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The key to successfully establishing an international location is properly screening for
the right partner company with compatible goals and products/services.
Due to the low cost, most small businesses rely almost solely on outdoor/billboard
advertising.
In the excess-earnings approach to business valuation, the earnings of comparable
companies are needed to set the valuation of the company.
Entrepreneurship is the result of a disciplined, systematic process of applying creativity
and innovation to needs and opportunities in the marketplace.
Tradition, while important, is not essential to a successful family business.
Praise, recognition and daily demonstrations of respect for an individual can be
displayed on a regular basis at absolutely no cost.
The costs of merchandise used in computing markup include wholesale price, incidental
costs, and profit minus any discounts.
The cost of goods sold represents the total cost, including distribution, of the goods sold
during the year.
By choosing certain forms of ownership, an entrepreneur does not give up some control
over the company.
Entrepreneurial success requires little more than a good idea for a product or service.
The Americans with Disabilities Act requires all companies to make their facilities
accessible to disabled customers and employees.
Non-price competition is using personal service, free delivery, and other extras to attract
and keep customers without changing prices.
When there does not exist a positive organizational culture which stresses ethical
behavior regardless of consequences, employees may respond to feelings of pressure
and compromise personal ethical standards to ensure that a contract is not lost or that a
project is completed on time.
An SBIC can lend up to 40% of its private capital to a single client.
Lenders and investors look for the experience, qualifications and age of the people who
will breathe life into the plan.
In marketing your company globally via the Web, it is recommended to include several
"language buttons" on the opening page of a site that take customers to pages in the
language of their choice.
Any company with 15 or more employees and any buildings occupied after January 25,
1993 must comply with the Americans with Disabilities Act.
A business plan's financial forecasts should reflect the company's ability to repay loans.
Criteria for a "good location" are universal and apply to all types of small businesses.
The problem with using full absorption cost information when setting prices is that it
clouds the true relationships among price, volume, and costs by including fixed
expenses in unit cost.
Approximately 6% of the average price tag in a small business is there due to
shoplifting losses.
A skimming pricing strategy sets a relatively high price for a product to appeal to the
segment of the market which is not sensitive to price.
Objectives are the broad, long-range attributes that a business seeks to accomplish.
Tina is dismantling her assembly-line operation and giving her workers responsibility
for the entire job of creating the arc welders her company sells. By doing this, Tina is
using a job enrichment strategy by specifically increasing task identity.
The traditional method of product costing, absorption costing, is extremely useful in
helping the manufacturer determine prices or the effect of price changes.
According to experts, the most important factor in franchising is location.
Training programs often involve both classroom and on-site instruction to teach
franchisees the basic operations of the business from producing and selling the goods or
services to purchasing raw materials and completing paperwork.
Asset-based financing is an efficient means of borrowing because the business only
pays for the capital it actually needs and uses.
The focal point of the entire strategic plan and the competitive strategy chosen is the
customer.
Sound strategies increase the likelihood that business objectives will be achieved.
An S-corporation can issue both voting and non-voting common stock to its
shareholders.
Left-brain thinking is at the heart of the creative process.
The cushion owners build into their inventory to prevent stockouts is called demand
stock.
One of the policies of sexual harassment is to not have sanctions and penalties for
engaging in harassment.
Generally speaking, small businesses are more effective at relationship marketing than
larger companies.
Often joint ventures fail because the entrepreneur didn't:
A) define at the outset important issues such as each party's contributions and
responsibilities, the distribution of earnings, the expected life of the relationship, and
the circumstances under which the parties can terminate the relationship.
B) understand in depth their partner's reasons and objectives for joining the venture.
C) select a partner who shares their company's values and standards of conduct.
D) All of the above
________ is finding something while looking for something else.
A) Tenacity
B) Ambiguity
C) Opportunity
D) Serendipity
Which of the following statements is correct?
A) Entrepreneurs must recognize that actions taken which conflict with society's ethical
standards incur a very high price.
