While market research is a sophisticated and complex process, the small business owner
can conduct some of it for him/herself, but will need assistance interpreting it.
Every risk can be insured.
The primary purpose of building a business plan is to raise capital.
Regardless of how good the plan or its presentation, the entrepreneur should always be
prepared for questions when he/she presents the venture.
Most small business owners know exactly what their legal obligations are to employees
with AIDS.
An American business owner greeting a Japanese executive should use both a
handshake and a bow.
As it is a good idea to take advantage of discounts from vendors, small business owners
ought to stretch accounts payable to at least the first notice of past due.
Direct mail ads typically produce quick results; in most cases, the ad will generate sales
within three or four days after it is received.
The key to determining what needs to be accessible is to determine what are the
“primary function” areas of the business.
Seller and buyer can agree to the terms under which title and risk of loss shift in a
business transaction.
Anti-theft and anti-shoplifting equipment are risk avoidance devices.
Total inventory costs are reduced when the small business manager spends her time and
effort controlling items that represent the greatest inventory value.
The focus strategy depends on creating value for the customer either by being the low
cost producer or by differentiating the product or service in a unique fashion, but doing
it in a narrow target segment.
To make shoplifting charges stick, two of the things the owner/employee needs to be
able to do is to identify the merchandise as belonging to the store and that it was not
paid for.
An important part of effective leadership is not only communicating with employees
but also providing them with the resources necessary to achieve their goals.
Job description explains what a job entails and the duties the person filling it is
expected to perform.
The cultureof a nation includes the beliefs, values, views, and mores that its inhabitants
share.
Innovative companies do not take a passive approach to creativity.
It is not necessary for entrepreneurs with both physical and virtual stores to promote
their Web sites at every opportunity.
In a domestic joint venture, a domestic company forms an alliance with a company in
the target nation.
Investors read business plans in such detail that the executive summary is nice to have
but it is optional.
While GIS software allows a business owner to plot his/her existing customer base on a
map, it does not provide zip code information.
The best way to build a cost leadership competitive advantage is to focus entirely on
manufacturing costs.
Flexplace is a work arrangement in which two or more people share a single full-time
job. For instance, two college students might share the same 40-hour-a-week job, one
working mornings and the other working afternoons.
Part of a “self-audit” when buying a business is to ask yourself, “What do I expect to
get out of the business” and “How much can I put into the business?”
Business strategy outlines how the owner plans to achieve business objectives in the
face of a competitive environment.
The International Trade Program is for small businesses that are engaging in
international trade or are adversely affected by competition from imports.
Today, the marketplace follows a policy of caveat venditor“Let the seller beware.”
For a sign to be effective, its message must be complete and complex enough to be
thought provoking.
A code of ethics is a written statement of the standards of behavior and ethical
principles a company expects from its employees.
Setup or ordering costs are found by multiplying:
A) the number of orders made in a year by the cost of placing a single order.
B) the number of production runs in a year by the cost of setting up a single production
run.
C) Both A and B
D) Neither A nor B
The focus of the small company’s marketing plan is:
A) its product or service.
B) the customer.
C) attracting capital.
D) an evaluation of key competitors.
Which advertising medium offers the greatest ability to selectively target a specific
audience?
A) Newspaper
B) Television
C) Direct mail
D) Radio
The first step in receiving a patent for the invention is to:
A) document the device.
B) search existing patents.
C) establish the invention’s novelty.
D) prove the origination of the idea.
Which of the following is an indication of a dishonest franchiser?
A) Very thorough and complete operations and training manuals
B) Recommending retail prices and providing a list of “approved” suppliers of products
and materials needed for running the franchise
C) Attempts to discourage you from allowing an attorney to evaluate the franchise
contract
D) Not providing a set of detailed earnings projections for each potential franchisee
The most critical disadvantage of the sole proprietorship is:
A) unlimited personal liability.
B) limited access to capital.
C) lack of continuity.
D) limited skills and capacities of the owner.
Entrepreneurs start businesses for a number of reasons including:
A) an opportunity to make a difference.
B) having to deal with less government regulation than as an executive of a large
company.
C) a much lower risk of career failure due to layoff or acquisition than working for a
large company.
D) the opportunity to get rich much quicker than if they work for a large company.
________ is an essential quality for a successful family business but it can also become
a barrier to change. When it provides a foundation, it works well, when it restricts the
future, it becomes a barrier.
A) Shared power
B) Shared values
C) Tradition
D) Family behavior
The “Das Spelunker” corporation, formed in Germany and conducting business in the
United States, is considered to be a(n) ________ corporation.
A) alien
B) domestic
C) foreign
D) local
When planning store, office, or plant layouts, business owners too often focus on
________, rather than enhancing employees’ productivity or maximizing sales.
A) construction schedules.
