Intro to Business- Chapter 5

Josue owns a McDonald's franchise that is having some troubles. Where is Josue most likely to go for advice and guidance?

a. the SBA b. the franchisor c. restaurant consultants d. SCORE B

An individual's desire to create a new business is referred to as

a. the desire for ownership b. the entrepreneurial spirit c. self-determination d. self-evaluation B

A franchisor supplies all of the following except

a. the name of the shop b. the methods of doing businesses c. any necessary training d. land to place the business on B

Fatima's cleaning business has several customers but is not dominant in its field. This is an example of a(n) _____ business.

a. unsuccessful b. manufacturing c. small d. entrepreneurship C

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. venture capitalist agreement b. franchise agreement c. joint venture d. small-business development center B

A ____ purchases products in quantity from manufacturers and then resells them to retailers.

a. wholesaler b. distribution hub c. importer d. exporter A

T or F? Few Americans take advantage of their freedom to start a business.

False

T or F? Franchising is limited only to fast foods.

False

T or F? Small businesses are generally managed by professional managers.

False

T or F? Small businesses operate only in the service industry, not in manufacturing.

False

T or F? The purchaser of a franchise is called the franchisor.

False

T or F? Because of small-business competition, large companies must become more efficient and responsive to consumers' needs.

True

T or F? SCORE is a group of retired businesspeople who volunteer their services to small business through the SBA.

True

T or F? Small business is defined as one independently owned, operated for profit, and not dominant in its field.

True

T or F? Statistically, one can expect about 50% of new business to fail within 5 years of their founding.

True

T or F? The main reasons small businesses fail are poor management skills on the part of owners, inadequate capital, and poor planning.

True

Approximately how many businesses are there in the U.S.?

a. 27 million b. 900,000 c. 1 billion d. 11 million A

What organization that provides low-cost courses and workshops would welcome management professors with an interest in small companies?

a. SBA b. FDA c. FDIC d. SCORE D

The disadvantages of small businesses include all of the following except

a. a high risk of failure b. no opportunity to support your family c. limited ability to raise capital d. limited potential for growth B

Imagine that you want to open your own small business. You will probably be most concerned with having

a. a lot of inventory in the warehouse on opening day b. the best Madison Avenue ad agency money can buy c. a really good lawyer and an even better accountant d. a good source of capital and good management skills D

You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt. This is an example of a

a. co-branded establishment b. small business c. dual-branded franchise d. franchise C

Businesses are generally placed into three broad categories: service industries, production industries, and ____ industries.

a. distribution b. financial c. manufacturing d. transportation A

Which statement best describes the general success rate for franchises?

a. franchises are slightly more successful overall than other types of businesses. b. franchises, like other small businesses, have a very high rate of failure c. franchises have about a 50% chance of being successful d. franchises have a very high success rate compared to other small businesses D

Joel decides to purchase and operate a Subway restaurant. Joel is the

a. franchisor b. licensor c. franchisee d. franchise C

The SBA makes a special effort to

a. hand-deliver their publications b. assist minorities wanting to start small businesses or expand existing ones. c. send SCORE program executives to high schools d. raise money for small businesses B

All of the following are disadvantages to the franchisee except

a. hard work b. starting a business with limited capital c. continuing royalty fees d. a loss of control B

Large firms generally buy parts and assemblies from smaller firms because

a. it is less expensive than making their own b. they are required to do so by gov. regulations c. doing so creates goodwill d. they can control small businesses this way A

The franchisee supplies

a. labor and capital, and owns and operates the outlet b. a known and advertised business name c. a method of doing business d. the required training for the franchised business A

What is the primary reason that so many new businesses fail?

a. low employee quality for new businesses b. lack of brand-name recognition c. owner does not work hard enough d. mismanagement resulting from lack of business know-how D

What do franchisees typically have to pay to the franchisor?

a. nominal fee for business knowledge b. monthly royalties based on sales c. one-time franchise fee d. one-time franchise fee and monthly royalties based on sales D

A small business is all of the following except

a. operated for profit b. difficult to manage c. independently owned d. dominant in its field D

Which of the following is an advantage to the franchisor in a franchise agreement?

a. opportunity to start a business with limited capital b. fast and selective distribution of products c. chance to participate in national advertising d. access to local advertising materials B

A carefully constructed guide for the person starting a business is a(n)

a. organizational plan b. marketing plan c. articles of business d. business plan D

Approx. what percentage of the jobs in the U.S. do small businesses provide?

a. over 50% b. 10% c. 30% d. 5% A

Which of the following would least likely be started as a small business?

a. restaurant b. landscaping business c. electricity company d. flower shop C

Money that is invested in small and sometimes struggling firms that have the potential to become very successful is called

a. seed money b. venture capital c. franchise funds d. SBA-guaranteed loans B

Marcus wants to operate a business that represents 99.9% of all employers in the U.S. To do this she will operate a

a. small business b. multi-national corporation c. foreign corporation d. conglomerate A

SBA stands for

a. special business agency b. society for business alliances c. small business administration d. small bond administration C

Teenage entrepreneurship is growing especially in the ____ industry.

a. tech b. retail sales c. exporting d. tutoring A

Which of the following is not a reason for starting a small business?

a. willingness to find and accept a challenge b. desire to determine one's own destiny c. desire for a guaranteed financial return d. desire for independence C