B) The reputation of a business can be harmed severely by the actions of a single
employee. Trust, once broken, is difficult to mend.
C) Customers are not likely to do business with a firm with whom they feel treated
them in an unethical fashion.
D) All of the above
The most expensive franchises in terms of total investment are:
A) retail franchises.
B) business service franchises.
C) McDonald's franchises.
D) hotel and motel franchises.
The most litigated subject of the franchisee agreement is:
A) franchisee fees.
B) advertising expenditures.
C) termination of contract.
D) resale price maintenance clauses.
The courts use the presence or absence of a(n) ________ to distinguish between serious
promises and those that are not serious.
A) consideration
B) contractual capacity
C) agreement
D) written communication
If a small business owner wanted an international vendor, he/she could use:
A) MacRae's Blue Book.
B) Thomas.net.
C) Kelly's Manufacturer and Merchant's Directory.
D) Sources of State Information and State Industrial Directories.
When shopping for a vendor, a small business owner should seek:
A) the best transfer of risk possible.
B) the lowest price.
C) the best price at acceptable quality.
D) to change vendors often in order to get the lowest price.
In the creative process, ________ involves viewing the similarities and differences
among the information collected.
A) transformation
B) investigation
C) incubation
D) verification
The most common reasons owners of small- and medium-sized businesses give for
selling their businesses are:
A) need for money and low return on investment.
B) boredom and burnout.
C) low return on investment and burnout.
D) poor location and low return on investment.
________ measures a company's liquidity and its ability to pay its bills and other
financial obligations on time by tracking the flow of cash into and out of the business
over a period of time.
A) Forecasting
B) Cash flow
C) Cash on hand
D) None of the above
The principle behind a ________ strategy is to select one or more market segments,
identify customers' special needs, and approach them with a good or service designed to
excel in meeting these needs.
A) cost-leadership
B) differentiation
C) focus
D) concentration
The vendor certification process assumes:
A) all vendors are charging the same prices.
B) the use of a cross-functional team to conduct the evaluation.
C) the business owner has detailed knowledge of the vendors.
D) vendors are publicly owned so information can be gathered on each of them.
To create an environment for your people that facilitates ethical behavior, an
entrepreneur should:
A) set the tone and establish and enforce policies.
B) not need to educate.
C) punish whistle blowers.
D) All of the above
The type of companies that are an important channel of foreign distribution for small
companies just getting started in international trade or for those lacking the resources to
assign their own people to foreign markets are referred to as:
A) export management companies.
B) joint ventures.
C) sole proprietorships.
D) export trading companies.
Which of the following is correct?
A) Although fancy graphics, bright colors, playful music, and spinning icons can attract
attention, they also can be quite distracting and very slow to download.
B) Sites that download slowly may never have the chance to sell because customers
will click to another site.
C) None of the above
D) Both A and B
The ________ shoplifter is often a regular customer, well-respected individual, etc.
A) juvenile
B) kleptomaniac
C) professional
D) impulse
The ________ is a transfer of ownership strategy for an owner to transfer the company
to his/her children while retaining control over it him/herself.
A) grantor-retained annuity trust
B) family limited partnership
C) revocable trust
D) estate freeze
Which one of the following is a company's stakeholder?
A) Employees
B) Unions
C) Investors
D) All of the above
The real benefit of barter for the entrepreneur is that:
A) it is essentially without cost to the business owner.
B) it is considered a depreciable item for tax purposes rather than as income.
C) it saves the small business owner between $50,000 and $150,000 a year on average.
D) it is "paid" for at the wholesale cost of doing business, yet it is credited at the retail
price.
For retailers, lighting:
A) is used to attract customers to a specific display.
B) is an expensive investment.
C) has little impact on the overall appearance of the business.
D) requires the same considerations as for manufacturers.
What drives my customers' buying behavior? Are they receptive to new products or are
they among the last to accept them? What values are most important to them? These
questions are to identify:
A) psychographic data.
