The time gap between placing an order and receiving is called lead time.
The most effective pricing strategy for small businesses is follow-the-leader pricing due
to its simplicity and its ability to keep price parity for the small business.
“Identification” is the designation of goods as the subject matter of the sales contract.
In a domestic joint venture, the businesses share the responsibility and the costs of
getting export licenses and permits, and they split the venture’s profits.
The implementation of TQM is relatively simple in that other than training managers
and employees little else needs to be changed in the company.
Companies have the responsibility to provide investors with an attractive return on their
investment.
“Angels” control a larger pool of venture capital than venture capitalists.
Private placement debt is a hybrid between a conventional loan and a bond.
The internal competitive test focuses on management’s ability to create a company that
will gain a competitive edge.
Export / import, the exchange of goods and services for other goods and services, is
another way of trading with countries lacking convertible currency.
The small business leader performs four vital tasks; communicating the vision, finding
the necessary resources to accomplish the vision, finding the external expertise to help
accomplish the vision, and the ability to motivate his/her own workers to achieve the
vision.
Tracking demographic trends is interesting, but it is not essential to building or
implementing a successful marketing plan.
Like a proprietorship or partnership, in which the death of a founder ends the business,
the corporation doesn’t live beyond the lives of those who gave it life.
A reliable test is one that measures what it is intended to measure.
Starting a part-time business is a popular gateway to entrepreneurship.
In a firm commitment agreement, the underwriter agrees to purchase all of the shares in
the offering and then resells them to investors.
The prices a small business charges influence its image in the marketplace.
Layered financing is the process of piecing start-up capital together from a variety of
sources rather than relying on a single source of funds.
The formula for calculating safety stock is: safety stock = SLF SDL.
The money needed to launch a new business is known as growth capital.
Cloud-based systems enable business owners to track their inventories and to place
orders with vendors quickly and with few errors by linking them to their vendors
electronically.
Before a business owner can build any strategies, he/she must have clear goals and
objectives in order to have an appropriate target to aim his/her strategies toward.
The conditions in the business environment have little influence on lenders’ decision to
invest in a business start-up.
Once a business owner acquires a patent, copyright, or trademark, his/her product or
service is protected by the federal government, which will watch for and prosecute
infringements.
The cost of designing direct mail is less than in other media and is considered quite low.
The business strategy section addresses how the firm will meet the key success factors
necessary for success.
A noncumulative quantity discount grants a discount if a large enough volume of
merchandise is purchased in a single order.
Most business founders intend to pass their companies on to their children, and have a
formal management succession plan for doing so.
Although only about 15 percent of shoplifters are professionals, they can severely
damage a business.
Searching for the one “right” answer is not a barrier to creativity.
In most situations, the ethical dilemma is clear-cut and obvious.
It is important that both the buyer and seller have their objectives thought out, written
down, and prioritized when they go into the negotiation.
When an entrepreneur wants to motivate his/her employees by giving them more
responsibility in their jobs and more control over all the elements of the job, he/she
would use job enlargement.
A partnership is:
A) taxed like a corporation.
B) not subject to the double taxation of some other forms of business.
C) taxed at the lowest rate for an individual.
D) taxed under capital gains laws as all profits are considered to come from appreciated
assets.
________ measure the financing supplied by the company’s owners against that
supplied by its creditors and serve as a gauge of the depth of a company’s debt.
A) Operating ratios
B) Profitability ratios
C) Leverage ratios
D) Liquidity ratios
E-Commerce requires a basic infrastructure somewhere in the channel of distribution to
process orders, maintain inventory, ________, and handle customer service.
A) fill orders
B) process e-mail
C) technology
D) All of the above
Countertrades have significant drawbacks, including:
A) getting goods that are of no direct use to the seller.
B) receiving currency that cannot be exchanged outside the foreign nation.
C) needing a trading intermediary to arrange the countertrade, thereby raising costs.
D) being limited in size to $100,000 per deal.
Foreign licensing has its greatest potential in the licensing of:
A) products.
B) intangibles.
C) goods.
D) franchises.
Which of the following is a disadvantage of outdoor ads?
A) High absolute and relative costs
B) Legal restrictions
C) Narrow reach
D) Lack of flexibility
The transformation of ordinary homes into ________ is driving the growth of
home-based businesses.
A) “outsourcing hubs”
B) “electronic cottages”
C) “personal work zones”
D) “serenity spaces”
Signs are important to the small business owner because they:
A) grow in effectiveness the longer they are in place.
B) are easy to use and to change.
C) provide the maximum space for relatively complex messages.
D) are a medium that is not subject to regulation, thereby permitting maximum
flexibility.
