Question 1

John and Ruby Couch just opened a computer store in a small community.Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience-that is, marketing, finance, and personnel experience-in the computer-store business because

Accepted Answer

A)   their business is unlikely to grow and earn large business profits.
B)   the computer-store business is a fad.
C)   management know-how is insignificant to small-business success.
D)   small businesses survive large businesses by three years.
E)   about two out of three small firms close within five years of their founding.

Question 2

An investor who is considering investing in Moriah's Burger Bar would not likely want to see her business plan.

Accepted Answer

A) True 
 B)False

Question 3

Jamie applies for a small-business loan from the SBA.If he is approved for the loan, where will the money actually come from?

Accepted Answer

A)   The government
B)   Private lenders
C)   Venture capitalists
D)   The Small Business Administration
E)   Other small businesses

Question 4

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
-Refer to Mc-King Chicken.Which of the following would not be an advantage of a franchise?

Accepted Answer

A)   He gains fast and well-controlled distribution.
B)   He has more capital available to expand.
C)   Outlets are maintained and operated according to a set plan.
D)   He has the opportunity to start a business with limited capital.
E)   Success will cause another outlet to be opened nearby. E

Question 5

Small businesses are generally managed by professional managers.

Accepted Answer

A) True 
 B)False

Question 6

Beau works for a small pest-control company that has a total of five employees.From his point of view, the primary disadvantage of a small business is the

Accepted Answer

A)   risk of failure.
B)   limited ability to raise capital.
C)   limited potential for him to advance.
D)   personal relationship with his employer.
E)   complicated management structure.

Question 7

The Hamptons enjoy owning and operating their own restaurant.They enjoy being the masters of their own destinies and closing down the restaurant for one week a year so that they can take a vacation.The Hamptons seem to enjoy which advantage of a small business?

Accepted Answer

A)   Limited potential
B)   Personal relationships with customers
C)   Independence
D)   Personal relationships with employees
E)   Ability to adapt to change

Question 8

The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of

Accepted Answer

A)   employment.
B)   competition.
C)   technical innovation.
D)   capital.
E)   quality products.

Question 9

Imagine that you want to open your own small business.You will probably be most concerned with having

Accepted Answer

A)   a lot of inventory in the warehouse on opening day.
B)   a really good lawyer and an even better accountant.
C)   the best Madison Avenue ad agency money can buy.
D)   a good source of capital and good management skills.
E)   a top-notch marketing consultant and a lot of inventory in the warehouse.

Question 10

Which of the following is an advantage to the franchisor in a franchise agreement?

Accepted Answer

A)   Opportunity to start a business with limited capital
B)   Access to local advertising materials
C)   Fast and selective distribution of products
D)   Chance to participate in national advertising
E)   Chance to minimise costs through cooperative buying

Question 11

Small businesses are typically managed by people who started and own them.

Accepted Answer

A) True 
 B)False  True

Question 12

To qualify as a small business, an agricultural company's maximum annual receipts must be no more than

Accepted Answer

A)   €500,000.
B)   €9 million.
C)   €800,000.
D)   €1 million.
E)   €750,000.

Question 13

David Fisher, a recently retired corporate executive, is becoming restless in his new role and would like to make this transition smoother by participating in the business community in some limited manner.Since David is financially secure and primarily interested in some sort of volunteer work, he should consider becoming involved with which of the following SBA programmes?

Accepted Answer

A)   ACE
B)   SBIC
C)   SBDC
D)   SBI
E)   SCORE

Question 14

Small-business investment companies

Accepted Answer

A)   are an extension of the SBA.
B)   are individual, nonprofit organisations.
C)   are profit-making organisations.
D)   do not expect a return on their investments.
E)   make loans to small businesses.

Question 15

Small businesses are typically managed by

Accepted Answer

A)   relatives.
B)   professional managers.
C)   friends.
D)   the people who start and own them.
E)   a board of directors.

Question 16

What is a common mistake that small-business owners make when their businesses begin growing?

Accepted Answer

A)   They sell more goods and services.
B)   They put too much money in advertising.
C)   They move beyond their local area.
D)   They overexpand without proper planning.
E)   They invest too much of their own money.

Question 17

Small firms have traditionally added more than their proportional share of new jobs to the economy.

Accepted Answer

A) True 
 B)False

Question 18

Small businesses have traditionally added ____ new jobs to the economy.

