Quiz 5

Women were 51 percent of the U.S. population, and, according to the SBA, they owned at least ___ percent of all small businesses in 2015. a. 36 percent b. 25 percent c. 50 percent d. 70 percent

a. 36 percent

Tim owns a McDonald's franchise that is having some troubles. Where is Tim most likely to go for advice and guidance? a. The franchisor b. The SBA c. SCORE d. Restaurant consultants e. Chamber of Commerce

a. The franchisor

A carefully constructed guide for the person starting a business is a(n) a. business plan. b. marketing plan. c. organizational plan. d. articles of business. e. business budget.

a. business plan.

According to the SBA 2013 data, women-owned businesses are ____ and their risk of failure is ___ average. a. financially sound and credit-worthy; lower than b. not financially sound or credit-worthy; higher than c. equal to male-owned businesses in credit-worthiness; about equal to d. poorly run; greater than

a. financially sound and credit-worthy; lower than

Many small firms seek to establish a particular niche in the market, realizing that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies. When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognize and account for their influence on the market. In this way, small businesses are primarily a. fostering competition. b. providing technical innovation. c. creating jobs. d. satisfying the needs of other businesses. e. avoiding competition.

a. fostering competition.

Michael Tucker operates Tucker Farms in northern Illinois. Last year, his annual receipts were just under $750,000. According to the Small Business Administration, Tucker Farms is a a. small business. b. medium-sized business. c. large business. d. franchise. e. joint venture.

a. small business.

All of the following are franchise establishments except a. McDonald's. b. Walmart. c. Holiday Inn. d. Avis. e. Dairy Queen.

b. Walmart.

The industry concerned with the movement of goods from producer to consumer is a. service. b. distribution. c. production. d. agriculture. e. wholesaling.

b. distribution.

Megan always knew she wanted to start her own business. She was very passionate and wanted to create something new. Megan's primary motivation for starting her own business is a. her need for independence. b. her entrepreneurial spirit. c. her desire to determine her own destiny. d. the lack of good jobs in other companies. e. her background with her family.

b. her entrepreneurial spirit.

Production industries make up approximately what percentage of all small businesses? a. 5 b. 10 c. 19 d. 31 e. 41

c. 19

Sarah owns a 7-Eleven franchise. What is the primary disadvantage of owning a franchise for Sarah? a. She has to pay royalties to the franchisor. b. She cannot use her name as the restaurant name. c. The franchisor still retains a great deal of control. d. Sarah is not allowed to hire her own employees. e. Sarah may not find ways to improve operations.

c. The franchisor still retains a great deal fo control.

The following statement answers which major question that a business plan should address? "This business will serve over 200 customers by the end of the year and employ seven full-time employees." a. How much will the new business cost? b. Why is this new business a good idea? c. What are the goals for the business? d. What is the nature and mission of the business? e. How often will the business advertise?

c. What are the goals for the business?

Small-business investment companies a. are an extension of the SBA. b. are individual, nonprofit organizations. c. are profit-making organizations. d. do not expect a return on their investments. e. make loans to small businesses.

c. are profit-making organizations.

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 a. joint venture. b. small-business development center. c. franchise agreement. d. venture capitalist agreement. e. business contraction.

c. franchise agreement.

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 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.

c. limited potential for him to advance.

The disadvantages of small businesses include all of the following except a. limited potential for growth. b. a high risk of failure. c. no opportunity to support your family. d. limited ability to raise capital. e. limited advancement opportunities for employees.

c. no opportunity to support your family.

Ronald is the director of a university-based group that provides individual counseling, specialized training, and research data to owners of small businesses. Ronald's group is called a a. small-business institute. b. university small-business administration. c. small-business development center. d. small-business improvement coalition. e. center for small businesses.

c. small business development center.

Your friend has just been awarded a franchise in a particular industry. He explains that his franchisor has licensed him to sell and distribute a product to retailers. Knowing that this type of franchise arrangement is most common in one particular industry, you suspect that your friend has obtained a franchise in the ____ industry. a. gasoline b. automobile sales c. soft-drink d. fast-food e. furniture

c. soft-drink

To qualify as a small business, a retailing establishment may not exceed annual sales of a. $1.2 million to $4 million. b. $2.6 million to $5 million. c. $3 million to $6 million. d. $7.5 million. e. $12.5 million.

d. $7.5 million.

Which statement best describes the general success rate for franchises? 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.

d. Franchises have a very high success rate compared to other small businesses.

Which of the following is not a franchise establishment? a. Holiday Inn b. AAMCO Transmissions c. Avis d. JCPenney e. KFC

d. JCPenney

What organization created by Congress in 1953 assists, counsels, and protects the interests of small businesses? a. SCORE b. FTC c. SBIC d. SBA e. SBDC

d. SBA

Nathan's business constructs storage sheds for new housing developments as requested by the builders. Nathan's business would best be classified as a a. service business. b. retailer. c. distribution business. d. production business. e. wholesaler.

d. production business.

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 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.

e. about two out of three small firms close within five years of their founding