Debt financing comes from lenders who will be repaid at a specified interest rate within
an agreed-on time span.
Just-in-time delivery increases inventory costs.
If a business has an operating history, its future needs can be estimated with relative
accuracy, even with substantial growth.
Selecting the type of business to enter is an example of operational planning.
A disadvantage of franchising is the voluminous paperwork needed to provide
disclosure documents to potential franchisees.
The U.S. legal system is based on the principle that not everyone is equal under the law.
The marketing concept states that a firm should put consumer needs first, even if it
means foregoing profits.
The greatest barriers to effective communication are inattention and poor listening.
Key person insurance is rarely used in small firms.
Pre-nuptial agreements pose a problem when a couple running a family-owned business
gets divorced.
The Census Bureau of the U.S. Department of Commerce furnishes demographic
information for small business owners.
Use taxes are usually imposed on the use, consumption, or storage of goods within a
taxing jurisdiction.
Text marketing is an expensive marketing tool.
How can children be prepared to enter the family-owned business?
a) Allow them to work in senior management positions and make important decisions.
b) Give them a permanent leadership position in the business.
c) Promote them rapidly in the business out of turn.
d) Let them work for another company to gain experience.
Strategic planning is likely to incorporate:
a) provision for low-cost financial security.
b) the selection process of employees.
c) preferential promotion of employees.
d) optimum usage of money.
A(n) _____ budget plans expenditures for obtaining, expanding, and replacing physical
facilities.
a) capital
b) operating
c) sales
d) cash flow
_____ is reducing the number of employees to increase efficiency.
a) Freezing
b) Rightsizing
c) Procuring
d) Resourcing
Which of the following is characteristic of a small business owner?
a) Innovative and focuses primarily on profitability and growth
b) Perceives the business as being an extension of his or her personality
c) Starts and manages a business for many reasons other than furthering personal goals
d) Prefers a less relaxed and more aggressive approach to running the business
A(n) _____ is a formalized examination and/or review of a company’s financial records.
a) budget
b) audit
c) forecast
d) deed
_____ involves prodding businesses to improve the quality of their products and to
expand consumer knowledge.
a) Consumerism
b) Commercialism
c) Diversification
d) Segmentation
Which of the following is the first step in the creative selling process?
a) Making initial contact
b) Presenting the product
c) Preparation
d) Prospecting
_____ helps insure against employee fraud or theft.
a) Fidelity bonding
b) Coinsurance
c) Surety bonding
d) Casualty insurance
An advantage of selling a family-owned business to outsiders is that:
a) the former owner receives an assured income.
b) it provides a constant source of income to all the family members.
c) the stature of the family is maintained.
d) the owner assumes more responsibility with resultant happiness.
_____ helps to provide people with an understanding of their relationship with their
supervisors, fellow workers, and customers.
a) Counseling
b) Selecting
c) Delegating
d) Judicial due process
_____ is an integrated-coordinated system of activities to transform raw materials into
finished products delivered to the end consumer.
a) Inventory control
b) Economic order
c) Quality circle
d) Supply chain
Summarize the costs of carrying inventory.
What is the role of packaging in influencing customers to buy a product?
Explain how a small family business owner must deal with incompetent family
members working in the business.
Describe the role of technology in the operations of businesses.
What is merchandising?
What are the features of an S corporation?
In the context of small businesses, what is bartering?
Explain how a sales forecast is used to determine the sales volume for a small business.