Module 3 Quiz

Which of the following is among the rewards of being a small business owner? a. Lifestyle freedom b. Freedom from fiscal responsibility c. Freedom from job-related stress d. Free time

a. Lifestyle freedom

Which of the following is an advantage to starting a business? a. Opportunity to gain an understanding of all aspects of a business b. Lower stress level c. Financial security d. Avoidance of unpleasant work tasks

a. Opportunity to gain an understanding of all aspects of a business

A franchise business is appealing because franchisers _____. a. provide a proven business model b. will supply temporary managerial help c. all of these d. will buy your excess inventory

a. provide a proven business model

About 80 percent of small businesses in the U.S. are concentrated in the _____ sector. a. service-producing b. professional c. retail d. goods-producing

a. service-producing

Which of the following is an advantage of buying an existing business? a. You have access to current cash flow. b. You can identify suppliers. c. You can identify competitors. d. You will inherit employees.

b. You can identify suppliers.

Brothers Ronnie and Jacob are both in college; Ronnie is a senior and Jacob a sophomore. They're both majoring in business administration and want to open a small business a few years after graduation. They understand that it's important to gain more management experience and build good credit ratings. Ronnie wants more security in his work and reasonable hours. He would be satisfied working with an older partner until he "learns the ropes." More than Jacob, he'd prefer a business that's been established for a few years. Although he likes a certain degree of independence, he's willing to follow directions and take advice. Jacob, on the other hand, wants more freedom to make his own choices and to succeed or fail on his own merits. He's quite creative and likes to set his own rules. If you were a business advisor, what would you probably recommend for Ronnie? a. Start a non-profit business. b. Buy an existing business. c. Buy a franchise. d. Start a business from scratch.

c. Buy a franchise.

If you want to start a new business, which of the following enterprises would be the best choice? a. Aluminum processor b. Steel refinery c. Car dealership d. Automobile manufacturer

c. Car dealership

To succeed in a business, a new owner must understand _____. a. the basics of business management b. the essentials of time management c. all of these d. the principles of cash flow

c. all of these

The key to developing a _____ is filling an unmet need. a. mission statement b. marketing niche c. business idea d. franchise opportunity

c. business idea

Many small firms provide _____ services to large firms—that is, they hire themselves out to help with special projects or to handle certain business functions. a. franchising b. supplemental c. outsourcing d. entrepreneurial

c. outsourcing

The question "What is the outlook for the industry?" is taken up in the _____ section of the business plan. a. "Competitive Overview" b. "Description of Proposed Business" c. "Mission Statement" d. "Industry Analysis"

d. "Industry Analysis"

_____ tend to offer environments that appeal to individuals with the talent to invent new products or improve the way things are being done. a. Free markets b. Family-owned businesses c. Sole proprietorships d. Small businesses

d. Small businesses

The Small Business Administration defines a small business as one that is _____. a. has no more than 100 employees b. either a for-profit or not-for-profit organization c. owned and operated by a multinational company d. not dominant in its field

d. not dominant in its field