Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
The greatest opportunities for e-commerce lie in the retail sector.
Most stores find it most practical to use a flexible markup, which assigns various
markup percentages to different types of products.
Choosing a location in which many other businesses have failed can create a negative
image, even for a "new" business.
Ratio analysis provides an owner with a 'snapshot" of the company's financial picture at
a single instant; therefore, she/he should track these ratios over time, looking for trends
that otherwise might go undetected.
Angels are not a good source of financing for entrepreneurs seeking relatively small
amounts of money, as they typically do not make investments of less than $1 million.
One reason for McDonald's success in foreign markets is its decision to stick to exactly
the same menu in every country that it offers in the United States.
Venture capital companies invest only in companies in the startup phase.
The right brain processes information in a step-by-step fashion.
Mind-mapping is a graphical technique that encourages thinking on both sides of the
brain, visually displays the various relationships among ideas, and improves the ability
to view a problem from many sides.
Almost 75 percent of Internet users live within the United States.
When a small business encounters a sales slowdown, the first thing the owner should do
is cut marketing and advertising expenditures to conserve cash.
Expanding a business usually requires no significant changes in structure or business
practices.
Which of the following is/are not true regarding pricing for service firms?
A) A service firm must establish a price based on the materials used to provide the
service, the labor employed, an allowance for overhead, and a profit.
B) Most service firms base their prices on an hourly rate (usually actual hours), but
sometimes standard hours are used.
C) For most service firms, labor and profit comprise the largest portion of the cost of
the service.
D) None of the above
Nance Technologies, Inc., has agreed to sell some of its computers to a company in
Bascovina, a country whose currency is worthless outside its own borders. As part of
the agreement, Nance will sell the foreign customer its computers in exchange for a
specified number of tons of coffee, a major export of Bascovina. Nance has already
arranged to sell the coffee to a major processor for a set price in U.S. dollars. Nance has
engaged in ________.
A) bartering
B) foreign licensing
C) exporting
D) countertrading
A technique offering customers discounts if they purchase in quantity is referred to as
________.
A) optional product pricing
B) bundling
C) multiple-unit pricing
D) customized pricing
________ vertical thinking is narrowly focused and systematic, proceeding in a highly
logical fashion from one point to the next.
A) Left-brained
B) Right-brained
C) Unconventional
D) Intuitive
The index of retail saturation ________.
A) is retail expenditures times retail facilities divided by the number of customers
B) is the ratio of a trading area's sales potential to its sales capacity
C) evaluates both the number of customers and the intensity of competition in a trading
area
D) B and C above
Foreign licensing is ________.
A) required when a business buys and sells products in many countries, either in its
own name or as an agent for its buyer-seller clients
B) a government-owned or business-owned facility set up in a foreign country to buy
products that are made there
C) the use by one firm (the carrier) of its overseas distribution network to sell
noncompetitive products made by other firms (riders)
D) an agreement in which a licenser gives a licensee in another country the right to use
that licenser's patent, trademark, copyright, technology, and products in return for a
percentage of the licensee's sales or profits
________ is/are the narrowest level of ethical standards.
A) The law
B) Organizational policies and procedures
C) Social responsibility
D) The moral stance
Gaither Mack is preparing projected financial statements to include in the business plan
he is preparing for the launch of a specialty retail store. Using published financial
statistics, Mack finds that the typical net profit margin for a store like his is 7.3 percent.
If Mack's target income for his first year of operation is $32,000, what level of sales
must he achieve to reach it?
A) $233,600
B) $438,356
C) $2,966,400
D) Cannot be determined from the information provided.
________ frequently convey the idea of quality, prestige, and uniqueness to customers.
A) Effective packaging
B) Low prices
C) High prices
D) High profile promotions
________, the exchange of goods and services for other goods and services, is one way
of trading with countries that lack convertible currency.
A) Countertrading
B) Bartering
C) Foreign licensing
D) Exporting
________ value is the price customers would be willing to pay if they perfectly
understood the benefits offered, while ________ value is what determines the price they
are willing to pay.
A) Objective; perceived
B) Perceived; objective
C) Objective; quantitative
D) Perceived; real
Which of the following businesses would be most likely to offer installment credit to its
customers?
A) A retailer of major appliances
B) A convenience store
C) A printer
D) A clothing retailer
Only ________ percent of small companies offer employee-assistance programs
(EAPs).
A) 7
B) 18
C) 21
D) 37
Because of the risk/return tradeoff, small businesses that borrow money repay it with
interest at the ________.
A) prime interest rate
B) prime interest rate minus a few percentage points
C) prime interest rate plus a few percentage points
D) lender's cost of capital
What factors should an entrepreneur consider when choosing a form of ownership?
Discuss the role that the following groups are playing in leading the ongoing surge in
entrepreneurial activity:
-women
-minorities
-immigrants
-part-time entrepreneurs
-home-based entrepreneurs
-family businesses
-copreneurs
-corporate castoffs
-corporate dropouts
Explain three trends that are currently shaping the franchising industry.
List at least ten of the seventeen behaviors that effective leaders exhibit.
Explain how a typical SBA loan guarantee works. What interest rates do these loans
normally carry?
Mini-Case 4-1: The Need For A Plan
Andrew Sycamore has spent more than ten years in the human resources department of
a large management consulting company. During his tenure, he was often put in charge
of training new recruits, where he arranged for various company managers to address
the recruits and teach them skills important in the workplace. What Andy had noticed
was the one skill that was often the hardest to teach involved problem identification and
problem solving. Even the best recruits from well-known universities found it hard to
assess a situation to determine what the problem was and how to develop solutions for
it. In his heart, Andy was an entrepreneur and he was dying to quit his corporate job and
be his own boss. He was convinced there was a business opportunity in developing an
interactive, online problem identification and problem solving tool.
Andy's idea, which he titled "Nested Learning," involved software that included a
screen where a scenario was presented to the user and the user was asked to first
identify the problem and then develop solutions for it. What was unique about "Nested
Learning" was that the initial scenario was specifically written so as not to be sufficient
enough to generate a problem. In other words, the user (or the trainee) had to ask the
software questions that would be responded with additional facts about the situation.
Andy argued that problem solvers don't get all the facts handed to them at the very
beginning and that they had to "tease" more out of the situation to identify the problem.
Andy's idea was to develop a prototype of the software with a small number of generic
scenarios. He then hoped to meet with training managers of different companies and
'sell" them the idea of using "Nested Learning" as a better training tool. Once a client
agreed to use it, Andy would then work with the client to develop client-specific
scenarios.
What is the value proposition of "Nested Learning?" Is it compelling?
Mini-Case 11-2: Bowden Brake Service (Part B)
One day while you are in Bowden Brake Service getting your brakes repaired, Jim
storms into his office, slamming doors and shouting about the local financial
institutions. After a few minutes of building your courage, you approach Jim and ask
him what the problem is. He shouts, "It's the financial institutions in this town! Not one
of them will lend me the money I need to expand my business. They all said I needed to
take a closer look at my financial position before I consider expanding. One of them
said something about ratio analysis. I know a lot about cars and brakes, but what is ratio
analysis?"
You tell Jim you will perform a ratio analysis for the business if he gives you a free
brake job. Jim provides you with the following financial statements.
Refer to the income statement and balance sheet. Prepare a ratio analysis for Bowden
Brake Service. In addition, use the following industry statistics for firms like Jim's to
explain and interpret what these ratios mean.
Angels fill an important role in equity financing of a small business. Discuss their role,
their typical profile, and how to find an angel.
Explain the advantages and the disadvantages of a small business accepting credit cards
for customer purchases.
