Professional venture capital firms provide more investment capital for small businesses
than angel capitalists.
Venture capitalists insist on looking at the business plan rather than the executive
summary to help them make investment decisions.
Ordinary bankruptcy occurs when a debtor files an application with a court claiming
that debts exceed assets and asks to be declared bankrupt.
When a system of budgets is used for planning and control purposes, it becomes
budgetary control.
The executive summary outlines the entire business plan, its major objectives, how
these objectives will be accomplished, and the expected results.
Controlling is the process of setting standards and measuring performance against
standards.
Selling on credit coupled with a careful selection of customers can help small business
owners maintain a higher level of sales.
One’s _____ is one’s own belief system that tells one what to do if or when the laws
and/or any pertinent codes of values are silent.
a) reputation
b) association
c) business ethic
d) personal ethic
What is the significance of variable work schedule?
a) It permits employees to work at times other than the standard five 8-hour days.
b) It allows employees to schedule their own hours, around a core time.
c) It grants workers greater responsibility and authority in their jobs.
d) It takes pride in getting the workers do a variety of duties within a specific time span.
_____ is a voluntary decision to terminate a business.
a) Foreclosure
b) Formal failure
c) Discontinuance
d) Bankruptcy
_____ is setting the times and sequences needed to perform specialized activities.
a) Scheduling
b) Controlling
c) Purchasing
d) Procuring
Which of the following refers to a profit planning step in the context of small
businesses?
a) Listing strategies for rapid growth
b) Comparing the estimated profit with the profit goal
c) Listing strategies for diversification
d) Analyzing the diversification strategies of competitors
What is a marketing mix?
a) It is the proper blending of the basic elements of product, price, promotion, and place
into an integrated marketing program.
b) It is the process of identifying and evaluating the various layers of a market.
c) It is the part of the total market toward which promotional efforts are concentrated.
d) It is a marketing process for acquiring customers that involves obtaining
individual-level consumer information.
How is cash balance calculated at the end of a month?
a) By adding balance at beginning of month and total cash receipts and subtracting total
cash payments
b) By adding balance at beginning of month and total cash payments and subtracting
total cash receipts
c) By adding total cash receipts and total cash payments and subtracting balance at
beginning of month
d) By adding balance at beginning of month, total cash receipts, and total cash
payments
John opened All-for-Shop, a small retail outlet in his neighborhood. He could not
sustain it for more than a year because of huge losses and chose to shut it down.
Fortunately, he did not have any creditors. Which of the following does the situation
describe?
a) Formal failure
b) Foreclosure
c) Chapter 7 bankruptcy
d) Personal failure
Which of the following is true about the final stage of the growth pattern that small
businesses tend to follow?
a) Owners manage the business and do all the work
b) Owners still manage their companies but hire employees to help with routine and/or
management activities
c) Owners hire managers to run the firms
d) Owners outsource much of the supervisory work
The SWOT analysis is used to:
a) select human resources.
b) restrict over-usage of physical capital.
c) formulate the mission of a company.
d) scan the business environment.
Which of the following is true of business format franchising?
a) The franchiser exercises very little control over the franchisee’s business operations.
b) Gasoline service stations and truck dealerships use this form of franchising.
c) The franchiser provides assistance to the franchisee to train franchise personnel.
d) Franchisees concentrate on handling the franchiser’s product line and identify their
business with that firm.
Which of the following should an interviewer do to improve the diagnostic interview
process?
a) Ask the obvious questions.
b) Focus as much attention as possible on a candidate’s self-evaluation.
c) Be very clear about job performance expectations.
d) Rely mostly on past credentials.
There is now a greater effort in small firms to hire qualified persons without regard to
race, sex, religion, color, creed, age, or disabilities. This illustrates enlightened _____.
a) employee relations
b) consumerism
c) personal ethics
d) individualism
The website of the Federal SBA has a self-help program called the _____ to help
prospective entrepreneurs focus on some of the factors they need to consider.
a) Market Research Questionnaire
b) Directory of Entrepreneurship
c) Small Business Startup Kit
d) Test Marketing Tool
_____ is a source of financing that reaps tax advantages from selling shares to workers.
a) Employee stock ownership plan
b) Small business investment company
c) Specialized small business investment
d) Small company offering registration
Which of the following is a drawback of buying a franchise?
a) The franchiser does not provide any guidance to the franchisee.
b) Franchises are available in a very limited range of endeavors.
c) Franchisers have to identify their market niche and conduct their own sales activities.
d) The initial investment is quite high for the franchisee.
Which of the following is true of market research in the context of small businesses?
a) Formal research programs are a cost-effective way to obtain guidance.
b) The district offices of the U.S. Department of Commerce have good libraries.
c) The Business Committee for the Arts has publications on organizing small
businesses.
d) Market research consists of granting a franchisee the right to sell a product.
A way to deal with incompetent family members in a family-owned business is to:
a) allow them to take special privileges.
b) tolerate them when they avoid unpleasant tasks.
c) place them in responsible positions to encourage them to work.
d) assign jobs to them that allow minimal contact with other employees.