The simple reorder technique assumes that the rate of usage is constant and that lead
time is constant.
When it comes to debt collection, it is appropriate to seek to motivate the customer to
pay and not get into why the bill hasn’t been paid during the “discussion stage” of the
collection process.
Failure to perform as agreed in a contract constitutes breach.
Job enrichment involves building motivators into a job by increasing the planning,
decision-making, organizing, and controlling functions.
Most venture capitalists make investments in promising business ventures in return for
a share of the ownership.
Individualized (or one-to-one) marketing is a system of gathering data on individual
customers and then developing a marketing plan designed specifically to appeal to their
needs, tastes, and preferences.
In a partnership, profits (and losses) are shared according to any ratio stated in the
articles of partnership.
The regulations and restrictions the government imposes on businesses place a
disproportionate burden on small companies.
The Community Development Block Grants (CDBGs) are extended to cities and towns
that, in turn, lend or grant money to entrepreneurs to start small businesses that will
strengthen the local economy.
Unsecured term loans typically involve very specific terms which may limit the owner’s
freedom to make financial decisions.
Setting seemingly impossibly high objectives, those outside the likely reach of
employees, helps managers to create and maintain a high motivation level.
Liquidity ratios measure the financing supplied by the firm’s owners against that
provided by its creditors.
Always tell the truth, even if it’s bad news, in the business plan.
It is generally safe for the small business owner to assume that his/her children will
succeed him/her into the business.
Consumers have the right to honest communication about the products and services
they buy and the companies they buy them from.
The primary disadvantage of equity capital is that the entrepreneur must give up
someperhaps mostof the ownership in the business to outsiders.
More often, innovation is evolutionary.
A company’s intellectual capital is likely to be the source of its competitive advantage
in the marketplace.
The key to promoting a Web site is networking, building relationships with other
companies, customers, trade associations, on-line directories, and other Web sites your
company’s customers visit.
Information gathered during a job analysis provides the foundation for creating job
descriptions and job specifications.
The executive summary should be written first and should be a broad general discussion
of the business plan.
NAFTA includes provisions reducing tariff and non-tariff barriers and toughening
health and safety standards.
Tight cost control; trained, dependable, honest in-store managers can be success factor
for a restaurant.
The type of franchising growing fastest is product distribution franchising.
The terms of a partnership agreement are legally binding even if some of the items are
illegal.
Direct mail advertisers have found that recipients of direct mail computer disks throw
them away at a higher rate than they do magazines or newspapers.
Small business managers need not be concerned about investing surplus cash since
small amounts of cash sitting around for a few days or weeks are not worth investing.
A significant advantage a franchisee has over the independent small business owner is
participation in the franchisor’s centralized and large-volume buying power.
A partnership cannot be dissolved except in the case of the general partner’s expressed
wish that the partnership cease.
A straight sale of the family business to outsiders is best for the founder because it is
quick, easy, and has minimal tax consequences to the owner.
Owners/founders can be minority stockholders in a corporation but never lose their
final authority or control over business decisions because they are the owners.
In an interview, close-ended questions are most effective because they encourage
candidates to talk.
A penetration pricing strategy is designed to recover a company’s developmental and
promotional cost of a new product very quickly.
Small businesses have found out that social media such as Facebook and Twitter are
expensive.
A manufacturer would be most interested in which of the following criteria for the
selection of a city location for a new business?
A) Public services
B) Transportation
C) Reputation of the location
D) Compatibility with the community
Key to successfully establishing an international location is:
A) securing the necessary licenses to operate in the foreign country.
B) finding the right person to manage the international office.
C) making a substantial investment in personnel.
D) being able to speak the language of the foreign country.
Most franchisors do not offer franchisees territorial protection, denying them the right
to exclusive distribution of the brand name in a particular geographic area.
“C” items, in an ABC analysis:
A) are those items that account for a moderate dollar usage volume.
B) are those that are low-cost and high-volume by nature.
C) do not require detailed record keeping or inventory control.
D) should be tracked with analytical tools and frequent counts.
Companies do a number of things to focus on their customers, including:
A) fixing customer complaints quickly.
B) conducting market research on what superior customer service is.
C) offering quality products at low prices.
D) implementing a TCM management system in their production facility.
Some businesses use ________, in which a company bills a portion of its credit
customers each day of the month, to smooth out uneven cash receipts.
A) process billing
B) a zero balance account
C) alternate billing
D) cycle billing
Which of the following is a danger in choosing a differentiation strategy?
