Most SBIC loans are between $10,000 and $50,000 and the loan term is longer than
most banks allow.
One of the most important advertising decisions the small business manager must make
is selecting the specific media to employ in disseminating the manager’s personal
message.
Typically, factoring is less expensive than bank and commercial finance company loans.
The most common source of equity funds used to start a small business is an SBA loan.
The single most important ingredient in making a successful IPO is the road show.
Venture capital companies are typically not-for-profit organizations.
Often, the presence or absence of a quality business plan is a determining factor in a
lender or investor’s decision to put money into a business venture.
Some companies manage their accounts receivable and cash by using sweep accounts.
These are accounts where all funds above a certain minimum are automatically moved
into an interest-bearing account.
Price lining occurs when a small company raises the price of all of its goods by the
same percentage to cover operating expenses.
It is common to experience a lower quality of life during a business start-up than after
the business is established.
The total circulation of magazines in the U.S. is 33 million.
A buyer gets an insurable interest in goods once they are identified as the goods
pertaining to the contract.
The second objective of a job analysis is to create a job specification, a written
statement of the qualifications and characteristics needed for a job stated in such terms
as education, skills, and experience.
Foreign corporations invest in U.S. small businesses through strategic partnerships in
order to gain access to new technology, new products, and U.S. markets.
A significant growth area in franchising is providing time-saving services to baby
boomers.
Under the Code, a new consideration is required if an existing contract is modified.
The company history should explain why the company was formed, its past successes,
and its image in the marketplace.
A target market is the group of customers at whom the company aims its products and
services.
The greatest criminal threat to small business is from professional crooks in the form of
shoplifters, fraudulent insurance sales, and computer scams.
Small firms pursuing a cost leadership strategy have an advantage in reaching
customers whose primary purchase criterion is high quality.
The most effective way to market to the diversity of the American market is to choose a
single ethnic segment and market to it as if it were a homogeneous market.
When a company files for Chapter 11 bankruptcy, every creditor must approve its plan
for reorganization.
When the owner of a sole proprietorship dies, the business automatically terminates.
Entrepreneurs usually experience greater income stability running their own businesses
than they did in their corporate careers.
The manufacturer’s suggested price takes into account the small firm’s cost structure
and its competitive situation.
Convergent thinking is the ability to see the similarities and the connections among
various and often diverse data and events.
The objective-and-task method is the easiest and most used technique for establishing
an advertising budget.
The business acquisition process should begin with creating a list of criteria for
selecting the business to buy.
Most Export Management Companies (EMCs) are merchant intermediaries, working on
a buy-and-sell arrangement with domestic small companies.
Successful entrepreneurship requires both left- and right-brain thinking.
To be effective, any reward system used must be tailored to the tastes and interests of
the employees.
The average payable period tells the owner the average number of days it takes to pay
its accounts payable.
Employees are agents of their employers when performing job-related activities.
Entrepreneurs tend to create thorough, well thought out business plans prior to
implementing new businesses.
In radio advertising, 30-second ads are the most common.
The business plan has two essential functions; it helps the entrepreneur determine if the
business will succeed and it helps recruit management talent to run the new company.
In ________ of the management succession process, the successor is allowed to rotate
through a variety of jobs to broaden the base understanding of the business as well as to
have his/her skills evaluated.
A) Stage I
B) Stage II
C) Stage III
D) Stage IV
Launching and running a business can be an extremely rewarding experience, but it also
can:
A) be highly fun.
B) bring a steady paycheck.
C) be stressful.
D) not be rewarding at all.
The small business owner needs to know ________ in order to avoid stockouts and
calculate safety stock.
A) the EOQ
B) the lead time
C) the minimum level of stock allowable
D) the usage rate
The Uniform Partnership Act outlines a number of general obligations that partners
have such as the obligation to:
A) give other partners complete information about all business affairs.
B) share in the management and operation of the business.
C) be compensated for personal expenses incurred.
D) have access to the business’s books and records.
The key to choosing the “right” form of ownership is:
A) knowing the cost factor in time and money.
B) understanding how each form affects both business and personal circumstances.
C) having an experienced attorney and accountant to advise you in the choice.
D) the fact you cannot change the form of ownership once your company is established.
What are the two basic tenets of TQM?
A) employee involvement
B) teamwork
C) technology
D) Both A and B
In general, a(n) ________ inventory control system works best in firms in which daily
sales are relatively consistent.
A) perpetual
B) periodic
C) visual
D) ABC
Most franchise experts consider the most important factor in the success of a franchise
to be:
A) the simplicity of the idea.
B) location.
C) territorial protection.
D) financing.
Even in the short run, a small business must set the price of a product at least equal to
the ________ costs (per unit), or it must shut down.
A) fixed
B) variable
C) total
D) invariable
When estimating the firm’s end-of-month cash balance the owner should first:
A) determine the cash balance at the beginning of the month.
B) add up total cash receipts and subtract cash on hand.
C) review the accounts receivable.
D) make a daily list of cash disbursements.
In ________ pricing, a type of geographical pricing, a small firm charges customers
located in different territories different prices for the same products.
A) FOB factory
B) uniform delivered
C) zone
D) price lining
Which of the following is true about home-based businesses?
A) Over 2/3 of all home-based businesses are owned by minority males.
B) Home-based businesses tend to focus on blue-collar, lower skill industries.
C) The growth of technology has significantly slowed the growth of home-based
businesses.
D) The success rate is nearly 70 percent for at least three years.
