Actions that are legal, however, may not be ethical.
Creditors often look for a times-interest-earned ratio of at least 4:1 to 6:1 before
pronouncing a company a good credit risk.
The Web is one of the most efficient ways of reaching both new and existing customers.
James decides to price his products in his small hardware store with “.95,” thinking that
customers will perceive a price of $9.95 is much lower than a price of $10. This is an
example of odd pricing.
A highly profitable company rarely experiences cash flow problems.
The majority of new business owners work fewer than 40 hours per week.
Examples of social media tools include ________.
A) mashups and podcasts
B) social networking and RSS feeds
C) wikis and blogs
D) All the above
Small businesses selling on credit find that ________.
A) it is relatively inexpensive and it is simple
B) it is expensive, requires a great deal of effort, and it is risky
C) it is essentially borrowing money from the customer
D) many can get by without selling on credit because their business customers do not
expect to use credit
Which of the following techniques would you notrecommend to a company desiring a
stronger recruiting strategy?
A) Look inside the company first – a promotion-from-within policy serves as an
incentive for existing workers to upgrade their skills.
B) Encourage employee referrals – reward employees for successful referrals.
C) Ensure that your recruitment efforts are known – whether in traditional media, the
Internet, or on college campuses.
D) Avoid hiring retired workers – they too often fail to have anything to offer.
Mini-Case 10-2: The Price is Right?
“It is obvious what people want; I can’t imagine why someone never thought of it
before. What good is it to be wealthy if I have to stay around the house all day waiting
for service representatives or doing paperwork?” Penny Matthews decided she would
take those responsibilities off the backs of the people of Tucson, Arizona. “My business
will arrange for all the services you need around the home (lawns mowed, plumbing,
carpets cleaned, televisions repaired, pools cleaned, everything). My clients will be free
to enjoy their lives without worrying about their houses. We will also arrange for parties
to be completely catered. In addition, if you wish, we will pay all your bills and
reconcile your bank statement. A life without the irritations of domestic hassles; that’s
our service.”
Penny was explaining the idea to her close friend and banker, Wallace Trevillian. “You
have definitely thought about this for some time and put months of work into its
planning,” said Wallace. “What do you plan to charge for these services?”
“That’s a good question, Wallace. I haven’t thought about it.”
How would Penny Matthews go about determining how to price the services her
business plans to offer?
Which of the following documents must an entrepreneur file to create a limited liability
company?
A) Articles of Organization
B) Articles of Incorporation
C) Operating Agreement
D) A and C only
The process of systematically creating the optimum experience for customers every
time they interact with the company is ________.
A) total quality management (TQM)
B) time compression management (TCM)
C) customer experience management (CEM)
D) guerilla marketing
The ideal domain name should be ________.
A) short
B) memorable
C) easy to spell
D) All of the above
The advantages of job rotation include ________.
A) the ability to move from one job to others
B) a greater number and variety of tasks
C) additional flexibility for the company
D) All of the above
The marketing approach that is most effective today for a small business is ________.
A) mass marketing
B) market segmentation
C) niche marketing
D) individualized (one-to-one) marketing
Which of the following is not an enhancement to individual creativity?
A) Listening to other people.
B) Recognizing the creative power of mistakes.
C) Keeping a toy box in your office.
D) Working without breaks until the project is complete or the problem is solved.