A typical venture capital firm seeks investments in the $20,000 to $50,000 range and
annual returns of 35-50 percent over three to five years.
Immoral managers purposely violate law and ethical standards.
A company’s mission statement defines what it stands for, why it exists, and its reason
for being.
Increased traffic flow can be beneficial to similar businesses located in close proximity
to one another (e.g., auto dealers, clothing retailers, and antique shops).
A business plan should contain certain basic elements, but it should also be tailored to
the individual company by emphasizing its particular personality and reflecting the
entrepreneur’s excitement for the business opportunity.
A franchiser should have sufficient managerial and financial resources to devote to
globalization.
The most important part of any e-commerce effort is technology.
Bootstrapping is the process of finding creative ways to exploit opportunities to launch
and grow businesses with the limited resources available for most start-up ventures.
The three “tests” associated with a business plan are ________.
A) reality, competitive, and value
B) competitive, profitability, and value
C) value, reality, and profitability
D) reality, value and litmus
Cash requirements can be determined by dividing cash expenses by ________.
A) liabilities
B) accounts receivables
C) total assets
D) the average inventory turnover
Which of the following is true regarding the corporate form of ownership?
A) Generally has the greatest ability to accumulate capital.
B) Most complex form of ownership.
C) Separate legal entity in the eyes of the law.
D) All of the above
Which of the following is not one of the objectives a bootstrap marketing plan should
accomplish?
A) Determine customer needs and wants through market research.
B) Determine how the company will be able to serve all customers.
C) Analyze the firm’s competitive advantages and build a marketing strategy around
them.
D) Create a marketing mix that meets customer needs and wants.
When searching for capital to launch their companies, entrepreneurs should remember
several ‘secrets” to successful financing. Which of the following is not one of those
secrets?
A) Choosing the right sources of capital can be just as important as choosing the right
form of ownership or the right location.
B) The money is out there, but the key is knowing where to look.
C) Creativity counts when searching for financing.
D) Raising money should not take very long therefore, if it does not come quickly, it
probably will not come at all.
A compensation system in which employees’ pay depends on how well they perform
their jobs is known as ________.
A) a profit-sharing plan
B) open book management
C) a pay-for-performance compensation system
D) a commission compensation plan
The ________ while downloading a Web page is one of the most important
determinants of its sales effectiveness.
A) visual stimuli
B) “flash and show”
C) memory required
D) time required
Generation Y and Generation Z are examples of ________ changes.
A) economic
B) demographic
C) technological
D) sociocultural
To minimize the likelihood of invasion by hackers, e-commerce companies rely on
several tools, including ________.
A) virus detection software
B) intrusion detection software
C) firewalls
D) All of the above
Marco is opening a new computer repair shop. He is owner and sole employee. He has
paid the appropriate fees and licensing costs and begun his business. This is an example
of a(n) ________.
A) S corporation
B) partnership
C) corporation
D) sole proprietorship
________ is the most important, yet least productive, asset that a small business owns.
A) Profit
B) Cash
C) Inventory
D) Accounts receivable
During the incubation phase of the creative process, the entrepreneur might do all of the
following except which of the following to let ideas “marinate” in his mind?
A) Do something totally unrelated for a while.
B) Relax and play regularly.
C) Work on the problem or opportunity in a different environment.
D) Don’t allow one’s self to daydream.
An individualized (one-to-one) marketing campaign requires business owners to
________.
A) collect information on their customers, linking their identities to their transactions
B) calculate the long-term value of their customers so they know which ones are most
desirable and most profitable
C) practice “just-in-time marketing” by knowing what their customers’ buying cycle is
and time their marketing efforts to coincide with it
D) All of the above
The intentional and targeted promotion of a Web site is ________.
A) critical to online success
B) optional because once you are on the Web, you will get traffic and sales
C) a luxury that most small businesses cannot afford
D) contrary to current Web trends
Which of the following is not a characteristic of a typical angel investor?
A) Investing money locally.
B) Purchasing majority ownership in the company.
C) Investing in the startup phase of the company.
D) Willing to wait seven years or more to cash out an investment.
Which of the following is true about the preparation of a business plan?
A) The format should follow a “cookie-cutter” approach to ensure uniformity and
consistency with others and to promote ease of understanding.
B) The elements of the plan may be standard, but the content should reflect the unique
aspects of the business and the excitement of the entrepreneur.
C) The plan should cover every standard element in great detail and be at least 100
pages long to prove to potential lenders and investors that the entrepreneur has studied
the business and the market opportunity.
D) The entrepreneur should avoid seeking the advice of professionals, such as
accountants, business professors, and attorneys.
E-commerce requires focusing on technology first and then determining how the
technology fits the business idea.
Which of the following inventory management techniques would help a business owner
make the best use of his company’s cash?
A) Avoid overbuying inventory.
B) Schedule inventory deliveries at the latest possible date.
C) Purchase goods from the fastest suppliers who can meet quality standards to keep
inventory levels low.
D) All of the above
________ ratios tell whether or not the small company will be able to meet its
short-term obligations.
A) Leverage
B) Profitability
C) Liquidity
D) Operating
Which of the following is/are true regarding business plans?
A) Provide a pathway to success.
B) Allow entrepreneurs to replace faulty assumptions with facts before making the
decision to go into business.
C) Create a benchmark against which entrepreneurs can measure actual company
performance.
D) All of the above
Construct a break-even chart for Birmingham’s.
To be effective, a small business leader must perform three vital tasks. List and briefly
explain these three tasks.
The following lists the ten deadly mistakes of entrepreneurship:
1. Management mistakes
2. Lack of experience
3. Poor financial control
4. Weak marketing efforts
5. Failure to develop a strategic plan
6. Uncontrolled growth
7. Poor location
8. Improper inventory control
9. Incorrect pricing
10. Inability to make the entrepreneurial transition
Select one of these deadly mistakes, describe what it may look like for the entrepreneur,
and give an example.
Your friend Susan is considering purchasing an existing business. How would you
explain to her what due diligence is, why it is important, and the critical areas of it?
Discuss the various sources of information available to the small business owner for
deciding in which region of the country to locate her/his business.
What would be the most effective way to recruit personnel for this type of business?
Mini-Case 9-1: Marketing a Nonprofit – Virtual Opportunities
New Wave Chance Youth Club is a local youth organization supported solely by the
donations of individuals and the local church community. Its co-founders, Valerie and
Kristen, are considering launching a Web site to promote upcoming events and raise
money for a new gym. Their good friend Paul has volunteered to develop a Web site,
which they feel will help promote their efforts.
How might a Web site benefit the youth club?