ENTR Chapter 7
46. The FDD contains how many categories?
23
71. When is the buyer likely to have power over the seller in the negotiation to purchase a business?
if the seller has already purchased another business
27. Which of the following is an intangible asset?
reputation
30. When buying a business, what is not a factor to consider when investigating the competition?
number of employees
35. What is not a factor when looking at the condition of the inventory?
suppliers
24. A new business faces two great dangers: the possibility that it will not find a market for its goods or services, and ____.
the chance that it will not be able to control its costs
52. Which of the following is not considered by entrepreneurs when examining opportunities for possible ventures?
the cost of replacing an employee
29. After the prospective entrepreneur has gathered all of the necessary information, it is up to ____ to make the final decision on the matter.
the legal advisors
72. When does a business have to increase its sales annually to net as much as it did in the previous year?
when profits are not rising as fast as sales
66. What is the largest source for new business ideas among men and women?
prior job
62. Which is not a start-up expense?
depreciation
34. Business-related reasons for selling do not include which of the following?
Changes in the product supply chain.
36. An additional consideration to keep in mind when negotiating to purchase an existing business includes requesting that the seller retain __________ in the firm.
a minority interest
50. Starting a business by adapting something already on the market is called __________.
a new-old approach
55. The extra value a business can command in a sale is known as
goodwill.
48. Which of the following costs add to the cost of franchising pertaining to principal and interest payments?
debt services
42. The advantages of franchising does not include
franchise fees.
26. Which of the following is not a key question a prospective buyer needs to ask in buying a business?
What is the owner's personal net worth?
56. Competitor factors in a buying decision do not include
age of the competition's owners.
54. Business-related reasons for selling may include all of the following except
changes in location.
38. The individual who buys the franchise is the
franchisee.
63. Which is not a key question to ask when buying a business?
Is the building heated with gas or electricity?
47. When should a potential franchisee receive the FDD (Franchise Disclosure Document)?
at least ten days before signing a contract or paying any money
65. Which of the following is not currently cited as a trend creating business opportunities?
breakfast cereals
32. A franchise is any arrangement where the owner has licensed others to sell goods or services by which of the following?
trademark
39. A franchise system can be used for handling
inventory.
23. A(n) ____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.
new-new
64. The _____ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.
new-new
45. Evaluating franchise opportunities include finding out more about all of the following except
the franchise location.
70. Who must negotiate a final deal to purchase a business?
the potential buyer
44. All of the following should be examined when evaluating the selection of venture except
employees.
58. The franchisor's responsibility does not include providing
business relationship.
61. The final decision to purchase a franchise should be up to
you.
33. An agreement not to compete is also known as
a legal restraint of trade.
53. When this asset is purchased, the buyer should be sure to deduct those that they are deemed uncollectible.
accounts receivable
69. An analysis of the competition should look for ______.
unscrupulous practices
41. The franchisee's responsibilities does not include
designing the product specifics.
37. A ____ is a system of distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions.
franchise
57. The individual who arranges for a dealer to handle a specific product or service under certain mutually agreed upon conditions is known as the _____.
franchisor
25. "Piggybacking" one's way into a new business involves using a ____approach
new-old
67. What is not considered an emerging Internet opportunity?
niche consumables
68. What is an often overlooked asset when acquiring a new business?
records
43. The person who sells the franchise is usually required to do all of the following except:
pay a fee.
28. What is not an advantage to buying a franchise business?
structured fees
60. Which of the following costs do not add to the cost of franchising?
prepaid utility bills
31. Which of the following is a question that should not be sidestepped when buying a business?
Are there hidden problems that exist in the operation?
40. The person who gets the franchise is usually required to do all of the following except:
design a logo for the unit.
49. Coming up with a unique good or service is a _____ approach, while adapting something that is currently on the market or extending the offering to an area where it is not presently available is a(n) _____ approach.
new-new, new-old
51. When buying a small business you need to know all of the following items except
the owner's family stability and relationships.
59. Which of the following is not a disadvantage of a major franchise?
track record of the franchisor