Kiosks are an inexpensive way of setting up a small business.
Convenience goods stores are interested in a high flow of customer traffic.
Government regulations encourage small firms to hire more employees.
The objective of the operating budget is to plan and control revenue and expenses to
obtain desired profits.
For small businesses, export start-up costs are always very high.
Seasonal stores may remain open year-round or may only open seasonally.
Advertising tries to convince customers that the products are superior to those of
competitors.
The board of directors conducts the day-to-day operations of the business.
The legal objectives are included in the operational planning process.
An advantage of government regulations for small businesses is that they require
minimal paperwork.
In formal failures, the owner who cannot succeed voluntarily terminates the business.
Information is an important resource for small businesses.
Telecommuters in the United States may suffer from the disadvantage of a lack of DSL
service.
Estate planning involves preparing for the orderly transfer of the owner’s equity in the
business when death occurs.
Which of the following is a good source of information to prospective business owners?
a) Business Committee for the Arts
b) State Economic Development Agencies
c) Federal Trade Commission
d) Business Council for International Understanding
An exhibition of products or services by companies in the same industry is known as a
_____.
a) trade show
b) conference
c) publicity release
d) trade mission
A(n) _____ is a document that contains instructions about what should be done with the
family-owned business if the owner suddenly dies or becomes incapacitated.
a) bequest
b) will
c) instrument
d) claim
Which of the following is an example of a shopping good?
a) Cigarette
b) Detergent
c) Milk
d) Automobile
Obtaining all items, including goods and services, in the proper form and at the proper
place, time, and cost, is the main objective of:
a) promoting.
b) marketing.
c) purchasing.
d) scheduling.
Which of the following can owners of small businesses use to cope with variations in
demand?
a) Hire permanent workers during peak periods.
b) Do not subcontract production.
c) Avoid carryingcomplementary products, such as winter and summer items.
d) Use inventory buildups to smooth out operations.
Mark had opened a caf© in his neighborhood. Soon his caf© became very popular and
his revenues started increasing. Steve, the owner of a popular restaurant saw Mark’s
success and asked him to join the restaurant. The financial incentive Steve offered Mark
was more than what he earned at his caf©, and he would not have to face the daily
hassles of managing everything on his own. He decided to shut down his caf© and join
the restaurant. This is an example of:
a) foreclosure.
b) formal failure.
c) discontinuance.
d) bankruptcy.
Which of the following is a benefit of buying a franchise?
a) The franchisee can identify his or her market niche.
b) The franchisee can select his or her own sales activities.
c) The franchiser brings proven methods of operation to aid the franchisee.
d) The franchiser gives complete independence to run the franchise.
Which of the following is a characteristic of shopping centers in the United States?
a) They attract business-oriented activities, as government and head offices of large
firms.
b) They target customers for specific seasons or events.
c) They are designed to draw traffic according to the planned nature of the stores to be
included in them.
d) They stock only low-priced items that are purchased often and lend themselves to
self-service.
A _____ is a statement of a firm’s assets, liabilities, and owners’ equity at a given time.
a) balance sheet
b) benchmark
c) profit goal
d) sales forecast
What are the alternatives that a small business owner can consider in order to increase
profits?
What are the different ways that can be used in training nonmanagerial employees?
Describe community relations as a form of social responsibility practiced by small
firms.
What is prospecting?
What are the methods that a potential entrepreneur should follow to study the market?
What are the two important considerations involved in creating the mission and
defining objectives for a small business? Explain how each gives a competitive edge to
a small business.