Although creativity sometimes involves generating something from nothing, it more
likely results in elaborating on the present, putting old things together in new ways, or
taking something away to create something simpler or better.
The value test that a business must pass to attract financing from lenders and investors
involves proving to them that the venture offers a high probability of repayment or an
attractive rate of return.
The right brain processes information intuitively – all at once, relying heavily on
images.
Defining the duties, responsibilities, contributions, and roles of the partners in a
partnership agreement is not necessary since the law covers these provisions
automatically.
If a business has a lien against any of its assets at the time of the sale, the buyer must
assume them and is financially responsible for them.
A variance is a special exemption to a zoning ordinance.
The Internet is an example of a ________ force.
A) economic
B) demographic
C) technological
D) sociocultural
Which of the following is true about the information-gathering process in competitive
analysis?
A) It is an expensive process that only large companies can afford.
B) It can be relatively inexpensive and easy for the small business owner to conduct.
C) It is a process closely regulated by various federal laws that prohibit doing things
like purchasing competitive products and analyzing them.
D) It is a process that requires expert help and is relatively expensive.
Mini-Case 5-1: Finding a Competitive Advantage
Copreneurs Ed and Yolanda recently opened a vintage used car lot called Cherry Lane.
They sell antique and collectible cars on consignment for the owners at a fee of 30
percent of the selling price. The price is further reduced by 10 percent if a particular car
is not sold within the first 30 days. One of the first customers convinced Yolanda that
this was the only fair thing to do, and in an effort to provide something for “the cost
conscious buyer,” she provided what she thought was excellent customer service and
implemented the idea.
Ed and Yolanda feel Cherry Lane has an ideal location. It is located adjacent to the
city’s baseball stadium, alongside the freeway in the center of all the other car
dealerships. Although Cherry Lane has significant foot traffic, most people never make
offers to buy.
In an effort to increase sales, Ed and Yolanda are working on a new marketing strategy
that they believe should be quite different from the ‘shotgun” approach they had been
using over the last few months.
Considering the three basic small business strategies identified in your textbook, which
one would work best for Cherry Lane? Why might that strategy be successful?
Effective brainstorming involves all of the following except ________.
A) a small group of people
B) an open, uninhibited environment
C) an effective method to evaluate ideas
D) very little structure
A business plan is a written summary of ________.
A) an entrepreneur’s proposed business venture
B) a business venture’s operational, financial, and marketing details
C) the skills and abilities of a business venture’s managers
D) All of the above
An S corporation form of ownership overcomes which disadvantage of the regular or C
corporation form of ownership?
A) The double taxation issue.
B) The expense and difficulty of formation.
C) The amount of regulation and red tape involved in its operation.
D) The potential loss of control by the founder.
A combination of news covered by the media that boosts sales without having to pay is
best described by the term ________.
A) bootstrap marketing
B) entertailing
C) public relations
D) data mining
To convince lenders and investors to put their money into the venture, a business plan
must prove to them that it offers a high probability of repayment or an attractive rate of
return. This is the ________ test.
A) attractiveness
B) competitive
C) reality
D) value
Small companies that operate globally from their inception are referred to as ________.
A) micromultinationals
B) intrapreneurial ventures
C) global companies
D) international companies
The key to choosing the right form of ownership is ________.
A) envisioning where your business will be in 10 years
B) understanding the characteristics of each form and knowing how they affect your
business and personal circumstances
C) forming either an S corporation or a limited liability company since they are the only
forms that offer owners liability protection
D) irrelevant since choosing a form of ownership is merely a technicality and has little
impact on the business and its owner(s)
The most frequently encountered impediment to international trade for small and
medium-sized manufacturers is ________.
A) foreign sales are not sufficiently profitable
B) transportation and shipping costs
C) language and cultural barriers
D) foreign regulations
Potential drawbacks of entrepreneurship may include ________.
A) uncertainty of income, risk, long hours, and high stress
B) uncertainty of income, risk, easy hours, and frequent vacations
C) uncertainty of income, risk, long hours, and the immediate accumulation of wealth
D) certainty of income, risk, long hours, and high stress
Questions like “What are you deeply passionate about?”, “What can you be the best in
the world at?” and “What drives your economic engine?” are important to define your
________, according to the work of Jim Collins.
A) hedgehog concept
B) core competencies
C) critical strategies
D) keys to success
Drug and alcohol abuse by employees results in reduced productivity that is estimated
at ________ billion dollars per year.
A) 262.8
B) 114.7
C) 76.9
D) 15.8