Question 1

As a businessperson planning to open a new small business, you know that the business plan should not contain

Accepted Answer

A)   a discussion of the nature and mission of the new business.
B)   information about how much it will cost to open and operate the new business.
C)   any mention of the businessperson's goals; financial institutions just aren't interested in these.
D)   an explanation of why opening a business of this type makes good business sense.
E)   pages and pages of detailed facts and figures.F) A) and C)
G) A) and B)

Question 2

The SBA is a private organisation rather than a government agency.

Accepted Answer

A) True 
 B)False

Question 3

The acronym SCORE stands for

Accepted Answer

A)   Standard Card Options for Retirees.
B)   Sam's Cooperatives Operating in Reno.
C)   Service Corps of Retired Employees.
D)   Service Corps of Retired Executives.
E)   Sonoma City Options for Retired Employees.F) B) and E)
G) All of the above

Question 4

You have been running a successful art and framing shop for three years.You have decided to allow others to use your business name, materials, and methods in operating their own business for a fee.You are going to enter a

Accepted Answer

A)   joint venture.
B)   small-business development centre.
C)   franchise agreement.
D)   venture capitalist agreement.
E)   business contraction.F) A) and E)
G) C) and D)

Question 5

Which of the following statements is not true about small businesses?

Accepted Answer

A)   Small businesses provide technical innovation.
B)   Small businesses create cyclical unemployment.
C)   Small businesses provide employment.
D)   Small businesses provide competition.
E)   Small businesses fill the needs of society and other businesses.F) C) and D)
G) D) and E)

Question 6

It is rare that managers of small businesses lack the management skills necessary to run their businesses.

Accepted Answer

A) True 
 B)False

Question 7

There is much less likelihood of failure with a franchised outlet than with an independently owned small business.

Accepted Answer

A) True 
 B)False

Question 8

Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

Accepted Answer

A) True 
 B)False

Question 9

SBA stands for

Accepted Answer

A)   Special Business Agency.
B)   Small Bond Administration.
C)   Society for Business Alliances.
D)   Special Business Association.
E)   Small Business Administration.F) A) and E)
G) A) and B)

Question 10

By age 26, Tom was a plant manager in the snack-foods division.By 33, he headed the division, one of the most profitable in the corporation.Eventually, however, the company decided to move its corporate offices.Although he loved the job and thought the work was great, Tom's lifestyle was awful.He was on the road so often that he was giving up much of his family life.Tom had also become disenchanted with corporate life.He saw that the closer one got to the top, the more vulnerable one's position became.Thus, Tom left the corporation to start his own snack-foods company.His thoughts and actions most clearly reveal his

Accepted Answer

A)   entrepreneurial spirit.
B)   need for independence.
C)   desire to determine his own destiny.
D)   willingness to find and accept a challenge.
E)   lack of self-confidence.F) None of the above
G) C) and E)

Question 11

Joe decides to start his own business designing websites for other businesses.Joe's business would be classified as a

Accepted Answer

A)   distribution business.
B)   retailer.
C)   production business.
D)   wholesaling business.
E)   service business.F) C) and E)
G) A) and E)

Question 12

The purchaser of a franchise is called the franchisor.

Accepted Answer

A) True 
 B)False

Question 13

Society usually does not benefit from entrepreneurs who pursue their individual goals; it is only the entrepreneurs who reap the benefits of their own work and creativity.

Accepted Answer

A) True 
 B)False

Question 14

Your friend, Shonta, started a graphic design firm about a year ago.The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding.Shonta does not see any problem because she thinks she can easily get all the money she will need from her local bank.What advice might you give her?

Accepted Answer

A)   She is right-the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses.
B)   She is crazybanks do not lend money to small businesses but only to well- known, well-established organisations.
C)   She should sell her business immediately before it fails because most small businesses fail during the first five years.
D)   She should not accept any new clients so that she can end the need to add additional equipment and employees.
E)   She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses.F) D) and E)
G) A) and E)

Question 15

Which statement best describes the general success rate for franchises?

Accepted Answer

A)   Franchises, like other small businesses, have a very high rate of failure.
B)   Franchises are slightly more successful overall than other types of businesses.
C)   Franchises have about a 50 percent chance of being successful.
D)   Franchises have a very high success rate compared to other small businesses.
E)   Obtaining a franchise is a guarantee for a successful business.F) A) and E)
G) A) and D)

Question 16

An individual's desire to create a new business is referred to as

Accepted Answer

A)   the entrepreneurial spirit.
B)   the desire for ownership.
C)   self-determination.
D)   self-evaluation.
E)   the laissez-faire spirit.F) B) and D)
G) C) and D)

Question 17

Chelsea is about to purchase a Baskin-Robbins franchise because she loves ice cream.How much work should Chelsea expect to have to do to make the franchise successful?

