The parent-founder of a family business is contemplating the potential conflict between
family concerns and business interests. He concludes that a primary family concern is
a. nurture.
b. profitability.
c. survival.
d. avoidance of excessive business debt.
A primary consideration in training professional and managerial personnel is
a. counseling employees regarding their need for training.
b. how much the training will cost in terms of fringe benefits.
c. whether employees are too valuable in their present jobs to be changed.
d. whether the union will allow it.
Every new product must be carefully analyzed in terms of financial considerations in
the _____ stage of the product development process.
a. business analysis
b. idea accumulation
c. product testing
d. total product development
The basic instrument used to guide the researcher and the respondent when surveys are
taken is known as a
a. questionnaire.
b. questioning form.
c. interview outline.
d. guide form.
On occasions when a small business has idle funds, cash should be
a. used to pay creditors in advance.
b. left in the checking account for unforeseen needs.
c. invested.
d. paid to investors.
An inherent problem for couples involved in a family business is that
a. conflicts in the business tend to carry over into family life.
b. hours of work become longer for the wife than for the husband.
c. wives get the menial tasks to perform.
d. husbands find their masculinity threatened.
Though not as common as using personal savings, one of the more often used sources
of financing is
a. asset-based lenders.
b. personal charge card accounts.
c. wealthy individuals.
d. venture capitalists.
In a small business, the most important key to ethical performance is
a. a code of ethics.
b. the personal integrity of the founder or owner.
c. a training program based on the code of ethics.
d. the amount of legislation affecting the organization.
Groups that an individual allows to influence his or her behavior are known as
a. reference groups.
b. referral groups.
c. perceptual groups.
d. associate groups.
Looking to the future, strategic alliances represent ___________ for small
entrepreneurial firms.
a. a serious threat
b. a monopolistic combination
c. promising opportunities
d. a prohibitively expensive strategy
A _____ estimates how much of a product or service will be purchased within a market
over a defined period of time.
a. market forecast
b. market analysis
c. sales forecast
d. sales analysis
The nonprofit corporation currently overseeing the global Internet is called the
a. Global Internet Management Corporation.
b. International Office for Internet Oversight.
c. International Public Internet Corporation.
d. Internet Corporation for Assigned Names and Numbers.
_____________ acquisitions are not popular among many small business owners.
a. Competing
b. Employee
c. Financial
d. Strategic
Operating a home-based business successfully requires that the owner
a. change locations when the business is over one year old.
b. make a cost analysis that clearly divides costs between the business and the home.
c. establish spatial and nonspatial boundaries between the business and the home.
d. keep the baby at home while working.
Which of the following in not one of the benefits of developing a business plan?
a. This forces the entrepreneur to consider systematically all of the factors in starting a
business.
b. It ensures that the startup’s cash flows are manageable, especially in the first 5-7
years.
c. This imposes needed discipline on the entrepreneur and the management team.
d. This can be helpful in selling the new venture to those within the company.
According to Forrester Research, almost ______ percent of small to mid-sized
businesses with fewer than 1,000 employees are interested in outsourcing some type of
application.
a. 20
b. 45
c. 60
d. 85
A basic legal principle involving stockholders is that
a. an ownership interest in a corporation does not confer a legal right to manage the
firm.
b. the board of directors cannot elect the principal owner as president.
c. all dividends are nontaxable.
d. stockholders cannot buy new stock until it is offered for public sale.
A prospective entrepreneur is evaluating the suitability of his own characteristics for an
entrepreneurial career. He realizes that he should be prepared to assume
a. moderate risks.
b. no risks-that is, he should plan to operate conservatively.
c. risks similar to those a gambler assumes in Las Vegas.
d. psychological risks but not financial risks.
How likely is the typical startup to succeed in getting funded by a venture capitalist?
a. Very unlikely (1-2 percent)
b. Unlikely (10-20 percent)
c. Likely (60-75 percent)
d. Very likely (90 percent)
Several problems accompany the use of secondary data. What are they?
Seasons Greetings, a small manufacturer of holiday greeting cards, sells its product
through independent retailers and mail-order marketing. Seasons Greetings is relying on
a. a direct channel of distribution.
b. an indirect channel of distribution.
c. a dual distribution channel.
d. a multiple-outlet distribution channel.
