The prices a small business charges influence its image in the marketplace.
Capital requirements, estimate earnings, and return on investment are three aspects of
the financial feasibility analysis.
Globally, one in eight adults is actively engaged in launching a business.
A principal advantage of buying an existing business is the purchaser’s ability to rely on
the previous owner’s experience.
A company’s strategic plan defines the values underlying the entire company and its
ethical responsibilities to its stakeholders.
The left brain handles language, logic, and symbols.
The average community net income is the key factor in Reilly’s Law of Retail
Gravitation to determine the point of customer indifference.
One of the first lessons in franchising is, “Do your homework before you get out your
checkbook.”
Because the manufacturer’s capacity in the short run is fixed, pricing decisions should
be aimed at employing these resources most efficiently.
Typically, small business owners should prepare a projected weekly cash budget for at
least six months and quarterly estimates for the remainder of the year, being careful to
cover all seasonal sales fluctuations.
If a sole proprietorship fails, the owner is not liable for its debts since the business is a
separate legal entity.
Generally, an industry is more attractive when competitors are not similar in size or
capability.
The major problem with relying on the legal system to enforce ownership rights is the
cost of infringement lawsuits, which can quickly exceed the budget of most small
businesses.
If a business owner cannot afford to invest in foreign facilities and does not have time
to learn the foreign market, but is willing to give someone else the right to make and
market her/his product for a fee and royalties, her/his best bet for entering the foreign
market is ________.
A) a foreign management company
B) joint venturing
C) foreign licensing
D) international franchising
By planning cash needs ahead of time, a small business is able to achieve all but which
of the following?
A) Make the most efficient use of available cash.
B) Provide the opportunity to forgo quantity and cash discounts.
C) Finance seasonal business needs.
D) Provide funds for expansion.
The “ideal price” for a product ________.
A) is high enough to cover costs and to generate a profit
B) is low enough to produce adequate sales volume
C) today may be different from the “ideal price” tomorrow
D) All of the above
Currently, women make up ________ percent of the U.S. workforce.
A) 31
B) 46
C) 28
D) 40
Most customers never complain to the business; in fact, for every complaint that a
company receives, there are ________ other complaints that go unspoken.
A) 2
B) 7
C) 10
D) 17
Entrepreneurs are most likely to give up more equity in their businesses in the
________ phase of their companies than in any other.
A) startup
B) product development
C) product testing
D) product shipping
________ tells what portion of the total revenue remains, after covering variable costs,
to contribute toward meeting fixed expenses and earning a profit.
A) The full absorption statement
B) The break-even selling price
C) The contribution percentage
D) Cost-plus pricing
________ small businesses take the time to conduct a credit check.
A) All
B) Most
C) Few
D) None of the above
An entrepreneurial company can differentiate itself by creating a distinctive image in
customers’ minds or by offering ________.
A) superior service and quality
B) exceptional design and convenience
C) speed and performance
D) All the above
All of the following are enhancements to individual creativity except ________.
A) keeping a journal to record thoughts and ideas
B) limiting your reading sources
C) taking time off
D) allowing yourself to be creative
A measurement of the cost a company incurs to generate each purchase or customer
registration is the ________.
A) cost per acquisition (CPA)
B) bounce rate
C) conversion ratio
D) browser-to-buy ratio
The most significant ways online companies can bolster customer service include all of
the following except ________.
A) create a well-staffed and well-trained customer response team
B) offer a simple return policy
C) provide an easy order tracking process
D) make financing available
Most entrepreneurs believe that ________ is what matters most, but ________ is the
most important financial resource for a small business owner.
A) cash; profit
B) profit; cash
C) profit; inventory
D) inventory; cash