1201 chapter 5

What is meant by dual-branded franchises?

Two franchisors offer their products together

According to the authors, franchises may become unsuccessful because the franchisor

expanded too rapidly

A business plan is essential for starting a new business because it

is a guide for the person starting a business

Small businesses enjoy several unique benefits that larger firms may not have such as

the ability to adapt to change and simplified record keeping

Every business must keep records of sales, profits and losses, fixed assets, contacts, tax returns, customers, and a variety of other information that affects the growth and operability of the business. Which of the following is true about small business?

Many small firms need only a simple set of records.

The growth of women and minorities in franchising is attributable to which of the following activities?

Special outreach programs designed to encourage franchisee diversity

While the ________________ owns the business, the ______________ controls it

franchisee and franchisor

Which of the following is a definition of "franchise"?

A franchise is a license to operate an individually owned business as if it were part of a chain of outlets or stores.

Statistics show that most small business failures are related to

poor management

Having a business plan causes a new business owner to think through all of the aspects of business ownership, costs, capital needed for start-up, and can be used to review company goals and benchmark when they are met. Which of the following is true about the company and industry portion of the business plan?

This section of the business plan gives the background of the company, explains the legal business form it will take, provides information about the products or services to be offered, reviews potential customers, current competitors, and the business's future

_______________ businesses are important to the U.S. economy because, among other things, they employ about half of all private sector employees, pay 42 percent of total U.S. private payroll, and hire 37 percent of high-tech workers (scientists, engineers, computer programmers, and others).

small

Sears, Roebuck & Co., and General Motors rely heavily on ___________________ to provide merchandise, parts, supplies, and other goods and services. Companies like these buy parts and assemblies for these businesses because it is less expensive than manufacturing them in their own factories.

small business firms

Which of the following is not a management resource provided by the Small Business Administration?

Free assistance in closing failed small businesses

What percentage of home-based businesses have no employees?

over 90%

Studies show that the incidence of innovation among ______________ -business workers is significantly higher than among workers in ______________ businesses.

small and large

A franchise arrangement includes a franchisor and a franchisee with the franchisor________________ to the franchisee.

granting a franchise

Several factors contribute to the entrepreneurial spirit in the United States, but the most important is the personal characteristics of the individuals who start businesses. Studies have shown that personal factors in small-business success include family background, willingness to accept a challenge,

and a desire to determine one's own destiny

The Small Business Administration (SBA) defines a small business as "one which is independently owned and operated for profit and is not dominant in its field." How small must a firm be to not dominate its field?

By the SBA's definition, the factors that determine the size of a business depend on the particular industry it is in.

Franchising agreements fall into three general categories, which of the following is not one of those categories?

A distributor franchises the channels of distribution to franchisees.

Which of the following is an accurate statement about business profitability?

According to the SBA, the most profitable companies in the United States are small firms that have been in business for more than ten years and employ fewer than 20 people

Jeffrey Inc. is a large business that produces off-road vehicle parts. In addition to this market stream, Jeffrey produces auto parts, boat parts, and parts for machinery and equipment. Inventions, LLC is a small business that focuses only on the off-road vehicle market and has created lighter weight, stronger, and more efficient parts for off-road vehicles. Its primary market is off-road racing which it believes will serve the dual purpose of showcasing its product and filling the needs of its customers. Inventions has significantly increased its market share in the off-road vehicle parts market over the years causing Jeffrey to revamp its marketing techniques and reanalyze its customer's needs. Which of the following is true about the relationship of small businesses to large businesses?

Small businesses challenge larger, established firms in many ways, causing them to become more efficient and more responsive to consumer needs.