B) geographic data.
C) demographic data.
D) All of the above
Some of the reasons which small business owners should consider borrowing money
are:
A) gaining market share.
B) refinancing existing debt.
C) taking advantage of cash discounts.
D) All of the above
The biggest barrier to small business exports is:
A) the lack of experience.
B) the lack of financing.
C) not understanding other cultures.
D) not having appropriate products for export.
In a grantor-retained annuity trust:
A) there is an attempt to minimize taxes on a family by creating two classes of
stockpreferred stock, whose value is locked in, and common stock, whose value reflects
the market value of the business.
B) a business owner can pass on up to $10,000 annually, which is exempt from federal
gift taxes.
C) the grantor retains the voting power and interest income from the stock in the trust
for up to ten years.
D) the surviving owner or heir of a family business has the right to purchase the stock
of the deceased owner at a price established by a predetermined formula.
Which of the following valuation methods does not consider the future income-earning
potential of a business?
A) Balance sheet technique
B) Excess-earnings method
C) Discounted future earnings approach
D) Market approach
A ________ is an agreement between an exporter's bank and the foreign buyer's bank
that guarantees payment to the exporter for a specific shipment of goods.
A) bank draft
B) letter of credit
C) COD
D) line of equity
________ are specific measurable targets to be accomplished in a defined time period.
A) Core competencies
B) Objectives
C) Goals
D) Key success factors
John wants to answer the question, "What drives my customers' buying behavior?" The
best information to address this question comes from:
A) demo/geographics data.
B) geographics data.
C) demographics data.
D) psychographics data.
A danger of an excessive investment in inventory for the small business is:
A) excessive inventory taxes by local and state government.
B) minimizing reordering costs.
C) creating too quick a turnover of inventory.
D) tying up an excessive amount of the firm's capital.
An effective performance appraisal system:
A) focuses on behavior, action, and results.
B) focuses on fixing employee weaknesses.
C) is both personal and general in terms of the comments made.
D) is dominated by the manager giving feedback and asking if he/she is understood.
If you were evaluating your college administration for effective leadership behaviors,
you need to look for:
A) their ability to husband and protect resources from misuse.
B) their short-term focus, their ability to see the detail needing to be accomplished.
C) the ability to encourage creativity in employees.
D) all of these things.
Each time an ad is displayed is called a(n):
A) clustering.
B) filtering.
C) impression.
D) loading.
________ focuses everyone's attention and efforts on the same target market. It is an
expression of what the owner believes in.
A) The mission statement
B) The company vision
C) The strategic plan
D) The operational plan
Briefly discuss the barrier factors before launching into an e-commerce.
What guidelines should be kept in mind when deciding how to value a company?
What advantages does a partnership offer the entrepreneur over forming a sole
proprietorship?
Explain the advantages and disadvantages of a small company "going public."
Discuss the criteria for an ideal domain name.
What are the sources of potential legal liabilities the purchase might expose?
How does the entrepreneur choose the region of the country for his/her business?
What financial records should be examined when determining the financial soundness
of a company and what should the entrepreneur look for in each?
Discuss the Ten Myths of E-Commerce.
Review the key legal issues an entrepreneur needs to consider when evaluating an
existing business.
A friend wants to ensure that his succession plan succeeds. Explain how a "survival kit"
can help the management plan succeed.
One of the seven ways a small business owner can "go global" is through trade
intermediaries. Identify the six types of trade intermediaries and explain why a small
businessperson might use each one.
What information should be included in the executive summary? Outline the main
points.
What is a company's USP?
Describe core competencies and the role they play in helping the company segment its
market and develop effective competitive strategies.
Discuss the purchasing plan, briefly describing each of the five key elements of the
plan.
What is the small business's responsibility to employees in terms of coping with AIDS
in the workplace and having a legal and humane AIDS policy?
Outline the process of buying a franchise, naming and briefly explaining each step you
should go through.
