STS 2830: QUIZ 2

To avoid having the diversity of values, goals, and motivators from becoming the source of such intrafamily strife, you and the other family business members should respect one another's differences by all of the following ways EXCEPT

assuming that the leadership of the business must come from within the family.

If Elizabeth starts to take days off from work to staff the kiosk at the flea market, she may be facing

conflict of interests.

Changes in competitors, sales and profits in an industry over time is called

industry dynamics.

An overall strategic approach in which a firm seeks to do something that is very different from that of what others in the industry are doing is called a(n)

innovative strategy.

Value benefits can include all of the following EXCEPT

learning.

A(n) _____ is the business term for the population of customers for your products or services.

market

Financial statements, in performing due diligence, should include all of the following EXCEPT a(n)

mission statement analysis.

The single greatest hurdle to a successful start-up is

obtaining and maintaining sufficient cash.

Contracting with people or companies outside your business to do work for your business refers to

outsourcing.

A product or service that is kept as a trade secret or is protected legally using patents, trademarks, copyright, or service mark is called a

proprietary technology.

A listed, live connection to a different Web site, which in turn displays a similar link to the first Web site is a(n)

reciprocal link.

Which of the following is NOT an advantage of home businesses?

Always working "on the road" thereby enhancing productivity.

_____ refers to something the business owns that has economic value or is expected to have economic value in the future.

Asset

_____ represents a business plan concern of joint venture partners.

Intellectual property protection

Which of the following represent the five stages of industry life cycle?

Introduction, growth, maturity, decline, and death.

Which of the following does NOT hold true of part-time self-employment?

It is a minor portion of all current entrepreneurship.

Which of the following financial statements is NOT expected in the business plan?

SEC filing statement

Identify the two market decisions that Amy and her friends need to make.

Scale and scope

Based on what you have learned from this class, which of the following should Tavanna NOT do to increase her chance of start-up success?

Starting her business without any other founders to avoid conflict

An opportunity that makes it possible for a new business to gain a foothold

entry wedge.

A one- to two-page overview of the business, its business model, market, expectations, and immediate goals represents a(n)

executive summary.

All of the following are disadvantages of home retailing EXCEPT

high cost of getting started.

Most small businesses are more _____ than _____.

imitative; innovative

Using the degree of similarity, Amy's concept of laundromat with a workout space can be described as

incremental innovation.

A research process that provides the entrepreneur with key information about the industry, such as its current situation and trends is called

industry analysis.

The tool appropriate for the third step of the small business strategy process to study the dynamics and trends of your industry is the

industry analysis.

All of the following are situations in which it might make better sense to undertake a part-time business EXCEPT

when there is enough time and resources to get the entire business going.

Which of the following is a disadvantage of a start-up?

Absence of initial name recognition

If Connie gets her family and friends involved as investors, which of the following would be their concern or interest?

Amounts and schedules for returns

Identify the correct statement about RSS feeds.

An RSS feed sends whatever Web material you specify to subscribers to that feed.

_____ are rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristic of the business.

Heuristics

In which way will working with a partner reduce the risk of a start-up?

Partners may provide capital, equipment, or advice.

What is the goal of appendixes?

To provide supporting information that helps detail the key selling points of your plan.

Delegation does NOT make sense in which of the following situations?

When trust is low and employees lack skills.

Tavanna brought with her a franchise business packet. She likes the idea but is unsure what might be its disadvantage?

You give up control of marketing and operations.

What is the greatest problem that home-based entrepreneurs face?

Zoning challenges

All of the following are major concerns of moonlighting EXCEPT

bootstrapping.

A _____ is an organization that provides financial, technical, and managerial help to start-up businesses.

business incubator

In SWOT, strengths are

characteristics of the business that give it an advantage over others in the industry.

The second step of the small business strategy planning process is considering with _____

customers; benefits.

All of the following are major problems with using book value EXCEPT

depreciation is an arbitrary, but nonsystematic, method of transferring asset value to expense.

A type of generic strategy aimed at clarifying how one product is unlike another in a mass market refers to _____ strategy.

differentiation

Nowadays, the conventional wisdom is that if you are serious about starting a business, you ought to start a business full time and prepare for it by

doing a business plan.

Purchases of existing businesses may occur through _____ in which the business is bought over a period of time with money earned from the business.

earn-outs

All of the following relate to "stand retail" EXCEPT

they need to be built in places where there is less traffic.

All of the following concern taglines EXCEPT

they talk in terms of what will make a difference for the customer or the industry

The market refers to the

total population of people or firms to whom you plan to sell.

Permission from a government organization to act differently than the laws state is known as

variance.

There are two circumstances under which creating a business plan is absolutely necessary: (1) _____ and (2) _____.

when outsiders expect it; for internal understanding

Which of the following would you offer Tavanna as an advantage for starting a new business?

Clean slate

Identify the correct statement about the 5-M Model.

Mission statements give the firm's major business goal, which can be stated quantitatively or qualitatively, but always with a time period.

Which of the following is NOT a business plan concern of bankers?

Monitoring compliance

Which are the two major classification systems that code industries?

NAICS and SIC

Identify the statement that is not essential for an agreement to constitute a franchise.

The agreement does not require the franchisee to pay a fee for the right to enter into the business.

