buyouts and buy-ins.
Briefly explain the steps involved in performing due diligence in purchasing an existing
business.
Briefly describe any two ways by which business owners convey their promotional
message.