Accepted Answer

A)   more than their proportional share of
B)   less than their proportional share of
C)   very few
D)   the highest paying
E)   the vast majority of

Question 19

All of the following are advantages to the franchisor except

Accepted Answer

A)   fast and selective distribution of products.
B)   no involvement in national advertising campaigns.
C)   assurance of how the outlets will be maintained and operated.
D)   gains from the franchisee's high motivation.
E)   a freeing up of capital for expansion of goods and services.

Question 20

University-based groups providing individual counselling and practical training to owners of small businesses are known as

Accepted Answer

A)   the Small Business Administration.
B)   small-business development centres.
C)   small-business institutes.
D)   special task forces.
E)   none of the above. B

Exam 5: Small Business, Entrepreneurship, and Franchises

John and Ruby Couch just opened a computer store in a small community.Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience-that is, marketing, finance, and personnel experience-in the computer-store business because

Correct Answer
verified

An investor who is considering investing in Moriah's Burger Bar would not likely want to see her business plan.

Correct Answer
verified

Jamie applies for a small-business loan from the SBA.If he is approved for the loan, where will the money actually come from?

Correct Answer
verified

Correct Answer
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E

Small businesses are generally managed by professional managers.

Correct Answer
verified

Beau works for a small pest-control company that has a total of five employees.From his point of view, the primary disadvantage of a small business is the

Correct Answer
verified

The Hamptons enjoy owning and operating their own restaurant.They enjoy being the masters of their own destinies and closing down the restaurant for one week a year so that they can take a vacation.The Hamptons seem to enjoy which advantage of a small business?

Correct Answer
verified

The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of

Correct Answer
verified

Imagine that you want to open your own small business.You will probably be most concerned with having

Correct Answer
verified

Which of the following is an advantage to the franchisor in a franchise agreement?

Correct Answer
verified

Small businesses are typically managed by people who started and own them.

Correct Answer
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True

To qualify as a small business, an agricultural company's maximum annual receipts must be no more than

Correct Answer
verified

Correct Answer
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Small-business investment companies

Correct Answer
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Small businesses are typically managed by

Correct Answer
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What is a common mistake that small-business owners make when their businesses begin growing?

Correct Answer
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Small firms have traditionally added more than their proportional share of new jobs to the economy.

Correct Answer
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Small businesses have traditionally added ____ new jobs to the economy.

Correct Answer
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All of the following are advantages to the franchisor except

Correct Answer
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University-based groups providing individual counselling and practical training to owners of small businesses are known as

Correct Answer
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B

Exam 5: Small Business, Entrepreneurship, and Franchises

John and Ruby Couch just opened a computer store in a small community.Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience-that is, marketing, finance, and personnel experience-in the computer-store business because

Correct AnswerverifiedShow Answer

An investor who is considering investing in Moriah's Burger Bar would not likely want to see her business plan.

Correct AnswerverifiedShow Answer

Jamie applies for a small-business loan from the SBA.If he is approved for the loan, where will the money actually come from?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedE

Small businesses are generally managed by professional managers.

Correct AnswerverifiedShow Answer

Beau works for a small pest-control company that has a total of five employees.From his point of view, the primary disadvantage of a small business is the

Correct AnswerverifiedShow Answer

The Hamptons enjoy owning and operating their own restaurant.They enjoy being the masters of their own destinies and closing down the restaurant for one week a year so that they can take a vacation.The Hamptons seem to enjoy which advantage of a small business?

Correct AnswerverifiedShow Answer

The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of

Correct AnswerverifiedShow Answer

Imagine that you want to open your own small business.You will probably be most concerned with having

Correct AnswerverifiedShow Answer

Which of the following is an advantage to the franchisor in a franchise agreement?

Correct AnswerverifiedShow Answer

Small businesses are typically managed by people who started and own them.

Correct AnswerverifiedTrue

To qualify as a small business, an agricultural company's maximum annual receipts must be no more than

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Small-business investment companies

Correct AnswerverifiedShow Answer

Small businesses are typically managed by

Correct AnswerverifiedShow Answer

What is a common mistake that small-business owners make when their businesses begin growing?

Correct AnswerverifiedShow Answer

Small firms have traditionally added more than their proportional share of new jobs to the economy.

Correct AnswerverifiedShow Answer

Small businesses have traditionally added ____ new jobs to the economy.

Correct AnswerverifiedShow Answer

All of the following are advantages to the franchisor except

Correct AnswerverifiedShow Answer

University-based groups providing individual counselling and practical training to owners of small businesses are known as

Correct AnswerverifiedB

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E

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True

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B