Scenario: Healthy Wash Following the health trend, Amy Amorouso and her two friends have decided to open a laundromat with a workout facility. The concept of each of these exists separately and also there are laundromats with bars or game rooms that already exist. This would be a different variation. The main focus will be the laundromat with a small space allowed for a workout area, with a few machines to test the idea. The first thing that Amy and her friends need to do to pursue their strategy is to perform

a SWOT analysis.

A good marketing strategy focuses on all of the following ideas EXCEPT

harvesting the business plan.

Scenario: Tavanna Tucker Having owned several part-time businesses all her life, Tavanna, at 45, is considering a full-time business ownership. She is very confused about what approach to take in her business pursuit. She has come to you for advice, so now it is your turn in the "hot seat." Given that Tavanna has no inheritance possibility, all of the following are other options you could offer her for full-time business EXCEPT

consignment business.

Cost benefits can come from all of the following EXCEPT

credit.

Full-time approaches include all of the following EXCEPT

stand retailing.

Scenario: "Light a Candle" Working as an accountant in the local government agency, Elizabeth has always had a liking for candles. She collected thousands of candles over the years - different shapes, sizes, occasions, and colors. After talking with a few co-workers, Elizabeth decided to get a kiosk at the flea market for four weeks before Christmas to sell her candles with her business name: "Light a Candle." "Light a Candle" can be described as

stand retailing.

All of the following are challenges of being a part-time entrepreneur EXCEPT

the ability to make money to sustain the business.

All of the following are advantages of a start-up EXCEPT

the access to revolving credit line.

When a small business start-up secures outside investment, one thing it accomplishes is that

the business is critically examined by outsiders.

The ratio of the value of a firm to its annual earnings is called

the earnings multiple.

The two key groups outside your business with whom you must deal with as part-time business owners are

the government and customers.

The key device for managing time for part-time business individuals is

the to-do list.

The length of an executive summary should be

250-500 words.

The classic business plan contains _____ pages that include financials and appendixes.

40

Identify the correct statement about B2B.

B2B e-commerce is larger than B2C e-commerce.

Scenario: Connie's Corner Café Having done the culinary classes at the local college, Connie has decided to explore the idea of opening her own business, "Connie's Corner Café". She has found the ideal location next to the college. However, it appears that Connie will have to get some outside investors or bankers involved for the financial backing to get this venture off the ground. When she talked to her local bank manager, Mr. Johnson, he immediately asked for Connie's business plan. Connie knew she was in trouble because she didn't even know what a business plan looked like. Which of the following would represent Mr. Johnson's interest in Connie's business plan?

Cash flow and cash cycle

Which of the following refers to the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market?

Competitive advantage

Identify the statement that is not a part of the steps which make up the process of due diligence.

Developing a brief business plan for the acquisition.

If Tavanna were to buy an existing business, which of the following disadvantages should you point out?

Difficulty in determining the worth of the business.

_____ analysis is based on the concept that the longer you have to wait to receive money, the less valuable it is right now.

Discounted cash flow

Which of the following statements about a business plan is false?

Estimates suggest that a business plan may take anywhere from 10 to 20 hours or more if you are new to business.

Which of the following is a disadvantage of purchasing an existing business?

Existing managers and employees resisting change.

When performing a SWOT analysis, where Amy's business threats meet her business weaknesses, what should her strategy option be?

Flee

Which of the following refers to funds left over after deducting the cost of goods sold?

Gross profit

Which of the following represents a business plan concern of silent partners/angel investors?

Growth rate

What types of customers are likely to generate more potential customers than any other type?

Passionate customers

Which of the following is an advantage of buying an existing business?

Purchasing a business often requires less cash outlay than for creating a start-up.

Which of the following refers to the part of a business that is focused on creating new products or services and preparing new technologies, ideas, products or services for the firm's market?

R&D

. _____ refers to information provided to the government concerning the existence of, name of, nature of, and contact information for your business.

Registration

_____ refers to the size of the market whereas _____ refers to its geographic range.

Scale; scope

Which of the following gives the basic overview of a firm and a detailed look at the financials?

Screening plan

Which of the following is NOT a path to full-time business ownership?

Stand retailing

_____ is the idea and actions that explain how a firm will make its profits.

Strategy

Which of the following statements about asset valuation methods is false?

The application of asset valuation methods to business valuation is similar to having an annuity.

Which of the following statements about the key considerations for part-time small business start-ups is false?

The more time and energy you spend preparing for a small-scale part-time business, the shorter it takes to make a profit.

The specific concept that leads to a start-up business usually comes from the _____ of the person starting the business.

experience

A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a

franchise.

If Elizabeth wants to have a full-time sale with only part-time involvement, she should consider

home retailing.

All of the following are key things an influential person looks for in your business plan presentation EXCEPT

how many others are already working with you?

An Internet site designed to introduce and explain a business to others is known as a(n)

informational Web site.

The fourth step of the small business strategy planning process

involves determining the best strategic direction and strategy for the firm.

The first step of the small business strategy planning process

involves reviewing and confirming the prestrategy decisions that define your firm and your goal for it.

In _____, executive volunteers contribute their time and energy in assisting start-up and struggling small businesses as a public service.

mentoring programs

The amount of money left after operating expenses are deducted for the business refers to

net profit.

A(n) _____ credit is a credit agreement that allows the borrower to pay all or part of the balance at any time; as the loan balance is paid off, it becomes available to be borrowed again.

revolving

A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry is the

shake-out.