________ thinking is the ability to see the similarities and the connections among
various and often diverse data and events.
A) Divergent
B) Parallel
C) Investigative
D) Convergent
________ tell whether or not the small business will be able to meet its maturing
obligations as they come due.
A) Operating ratios
B) Profitability ratios
C) Leverage ratios
D) Liquidity ratios
In ________ franchising, a franchisee purchases only the right to become identified
with the franchiser’s trade name.
A) trade name
B) pure
C) conversion
D) product distribution
A key characteristic of a successful entrepreneur is:
A) never having failed.
B) expert technical knowledge of the product.
C) learning to fail intelligently.
D) earning at least a 25% return for investors.
The first section of a balance sheet lists:
A) current and intangible assets.
B) current liabilities.
C) claims creditors have against the firm’s assets payable within one year.
D) the owner’s equity in terms of initial capital invested and retained earnings.
Small business people need to remember that:
A) there is an implicit cost of forgoing a cash discount.
B) they should avoid cash discounts.
C) by forgoing cash discounts they have more money for daily expenses.
D) cash discounts have hidden annual interest rates.
Domino’s Pizza, McDonald’s, etc., in Japan and Europe are examples of:
A) foreign management companies.
B) joint venturing.
C) foreign licensing.
D) international franchising.
When it comes to catching and prosecuting shoplifters:
A) there is only a 1 in 100 chance a shoplifter will go before a judge.
B) nearly of all shoplifters are caught and prosecuted.
C) women and juveniles are most frequently caught, nearly 98% of the time.
D) the store owner or employees must catch the shoplifter in the store to make the
charges stick.
Market research for a small business can be:
A) arbitrary.
B) informal.
C) random.
D) haphazard.
Business valuation is partly an art and partly:
A) a craft.
B) a science.
C) a sale.
D) a purchase.
To calculate the IRS, a retailer needs to know the number of customers in the area, the
retail expenditures for his/her product, and the total square feet of space allocated to
selling his/her kind of product in the trading area.
The credit crunch has hit those entrepreneurs seeking between $100,000 and ________.
A) $3 million
B) $500,000
C) $1 million
D) $750,000
Which of the following is a way to smooth the transition of leadership/management
from the seller of a business to the buyer?
A) Focus on the customer, offer new incentives, improve customer service.
B) Focus on the employees, listen to them, keep them informed.
C) Concentrate on operations, updating equipment and changing processes.
D) Visit your competitors and introduce yourself and get to know them.
The kaizen philosophy holds that:
A) once an improvement is implemented, no other improvements are necessary.
B) small improvements made continuously over time accumulate into a radically
reshaped and improved process.
C) major improvements made continuously over time accumulate into a radically
reshaped and improved process.
D) None of the above
The ________ pricing strategy often reinforces the unique, prestigious image of a
company.
A) penetration
B) introductory
C) discount
D) skimming
One of the Internet’s greatest strengths is its ________ nature.
A) efficiency
B) collectivistic
C) interactive
D) atavistic
A new product ________ pricing strategy is often used in markets with little
competition and when the company seeks to recover start-up costs quickly.
A) penetration
B) skimming
C) discount
D) sliding-down-the-demand-curve
________ were created by the SBA in 1992 to provide loans under $50,000 that are
normally shunned by banks.
A) Microloans
B) Preferred loans
C) Seasonal line of credits
D) 8(a) program loans
At the end of a(n) ________, a business may exercise an option to purchase the
equipment, usually for a nominal sum.
A) capital lease
B) operating lease
C) open-ended lease to return
D) None of the above
Which financial forecast should be realistic?
A) Pessimistic
B) Most likely
C) Optimistic
D) All of the above
The ________ is the area within which the two parties can reach an agreement.
A) bargaining zone
B) market
C) selling zone
D) buying zone
The average small business owner works ________ hours per week.
A) 39.5
B) 54
C) 40
D) 80
Newspapers are flexible and provide selected coverage in the firm’s trading area.
The ________ is a firm commitment by both sides that they are ready to move toward
closing the sale of the business.
A) due diligence process
B) sale deed
C) loan covenant
D) letter of intent
What is ergonomics and why is it important?
Discuss the importance of knowing your firm’s strengths and weaknesses and what
opportunities and threats exist in the external environment.
What are the five cash management roles an entrepreneur needs to fulfill in his/her
small business?
What is the entrepreneur’s role as a leader in the small business?
How can a small business owner prevent employee theft?
Explain the role of commercial banks as source of debt capital for small businesses.
What types of financing are available from commercial banks?
Discuss joint ventures, identifying the two primary types, and why a small business
might consider using a joint venture to go global.