Most firms calculate their quick assets by subtracting the value of their inventory from
their current asset total.
A limited partner is personally liable only for the amount of money she/he has invested
in the partnership.
Responsible online merchants should keep shipping and handling charges reasonable,
but do not need to show them early in the check-out process.
A common pricing mistake entrepreneurs often make is failing to recognize the extra
value, convenience, service, and quality they offer their customers – all of which
customers are willing to pay for.
The most common pricing mistake small business owners make is setting the price for
the products and services they sell too high.
Socially responsible business owners focus on the three Rs: reduce, reengineer, and
recycle.
Trade name franchising is a system of franchising in which a franchisee purchases the
right to use the franchisor’s trade name without distributing particular products under
that name.
A wiki is a low-cost application that appears like a small television screen on a Web
site, a blog, or a computer desktop and performs a specific function.
Venture capital firms rarely take an active role in managing the business in which they
invest.
It is much easier to lower a product’s price once it is on the market than to increase it
after its introduction.
Networking through personal contacts and the Internet is one of the best ways to find
angels, who usually prefer to invest in local businesses operating in industries they
know something about.
Rather than piecing together their startup capital from multiple sources as they have in
the past, entrepreneurs now are relying on a single source of funding.
Creativity and innovation are the signature of small, entrepreneurial businesses.
The single most important ingredient in making a successful public offering is
________.
A) choosing a capable underwriter
B) negotiating a favorable letter of intent
C) preparing a suitable registration statement
D) filing Regulation D with the SEC
The first step in establishing a successful global franchise arrangement is to ________.
A) generate lead for potential franchisees
B) structure the franchise deal
C) identify the country or countries that are best suited to the franchiser’s business
concept
D) select quality candidates
The job ________ design strategy involves cross-training workers so they can move
from one job in the company to others, giving them a greater number and variety of
tasks to perform.
A) simplification
B) enlargement
C) enrichment
D) rotation
Which of the following is not a characteristic of a well-written objective?
A) Realistic, yet challenging
B) Measurable
C) General
D) Timely
________ are those items of value the business owns; ________ are those things the
business owes.
A) Assets; liabilities
B) Liabilities; assets
C) Ratios; equities
D) Equities; liabilities
Which of the following is not something that a small business owner should do to
manage a culturally diverse workforce successfully?
A) Learn to recognize and correct other’s biases and stereotypes.
B) Avoid making invalid assumptions.
C) Concentrate on communication.
D) Continue to adjust your company to your workers.
The top business challenge that drives pricing decisions is the ________.
A) increased price transparency
B) increased price sensitivity of customers
C) need to protect the brand’s image
D) increased pricing aggressiveness from competitors
An effective approach to successful collections includes ________.
A) an abrupt, in-your-face style of communication once a payment is late
B) waiting to invoice and communicate with the customer once a payment problem
clearly exists
C) setting up an automated collection system to generate “Past Due” notices that does
not require personal intervention
D) timely, well-communicated payment expectations with well-documented records
The Sound Shop buys a popular programmable telephone from a supplier for $12.19. If
the desired markup of retail price on the telephone is 35 percent, the retail price should
be ________.
A) $34.83
B) $18.75
C) $16.46
D) $20.11
An export trading company ________.
A) is a business that buys and sells products in many countries, either in its own name
or as an agent for its buyer-seller clients
B) typically offers a wide range of services such as exporting, shipping, storing,
distributing, and others to their clients
C) is formed by an agreement by which a licenser gives a foreign licensee the right to
use a patent, trademark, copyright, technology, and products in return for a percentage
of the licensee’s sales or profits
D) Both A and C above
An excessively high average payable period ratio ________.
A) suggests that the company is making the best use of its available cash balance
B) indicates that the company is doing a poor job of collecting its accounts receivable
C) indicates the presence of a significant amount of past-due accounts payable
D) suggests that the company is highly liquid
An embargo is ________.
A) a duty, or tax, that a government puts on products that are imported into the country
B) the maximum amount of a product that can be imported or exported
C) a prohibition or suspension of foreign trade of specific imports or exports
D) a law that a government uses to regulate products that are imported into the country
According to the ________, one should “treat other people the way you would like
them to treat you.”
A) television test
B) utilitarian principle
C) family test
D) golden rule
Which of the following issues would a typical partnership agreement address?
A) The contributions of each partner to the business.
B) How the partnership profits (or losses) will be distributed.
C) How a partner can sell her/his ownership in the business.
D) All of the above
An entrepreneur can potentially improve collections by ________.
A) contacting the customer once the bill becomes past due to verify they have received
the bill and that it is accurate
B) negotiate payment if the customer is unable to pay the full amount on time
C) developing a rapport with the customer that will lead to prompt payment
D) All the above
Explain the differences among job simplification, job enlargement, job rotation, and job
enrichment. Why should small business owners utilize these concepts?
Identify and explain five of the eight criteria a small business owner should consider
when selecting the state in which to locate her/his business.
Outline the eight strategies for “going global” available to the small business owner.
Mini-Case 14-1: Hungarian Heaven
Mike Pontya has operated a neighborhood restaurant in Cleveland for over 30 years.
Mike is planning to move to Arizona because of his health, and has put the business up
for sale. The restaurant, which caters to the local trade, is well known in the Hungarian
community of Cleveland as having the best authentic Hungarian food in town, but it is
not in a traditional restaurant district. The restaurant has parking for 10 cars. Most
customers park on the street. In the past, this was not a problem as there was a great
deal of walk-in business from the neighborhood. Now, however, a new four-lane
highway passes by the front door of the restaurant. There is a stoplight on the corner the
restaurant is on to improve access to the highway for drivers emerging from the
neighborhood. The flight to the suburbs has taken a heavy toll on the neighborhood.
However, the restaurant is still doing well financially.
Terry and Judy Kozma are brother and sister who share a love for cooking and a desire
to be in the restaurant business. All of their relatives have encouraged them to quit their
jobs and buy the restaurant. Terry and Judy were reared two blocks from the restaurant,
and both worked part-time for Mike Pontya while in college.
What site analysis criteria are relevant to Terry and Judy’s evaluation of the restaurant’s
location?
Explain the concept of a value proposition as per the Business Model Canvas.
Since the primary weapon to protect intellectual property is the legal system, what
would you advise the friends if they have to protect intellectual property sometime in
the future by threatening a lawsuit?
Why is developing a management succession plan so important to the founder of a
family business? Identify and briefly describe the steps of a successful plan.