There is no connection between social responsibility and profitability.
When trying to prevent employee theft, business owners should create a “police state”
environment and trust no one.
With an existing business, the new owner can depend on employees to help him make
money while he is learning the business.
Failure is an important part of the creative process, as it provides a chance to learn how
to succeed.
One disadvantage of the partnership form of ownership is the great potential for
personality and authority conflicts.
The Zip Code Atlas and Market Planner provides detailed information on sales,
spendable income, etc., by census region, county, and city.
An effective search engine optimization (SEO) strategy must recognize the three basic
types of search engine results – natural or organic listings, paid or sponsored listings,
and paid inclusion.
Few activities in the life of a business are as vital (or as overlooked) as that of
developing a strategy for success once a business moves past its start-up.
Some forms of ownership are much more costly and involved to create.
A general partner is personally liable only for the amount of money he has invested in
the partnership.
Proper cash management techniques call for a small business owner to pay invoices as
soon the invoices arrive.
Geographic Information Systems (GIS) are powerful software programs that allow
entrepreneurs to pinpoint the ideal location for their businesses.
If employees are committed to quality, management’s commitment becomes
unimportant.
The company’s target customer should permeate the entire business, from the
merchandise purchased, in the layout and decor of the store, and on the Web site.
________ of all alcohol abusers are employed.
A) Seventy-seven
B) Sixty-seven
C) Fifty-seven
D) Forty-seven
Investment bankers who underwrite public stock offerings typically look for all but
which of the following characteristics in a small company?
A) A strong record of earnings.
B) A solid position in a stable market.
C) Consistently high growth rates.
D) A sound management team with experience and a strong board of directors.
Case 8-2: TQM and TV in Omaha
Nobody who knew Marvin Tollison ever met a man who liked television better. In the
Navy, he had the opportunity to learn a great deal about his trade. When he finished his
tour of duty, Marvin opened a television repair shop back home in Omaha, Nebraska.
Over the years the quality of his workmanship, his fair prices, and his general overall
good nature made his business flourish. Marvin had a way of finding men and women
like himself when expansion was needed.
Over 17 years, the business had grown from a one-man shop operating in his garage to
a 38-employee television repair staff that was dispatched to customers by two-way
truck radio. Over the years, the time between a customer’s call and the television
repairman getting to the home had increased to about two days because the repairmen
were taking longer with each call. Call-backs (having to “re-repair” equipment) are up
significantly. Marvin wasn’t sure, but he thought some of his customers were going
elsewhere for service.
Can Marvin use TQM to develop a competitive edge? If so, what would you
recommend he do?
Which of the following is not true of a limited liability partnership?
A) All partners are limited partners.
B) Most states restrict this form of ownership to certain types of professions such as
attorneys, physicians, dentists, accountants, etc.
C) Although LLPs have many of the characteristics of partnerships, they are taxed as a
corporation.
D) It must involve a general partner, a limited partner, a silent partner, and a dormant
partner.
The Internet penetration rate is greatest in North America with 78.6% and the second
region of the world in penetration is ________.
A) Oceania/Australia
B) Europe
C) Latin America/Caribbean
D) Middle East
A franchise is a system of distribution in which semi-independent business owners pay
________ and ________ to a parent company in return for the right to become
identified with its trademark, to sell its product or services, and often to use its business
format and system.
A) a percentage of sales; royalties
B) upfront costs; incremental costs
C) royalties; monthly consulting charges
D) fees; royalties
The average cost to create a legal business entity is ________.
A) $2,000
B) $1,000
C) $500
D) $5,000
________ ratios measure the extent to which an entrepreneur relies on debt capital
rather than equity capital to finance a business.
A) Liquidity
B) Leverage
C) Operating
D) Profitability
Sources of potential legal liabilities for the buyer of an existing business include all but
which of the following?
A) Problems with the physical premises, such as hazardous materials.
B) Product liability claims.
C) Labor problems and disputes.
D) Errors and omissions.
________, published annually, matches population demographics with lifestyle
interests.
A) The Lifestyle Market Analyst
B) The Commercial Atlas and Marketing Guide
C) The Zip Code Atlas and Market Planner
D) A Researcher’s Guide to the 1990 Census
Which of the following statements concerning leasing is true?
A) Leasing is an “off-the-balance-sheet” method of financing assets.
B) Although total lease payments for an asset are greater than those on a conventional
loan, most leases do not require large capital outlays as down payments.
C) Leasing gives business owners access to equipment even when they cannot borrow
the money to buy it.
D) All of the above
The three “R’s” of socially responsible business are “reuse,” “recycle,” and “________”.
A) reenergize
B) reinvent
C) reduce
D) retrofit
When would a business choose to locate near the source of the raw material?
A) The company requires an important raw material that is difficult to transport.
B) The company requires an important raw material that is expensive to transport.
C) The company keeps its inventory of an important raw material low to keep costs
down and counts on quick deliveries from suppliers.
D) All of the above
Franchisors generally do which of the following regarding financial assistance to
franchisees?
A) Provide direct financing.
B) Assist in finding financing and occasionally provide direct assistance in a specific
area.
C) Waive royalty fees for franchisees not making an adequate profit.
D) Franchisors provide no assistance because having or finding financing is a
requirement for qualifying for a franchise.
Probably the most important reason to have a partnership agreement is that ________.
A) it identifies the name of the partnership and protects that name from infringement by
others
B) it states the location and the purpose of the business
C) it determines how the partnership and the partners will pay taxes
D) it resolves potential sources of conflict that, if not addressed in advance, could later
result in partnership battles and dissolution of an otherwise successful business
The “big three” of cash management include ________.
A) accounts receivable, overhead, and inventory
B) accounts payable, accounts receivable, and taxes
C) accounts receivable, accounts payable, and inventory
D) accounts receivable, prices, and expenses
One of the most effective bootstrap marketing tactics is to create an image of ________
for the business.
A) uniqueness
B) similarity
C) seriousness
D) all of the above
Angels are an excellent source of ________ money, often willing to wait ________
years or longer to cash out their investment.
A) immediate; 5
B) patient; 7
C) long-term; 10
D) passive; 20
In job enrichment, ________ is the degree to which a job allows a worker to complete a
whole or identifiable piece of work.
A) skill variety
B) task identity
C) task significance
D) autonomy
Which of the following statements concerning financing the purchase of an existing
business is not true?
A) The business seller usually is a good candidate for a source of financing.
B) The deal should allow the buyer to make the loan payment out of the company’s cash
flow.
C) The buyer should wait until late in the purchase process to arrange financing to
avoid processing fees in case the deal falls through.
D) All of the above