MANA3335 Practice Test Ch. 5

Approximately what percent of U.S. workers are employed by companies that have fewer than 20 people?

*23.5 percent

Approximately which percentage of businesses in the United States are owned by women?

*29 percent

Reflecting a recent trend in small-business start-ups, the number of African American-owned businesses has increased by approximately what percent since 2007?

*35 percent

Most experts recommend that a new business should have enough capital on hand to operate for at least how long without earning a profit?

*6 months

Yui would like some advice about potentially starting a small business. Where could she go for free advice from retired executives who understand her industry?

*A SCORE counselor

Which question should be answered by a business plan?

*What are the entrepreneur's goals and objectives?

At what point should an entrepreneur ask the questions, "who are my customers, and where are they?"

*When seeking an opening in the market for a start-up

Woojin has been thinking about starting his own firm, but he is uncertain about the time and other resources he will need to devote to the process. What should be Woojin's first step in launching a new start-up?

*Assess his commitment to becoming a business owner.

Mica was employed by the regional hospital system and decided to start her own business in the medical support field. She plans to make use of her extensive experience to succeed at this small-business start-up. Which type of entrepreneurial trend does this represent?

*Crossover from big business

Which of the following is a recent trend in small-business start-ups?

*Decline in the failure rate

What can be described as the process of planning, organizing, operating, and assuming the risk of a new venture?

*Entrepreneurship

What is entrepreneurship?

*Entrepreneurship is the process of planning, organizing, operating, and assuming the risks of a business venture.

What does research suggest about the potential of success for new businesses and entrepreneurship?

*Entrepreneurship yields a high level of business failure.

Which is a contract between an entrepreneur and a parent company that requires the entrepreneur to pay the parent company for the use of its trademarks, products, formulas, and business plans?

*Franchising agreement

Polani owns a small parts distributorship. While she is bigger than her local competitors, she is not big enough to really influence the environment. What can be said about Polani's small parts distributorship?

*It is a small business.

Which of the following are reasons for failure?

*Launching the business in spare time

Kevin started a new lawn care business. He had a lot of experience in this field before starting out on his own, he did his research and knew what services to offer at what prices, and he was willing to put in the time and effort needed to succeed. Despite all this, his business failed. What reason for success is missing from this picture?

*Luck

Which source of management advice often has advisors who specialize in one area, such as start-ups or international business, and provide an objective and trained outlook to problems, but can be quite expensive to use?

*Management consultants

Paramita, a recent college graduate, opened a small sandwich shop just off campus. She had never done this kind of thing before, but she enjoyed cooking and putting together creative combinations. Paramita did her research and knew what services to offer at what prices, and she was willing to put in the time and effort needed to succeed. Despite all this, her business failed. What reason for success is missing from this picture?

*Managerial competence

Lack of effective control systems leads to what problem that causes businesses to fail?

*Managers may be in serious trouble before more visible difficulties alert them.

Which of the following statements about large and small businesses is true?

*Most U.S. workers are employed by small firms.

Why are small businesses important to big businesses?

*Most of the products made by big manufacturers are sold to consumers by small businesses.

Which of the following people is most likely to be an entrepreneur?

*Myrna used her savings to start a computer repair service.

Raphael started a new financial consulting business on the side, with the hopes that it would someday become his full-time work. He had a lot of experience in this field before launching his company. He did his research and knew what services to offer at what prices. Raphael lined up a number of clients and hired workers to service the accounts. In spite of all this, his business failed. What led to this business failure?

*Neglect

Approximately how many of the innovations introduced into the U.S. marketplace each year are supplied by small businesses?

*Over half

Which of the following is the most important source of money for financing a new business?

*Personal resources

In what way can a new start-up use e-commerce to do business?

*Quickly expand a new business easily

Julius owns This'n'That, a shop in which nothing costs more than five dollars. He buys his products from a number of distributors to sell in his store. His customers are primarily people who live or work in the neighborhood. Julius's shop operates in which industry?

*Retail

Tamara is a retired executive who now offers free advice to new small business owners through a program established by the SBA. Tamara is a(n) _____.

*SCORE volunteer

Which business segment is the fastest-growing segment of small-business enterprise, with fewer than 20 employees?

*Service

MollyMaids, a small business that cleans houses, is in which industry group?

*Services

Olesia put up her personal money to start a business and hired a professional manager to run it. What can be said of Olesia?

*She is assuming the risk of the venture.

Ahmed has managed a company for seven years. He employs sixty people and has annual sales in excess of $20 million. The company he works for has no real influence in the market. Which type of business does Ahmed run?

*Small business

Which of the following is true of small businesses' role in the economy?

*Small business is a strong presence in the U.S. economy, as well as in virtually all of the world's mature economies.

Which of the following is true of trends in small businesses?

*Small businesses suffer a higher mortality rate than larger concerns.

Which of the following is true of job creation?

*Small firms eliminate jobs at a faster rate.

Which of the following best defines an entrepreneur?

*Someone who plans, organizes, operates, and assumes the risk of a new business

Andy opened a business called Quality Textiles. He imports linen, silk, and high thread count cotton sheets and distributes them to bedding stores in the Midwest. Quality Textiles is a business in which industry group?

*Wholesale

For a given volume of business, a firm in which industry group would typically need the fewest employees?

*Wholesale

Which type of business buys products from manufacturers or other producers and then sells them to retailers?

*Wholesale

One of the current trends in small business start-ups includes which group starting more new businesses?

*Women

Jacque wants to open a diner in his community, but first he wants to learn more about the market, including the types of customers to expect and the food they might order. What is one of the best ways for Jacque to gain this knowledge?

*Work in a diner before starting his own.

The choice of creating an entrepreneur-friendly environment is good public policy because small businesses _____.

*are an important source of new jobs

Once an entrepreneur has chosen an industry to compete in and determined which distinctive competencies to emphasize, these choices are usually included in a document called a _____.

*business plan

Nila wants to start a new business but wants to draw in customers immediately and take advantage of established working relationships. In terms of her new business, Nila is considering _____.

*buying an existing business

Most successful entrepreneurs _____.

*carefully analyze market conditions

Arayla plans to open a small business and estimates that the new operation will require $800,000 during the first three years. She has $100,000 in personal savings to invest in the new venture. The balance will be borrowed from the Second State Bank. Arayla is in the process of _____.

*financing the business

Sources of advice regarding management include all EXCEPT _____.

*information technology professionals

The most important source of money for people starting up a new business is _____.

*personal resources

Manoj wants to be able to choose lenders, equipment, inventories, locations, and other aspects of his new business. When starting his business, Manoj should _____.

*start from scratch