A) Charging a price so high that the company prices itself out of the market
B) Choosing a basis for price leadership that is essentially unimportant to the customer
C) Choosing a market that is not large enough to be profitable
D) An overfocus on overhead costs
Bill and Sally have been tired of the corporate rat race. They leave their investment
banking positions in New York, move to Colorado and start a business raising Mohair
sheep. This couple is an example of the entrepreneurial phenomenon of:
A) corporate dropouts.
B) corporate downsizing.
C) corporate raiders.
D) corporate castoffs.
Which of the following is true about successful entrepreneurs and their vision?
A) It is created independently of their market or their customers.
B) It includes their understanding of the competition and their key market segments.
C) They are able to communicate it and their enthusiasm for it to all those around them.
D) They create it in cooperation with their employees.
A ________ inventory control system is best suited for controlling merchandise
classified as “B” items.
A) partial
B) perpetual
C) visual
D) periodic
Computerized POS systems make it possible for entrepreneurs to use a basic ________
inventory system.
A) ABC
B) perpetual
C) visual
D) virtual
________ franchising involves the owner of an existing business becoming a franchisee
to gain the advantage of name recognition.
A) Product distribution
B) Master franchise
C) Conversion
D) Pure
The failure rate for franchises is:
A) higher than the rate for all new businesses.
B) no different from the rate for all new businesses.
C) lower than the rate for all new businesses.
D) indeterminable because of the Right to Privacy Act.
The browse-to-buy rate is also called the ________ rate.
A) click-through
B) browsing
C) conversion
D) banner
At the end of a(n) ________, a business turns the equipment back over to the leasing
company with no further obligation.
A) capital lease
B) operating lease
C) open-ended lease to return
D) None of the above
________ are positive internal factors that contribute towards accomplishing the
company’s objectives.
A) Strengths
B) Weaknesses
C) Opportunities
D) Threats
________ refers to developing, maintaining, and managing long-term relationships with
customers so that they will want to keep coming back.
A) Customer relationship management
B) Customer retention management
C) Customer management software
D) Customer reassurance management
The marketing goal of a small business is to treat each customer as a(n):
A) individual.
B) group.
C) profit center.
D) cost center.
Asset-based lenders require:
A) government approval.
B) state approval.
C) credit.
D) all of the above.
For entrepreneurs, simply having a great new idea is not enough; transforming the idea
into a ________ product, service, or business venture is the next step.
A) plausible
B) legible
C) intangible
D) tangible
Over the past few decades, business leaders have, in general, become more proactive in
terms of implementing the organizational characteristics of:
A) moral management.
B) amoral management.
C) immoral management.
D) ethical norms.
Jackson Fast Food restaurant lost thousands of dollars’ worth of food when a freezer
broke. To cover the loss, Jackson should have:
A) liability insurance.
B) loss of business insurance.
C) machinery and equipment insurance.
D) There is no insurance for this type of loss.
A small business that puts aside a specific amount of money into a special fund each
month to cover the cost of replacing its highly specialized manufacturing equipment is
using a risk ________ strategy.
A) avoidance
B) reduction
C) anticipation
D) transfer
Which strategy recognizes that not all markets are homogeneous?
A) Focus
B) Differentiation
C) Cost Leadership
D) Price sensitive
Empowerment works best in work environments where:
A) mistakes are quickly identified and punished.
B) authority and responsibility are given out incremental to the most trusted employees.
C) managers function as coaches not as bosses.
D) there is minimal training.
What type of warranty does a seller create when making statements about the condition,
quality, and performance of the good that the buyer substantially relies on?
A) Sales warranty
B) Verbal warranty
C) Express warranty
D) Warranty of merchantability
A competitive profile matrix:
A) identifies a firm’s core competencies.
B) permits the small business owner to divide a mass market into smaller, more
manageable segments.
C) compares the firm’s and its competitors’ key success factors.
D) creates a road map of action for the entrepreneur in order to fulfill his/her company’s
mission, goals, and objectives.
When pricing products, it is important to remember that:
A) there is an ideal price that customers will pay for a given product or service.
B) once the acceptable price range is found, prices should not be changed again.
C) pricing is more an intuitive than a quantitative process.
D) a customer orientation in price setting is most important.
Since 2001 there has been a ________ in the number of public offerings.
A) significant drop
B) significant increase
C) slight drop
D) slight increase
Dividing gross profit by net sales produces:
A) operating expenses.
B) gross profit margin.
C) long-term profitability.
D) gross profit flow.