________ is (are) the fuel that drive(s) creativity.
A) Rules
B) Imagination
C) Conformity
D) Rigidity
When the small business owner assesses her company’s strengths and weaknesses, she
is dealing with the ________ business environment.
A) macro
B) external
C) competitive
D) internal
A limited liability company differs from an S-corporation in:
A) that it is not subject to the same amount of restrictions.
B) its ability to attract and accumulate capital.
C) that ownership is not transferable through the sale of stock.
D) that it is limited to only one class of stock.
When conducting a job analysis, an employer needs to focus on questions about:
A) duties and tasks to be performed daily.
B) the skill, experience, and education necessary to perform the job.
C) when certain people will be needed by the company due to growth.
D) employee work habits.
________ is a group of workers from different functional areas of a company who work
together as a unit largely without supervision, making decisions and performing tasks
that once belonged only to managers.
A) Team-based management
B) Small partnership
C) Self-directed work team
D) Entrepreneur-plus-employee team
The final price set by the entrepreneur for the products depends on:
A) the desired image for the products.
B) the cost structure.
C) what customer will pay.
D) what competitors are charging.
________ pricing strategy introduces a new product at a low price to gain quick
acceptance and extensive distribution in a mass market.
A) Penetration
B) Skimming
C) Discount
D) Sliding-down-the-demand-curve
The small firm’s “master plan” is its:
A) objectives.
B) goals.
C) competitive edge.
D) strategy.
________ are the broad, long-range attributes the small business seeks to accomplish;
________ are the specific, measurable milestones the company wants to achieve.
A) Goals; objectives
B) Goals; strategies
C) Objectives; goals
D) Strategies; goals
Which form of ownership is the least costly to form?
A) Sole proprietorship
B) Corporation
C) Partnership
D) Limited liability corporation
Radio has a number of advantages for the small business owner, such as:
A) friendliness, in that radio ads are more active than print media ads.
B) easily measurable results and testable strategies.
C) long life span.
D) the ability to personalize the ads to the specific customers.
In most cases dealing with the issue of consideration, courts:
A) still consider a promise binding even if made without a consideration.
B) do not evaluate the adequacy of the consideration.
C) consider offers of “love and affection” to be valuable consideration.
D) weigh the value of the consideration in ruling on the validity of the contract.
Sunny Bright’s The Tanning Parlor is in the middle of its busy season. The hiring of
extra help, some unexpected repairs on equipment, etc., has led to a shortage of
operating capital. What type of financing would Sunny most likely use in this situation?
A) Line of credit
B) Floor planning
C) A discounted installment contract
D) An asset-based loan
Jackson is comparing this month’s operational costs, productivity, accident rate, etc., to
the goals his boss set with him at the beginning of the year. Jackson is at what point in
the feedback loop?
A) Comparing performance against standards
B) Deciding what to measure
C) Deciding how to measure performance
D) Conducting a performance appraisal
One of the most important factors in making long-term, constant improvements in a
company’s processes is ________ the philosophy and the tools of TQM.
A) teaching customers
B) teaching workers
C) teaching vendors
D) teaching manufacturers
________ law governs the rights and the obligations between people and the parties
they made promises to or agreements with.
A) Agency
B) Contract
C) Freedom of contract
D) UCC
A strategic plan should not:
A) be relatively small.
B) begin with extensive objective setting.
C) encourage participation by employees.
D) be informal and not structured.
Effective one-to-one marketing involves:
A) identifying your best customers.
B) treating each customer as an individual.
C) developing a marketing plan designed specifically to appeal to their customer needs,
tastes and preferences.
D) All of these
A ________ is a checking account that technically never has funds in it but is tied to
another master account like payroll.
A) cash account
B) money market account
C) zero balance account
D) sweep account
Identify and explain the criteria a small business owner should consider when selecting
the state in which to operate his/her business.
Discuss the five steps involved in developing a management succession plan.
Outline the logical approach one should take in the search stage of buying a business.
Michael Porter defines three basic strategies: cost leadership, differentiation, and focus.
Describe each, explain under what conditions each works, and what the pitfalls are of
each one.
Why would the small business owner use trade shows in his/her advertising strategy?
Identify and briefly describe the types of discounts a small business might receive from
a manufacturer.
Discuss the concept of the economic order quantity. What is its value to the small
business owner and what are the three principal elements needed to calculate it?
Joe wants to open a retail outlet. Discuss with him the factors he should consider in
conducting a site selection analysis.
It is important to understand transfer of title and the risk of loss when discussing
purchasing. Discuss the three concepts that explain the concept of title, including the
rules that affect the passage of title and risk.
Why do employees steal?
What factors enable small business innovation?
What role do commercial finance companies, stockbrokerages, and insurance
companies play in providing debt-based loans to small businesses?
Explain how a small business can use factoring to raise funds. What are the advantages
and dangers of this type of financing?
What is a vendor certification program and why would a small business owner use it?
What factors should the small business owner consider when selecting the city location
for his/her small business? What is the index of retail saturation and how does it help a
retailer in making this decision?
Describe how culture can be a barrier to “going global” and offer examples from three
different countries.
What financial data will lenders want to see in your financial section?
Why would someone choose an S-corporation? Discuss who can, how it is done, how it
is different from or similar to other types of corporations, and its advantages and
disadvantages.
Outline the nine areas from which the retailer and service business owner have to
choose in locating their stores. What are the advantages and disadvantages of each?
What is sexual harassment? What can a small business owner do to minimize the
likelihood of sexual harassment?