B) choosing an architect or designer.
C) minimizing costs.
D) None of the above
Which of the following expenses would be considered “fixed”?
A) Wages
B) Raw materials
C) Utilities
D) Rent
For the small business owner there are two major trade agreements, GATT and NAFTA.
Explain each one and its impact on the small business “going global.”
Which strategy allows a small company to maximize the advantages of its smallness
and to compete effectively even in industries dominated by giants?
A) Grand market strategy
B) Mass strategy
C) Niche strategy
D) None of the above
A ________ defines the values underlying the entire company and its ethical
responsibilities to its stakeholders.
A) fidelity
B) promise-keeping
C) company credo
D) code of ethics
Entrances should invite entry. The way to accomplish this is to:
A) have large doors and attractive displays set back from the doorway that can lure
customers into the store.
B) offer discounts.
C) have displays as close to the entry of the store as possible.
D) have a big sign to attract customers.
Two functions are interrelated and remain a continuing challenge to achieve for leaders.
They are:
A) staff their organization with the right people and then create the most appropriate
work environment.
B) behave with integrity in all situations and at all times.
C) respect and support their employees.
D) focus employees’ efforts on challenging goals and keep them driving toward those
goals.
Term loans often have a ________ feature, which means that after three to five years,
the full amount of principal is due before the amortized payments fully repay the loan.
A) parachute
B) covenant
C) balloon
D) handcuff
A successful public relations technique used by local businesses to sponsor and promote
fundraising activities of nonprofit groups is called:
A) cooperative advertising.
B) shared advertising.
C) cause marketing.
D) integrated marketing.
________ listings are short text advertisements with links to the sponsoring company’s
Web site that appear on the results pages of a search engine when a user types in a
keyword or phrase.
A) Drop
B) Virtual
C) Negotiated
D) Paid
A central business district is:
A) the traditional center of town.
B) a plan that contains 12 to 50 stores and has a department store as a leading tenant.
C) a type of “mall” that has experienced 1500 percent growth over the last 5 years.
D) a shopping area that draws its customers primarily from the immediate local area.
Generally, quality control impacts:
A) revenues.
B) gross profit.
C) reduction in costs.
D) All of the above
Two factors are vital to studying the effects of competition on a small firm’s pricing
policies:
A) the location of the competitors and the nature of the competing goods.
B) the pricing.
C) the location of the competitors and their marketing efforts.
D) Both A and B
Becoming a global business depends on instilling a global culture throughout the
organization that permeates:
A) a little of what the company does.
B) some of what the company does.
C) a lot of what the company does.
D) everything of what the company does.
Regarding sexual harassment, employers should realize that they:
A) can be held responsible for third-party sexual harassment.
B) are protected from liability if they are aware of a harassment problem, even if they
don’t take action.
C) are not liable for sexual harassment in the workplace if they have a formal policy
against it.
D) are not liable if they didn’t know it was taking place, even if one could reasonably
expect them to know.
Central business districts:
A) provide ample parking in front of the stores.
B) are characterized by one-stop shopping.
C) tend to have better prices and selection than malls do.
D) are experiencing a resurgence in popularity.
Which price strategy is mostly used for moving stale, outdated, damaged merchandise?
A) Markdown pricing
B) Multiple pricing
C) Bundling
D) Skimming
The goal of the ________ stage in the creative process is to subject the innovative idea
to the test of cold, hard reality.
A) verification
B) gestation
C) investigation
D) transformation
The first step in establishing a feedback loop is deciding:
A) who will be responsible for the measurement of performance.
B) how to measure performance criteria.
C) what will be measured.
D) why it will be measured.
When it comes to the target market, most successful businesses:
A) have broad target markets, permitting them to offer a wide variety of products.
B) have little concern for the image of their company, focusing solely on how their
products meet target market needs.
C) have well-defined “portraits” of the customers they want to attract.
D) don’t have a clue as to their target market but put forth enough effort to succeed
anyway.
________ partners are not active in a business but generally are known to be members
of the partnership.
A) Dormant
B) General
C) Silent
D) Limited
Market research answers what important question for the small business owner?
A) How shall I set up my distribution system?
B) What should my goals and objectives be in my marketing plan?
C) Who are my customers and what are they looking for?
D) What form of business ownership would be most effective in this market?
________ are those things that a business owns which have value.
A) Assets
B) Liabilities
C) Owners’ equities
D) Liquidities
Installment loans have to be repaid in:
A) 5 to 10 years.
B) 10 to 30 years.
C) 1 to 3 years.
D) None of the above
The key to the success of direct mail advertising is:
A) designing the right envelope.
B) the accuracy of the customer mailing list.
C) creative use of color and photographs in the mailing.
D) using key words such as “free,” “hurry,” and “savings.”