Accepted Answer

A)   Most franchisees simply hire managers to run the operations, so she will have to work very little.
B)   She will need to work about twenty hours a week to make sure things are running smoothly.
C)   She should expect to work very hard, putting in long hours about six days a week.
D)   She will have to work a standard forty-hour work week, just as she did at her previous corporate job.
E)   Her franchising agreement likely requires her to be at the store whenever it is open.F) B) and C)
G) B) and E)

Question 18

The various types of businesses attracting small business are generally grouped into service industries, distribution industries, and financial industries.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is the most likely example of a production industry?

Accepted Answer

A)   Wholesale outlet
B)   Retail outlet
C)   Financial enterprise
D)   Subassembly plant
E)   Transportation companyF) A) and B)
G) A) and C)

Question 20

Small businesses account for all nongovernment employment.

Accepted Answer

A) True 
 B)False

Exam 5: Small Business, Entrepreneurship, and Franchises

Which statement best describes the general success rate for franchises?

Correct Answer
verified

Small businesses account for all nongovernment employment.

Correct Answer
verified

Chelsea is about to purchase a Baskin-Robbins franchise because she loves ice cream.How much work should Chelsea expect to have to do to make the franchise successful?

Correct Answer
verified

The acronym SCORE stands for

Correct Answer
verified

There is much less likelihood of failure with a franchised outlet than with an independently owned small business.

Correct Answer
verified

SBA stands for

Correct Answer
verified

Society usually does not benefit from entrepreneurs who pursue their individual goals; it is only the entrepreneurs who reap the benefits of their own work and creativity.

Correct Answer
verified

You have been running a successful art and framing shop for three years.You have decided to allow others to use your business name, materials, and methods in operating their own business for a fee.You are going to enter a

Correct Answer
verified

It is rare that managers of small businesses lack the management skills necessary to run their businesses.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Which of the following statements is not true about small businesses?

Correct Answer
verified

Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

Correct Answer
verified

An individual's desire to create a new business is referred to as

Correct Answer
verified

As a businessperson planning to open a new small business, you know that the business plan should not contain

Correct Answer
verified

The purchaser of a franchise is called the franchisor.

Correct Answer
verified

The SBA is a private organisation rather than a government agency.

Correct Answer
verified

Joe decides to start his own business designing websites for other businesses.Joe's business would be classified as a

Correct Answer
verified

The various types of businesses attracting small business are generally grouped into service industries, distribution industries, and financial industries.

Correct Answer
verified

Which of the following is the most likely example of a production industry?

Correct Answer
verified

Exam 5: Small Business, Entrepreneurship, and Franchises

Which statement best describes the general success rate for franchises?

Correct AnswerverifiedShow Answer

Small businesses account for all nongovernment employment.

Correct AnswerverifiedShow Answer

Chelsea is about to purchase a Baskin-Robbins franchise because she loves ice cream.How much work should Chelsea expect to have to do to make the franchise successful?

Correct AnswerverifiedShow Answer

The acronym SCORE stands for

Correct AnswerverifiedShow Answer

There is much less likelihood of failure with a franchised outlet than with an independently owned small business.

Correct AnswerverifiedShow Answer

SBA stands for

Correct AnswerverifiedShow Answer

Society usually does not benefit from entrepreneurs who pursue their individual goals; it is only the entrepreneurs who reap the benefits of their own work and creativity.

Correct AnswerverifiedShow Answer

You have been running a successful art and framing shop for three years.You have decided to allow others to use your business name, materials, and methods in operating their own business for a fee.You are going to enter a

Correct AnswerverifiedShow Answer

It is rare that managers of small businesses lack the management skills necessary to run their businesses.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following statements is not true about small businesses?

Correct AnswerverifiedShow Answer

Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

Correct AnswerverifiedShow Answer

An individual's desire to create a new business is referred to as

Correct AnswerverifiedShow Answer

As a businessperson planning to open a new small business, you know that the business plan should not contain

Correct AnswerverifiedShow Answer

The purchaser of a franchise is called the franchisor.

Correct AnswerverifiedShow Answer

The SBA is a private organisation rather than a government agency.

Correct AnswerverifiedShow Answer

Joe decides to start his own business designing websites for other businesses.Joe's business would be classified as a

Correct AnswerverifiedShow Answer

The various types of businesses attracting small business are generally grouped into service industries, distribution industries, and financial industries.

Correct AnswerverifiedShow Answer

Which of the following is the most likely example of a production industry?

Correct AnswerverifiedShow Answer

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