Chapter 5 Questions

What are a few reliable sources of management advice for small businesses? A. Advisory boards, consultants, and the Small Business Administration (SBA) B. Gurus, online business articles, and government agencies C. Competitors, employees, and college professors D. Wikipedia, family, and business books

Advisory boards, consultants, and the Small Business Administration (SBA)

Roughly how many new "innovations" introduced to the market in a given year are supplied by small business? A. A negligible amount B. 80% C. 50% D. Practically all innovation occurs in small business.

50%

Which statements best describes job creation in relation to small business and large corporations? A. Large corporations create more jobs than small businesses. B. Small business create more jobs than large corporations. C. All modern job creation is happening in the tech industry. D. Business success is the real driver of job creation, in both small and large businesses.

Business success is the real driver of job creation, in both small and large businesses.

Which of the following statements is untrue regarding small business? A. Entrepreneurs are unable to generate high incomes running small businesses. B. Small businesses do not process the sales and/or assets necessary to substantially impact its environment. C. The majority of new business fail within the first few years of being founded. D. Small businesses are owned by one individual or a small group of individuals.

Entrepreneurs are unable to generate high incomes running small businesses.

Which of the following is NOT an advantage of franchising? A. The franchiser may provide business strategy counseling. B. Franchisees experience a great deal of independence in running the business. C. Franchisers have the ability to grow rapidly. D. The franchisee does not have to be responsible for building a business from the ground up.

Franchisees experience a great deal of independence in running the business.

Which of the following statements is true regarding trends in small businesses? A. The number of individuals who leave large corporations to start their own business is declining. B. E-commerce plays only a small part in the success of many small businesses. C. Opportunities for women and minorities in small business continue to increase substantially. D. The failure rate among small businesses is increasing.

Opportunities for women and minorities in small business continue to increase substantially.

Which of the following is NOT a key factor in the success of small business? A. Luck B. Paying business loans back as soon as possible C. Careful analysis of market conditions D. Managerial competence

Paying business loans back as soon as possible

Which industry is home to the most small businesses in terms of a percentage of total companies? A. Manufacturing B. Services C. Transportation D. Wholesaling

Services

Which of the following is true regarding international business? A. Venturing into the international market is relatively void of risks. B. International markets are generally the same as domestic markets and do not present many new opportunities. C. Expanding a small business into another country is easy. D. Small businesses are increasingly able to expand internationally.

Small businesses are increasingly able to expand internationally.

Which of the following is NOT a major business strategy that small businesses can use to strategically position themselves? A. Pay all employees well above the industry average to attract only the best talent. B. Identify a brand new market and take advantage of it accordingly. C. Identify a niche in an established market through distinctive competencies. D. Attain first-mover advantage by exploiting a unique opportunity before the rest of the industry.

Pay all employees well above the industry average to attract only the best talent.

Which source of funding has shown to be most significant and most important for financing a new business? A. Personal resources B. Strategic alliances C. Venture capital loans D. Small-business investment company (SBIC) loans

Personal resources

Which of the following is NOT a common reason for the failure of small business? A. Insufficient capital B. Weak control systems C. Presence of control systems D. Managerial incompetency

Presence of control systems