In considering the role of younger family members, the best philosophy is to recognize
that
a. a child should have a right to a job in the business if he or she desires.
b. no family member should be hired at any level.
c. children should have a right to prove themselves.
d. second-generation managers are doomed to failure.
A startup typically does not become profitable or breakeven for
a. the first year.
b. two to three years.
c. four to six years.
d. six to eight years.
Assuming that cash is available, payment for an account payable with terms of 3/10, net
30 should be made on day
a. 3.
b. 10.
c. 13.
d. 30.
Erin Withers, a typical consumer, often purchases goods and services because she feels
her family and fellow workers will approve of these items. Family and co-workers are
_____ for this consumer.
a. reference groups
b. referral groups
c. perceptual groups
d. opinion leaders
The different types of transactions involving small businesses are
a. strategic, financial, and employee acquisitions.
b. financial, employee, and internal acquisitions.
c. strategic, internal, and financial acquisitions.
d. internal, external, and complex acquisitions.
Markup pricing may be expressed in terms of a percentage of either the _____ or the
cost.
a. quantity
b. operating expenses
c. selling price
d. estimated expenses
Business angels provide
a. asset-based loans.
b. factoring.
c. informal venture capital.
d. trade credit.
The saying “When in Rome, do as the Romans do” reflects a philosophy of _________.
a. ethical insensitivity
b. ethical elitism
c. ethical imperialism
d. ethical relativism
Which of the following questions do all types of capital budgeting techniques try to
answer?
a. Is the investment too expensive?
b. Do the future benefits from the investment exceed the cost of making the investment?
c. Will the investment’s time requirements fit the needs of the company?
d. Will the firm’s cash flows be adequate to pay for the investment?
States establish enterprise zones in order to locate businesses where they can take
advantage of the services of other businesses located in the same general area.
The offer and sale of a franchise are regulated by
a. state laws exclusively.
b. federal laws exclusively.
c. both state and federal laws.
d. Federal Trade Commission laws exclusively.
In general, products that are consumed in different amounts have
a. inelastic demand.
b. constant demand.
c. variable demand.
d. elastic demand.
A firm’s packaging of its product to closely resemble similar competing products is an
attempt to take advantage of
a. cognitive dissonance.
b. need conflicts.
c. perceptual categorization.
d. problem evaluation.
To balance out seasonal use, some sporting goods firms manufacture both snow skis
and water skis. This should provide a useful hedge against volatile shifts in market
demand.
The Baucus and Baucus study of 255 corporations found that returns on assets and sales
of law-abiding firms only marginally higher than those convicted of corporate
wrongdoing, indicating that socially responsible practices have, at best, a minimal
long-term impact on profits.
The role of the entrepreneur’s spouse in family conflicts can sometimes be described as
that of a mediator in business relationships between the entrepreneur and the children.
What are the five steps required to implement risk management and its goal of
preserving a firm’s assets and earning power?
Trade show groups claim that the cost of an exhibit is less than one-fourth the cost of a
sales call.
Credit management should be implemented in a business when high levels of bad debt
arise and should continue throughout the credit cycle until the level of bad debt is
rectified.
A detailed analysis of competitors is an important part of a firm’s formal marketing
plan.
Startups in any location will still get off the ground, but long-term performance of the
business may be weakened if the location is a poor one.
In marketing terms, a focus strategy depends upon market segmentation.
List and briefly explain the four basic harvest strategies for the small business.
The franchisee is seldom required to pay the complete cost of establishing the business.
Statistical analysis makes it possible to determine tolerance limits that allow for
inherent variation due to chance.
These days, the rival on the other side of the street from a firm may be a minor threat
compared to an online competitor on the other side of the globe.
A genuine concern for customer needs and customer satisfaction is a powerful force that
energizes the total quality management effort of a small business.
The intermediate supervision stage of business growth is a turning point because the
entrepreneur must learn to rise above direct management and work through an
intermediate level of managers.
By allowing credit sales a seller is following a risk-free practice to increase profits.
Because the method takes into consideration both fixed and variable costs, average
pricing is always an appropriate pricing approach for small businesses.