2EN3 chapters 1-6

. Family and businesses exist for exactly the same reasons

False

34. A business plan for a new venture usually leaves out the operating plan but adds it after a year of experience.

False

38. A penetration pricing strategy is most practical when there is little threat of short-term competition in the market or when start-up costs must be recovered rapidly.

False

A lifestyle business is defined as a business that fits the employees' lifestyles and provides satisfaction to all employees.

False

A product or services plan is a section of the business plan that describes the distribution network to be provided and explains its locations.

False

A serial entrepreneur focuses on a single business to grow it into a multinational enterprise

False

A social entrepreneur specializes in developing business around social media.

False

A variable pricing strategy takes into consideration special market conditions and practices of competitors in arriving at a final product or service price.

False

As of 2011 more than 3 million people were self-employed in Canada.

False

Family feuds make it easy for outsiders to maintain strict neutrality

False

Financial qualifications are the only relevant criterion when a franchisor evaluates potential franchisees.

False

Franchising is typically defined as a marketing system revolving around a two-party legal agreement whereby a franchisor is granted the privilege to conduct business as an individual owner according to the methods and terms specified by the franchisee.

False

If a firm determines that two or more market segments have the potential to be profitable and then develops a unique marketing mix for each segment, it is called an unfocused strategy.

False

In a family business, the family's primary goals are profitability and survival of the business

False

In a family business, the founder's core values must never become part of both the business culture and the family code

False

In a very successful franchise system, becoming a franchisee guarantees success.

False

In stage I of leadership succession, the pre-business stage, the child begins part-time work in the business.

False

Most small businesses have between 150-200 employees.

False

Most successful entrepreneurs rarely need to work hard or be persistent. Events and people always tend to just fall in place for them.

False

Niche marketing guarantees a sustainable competitive advantage.

False

Normalized earnings are earnings adjusted for inflation.

False

Offer and sale of a franchise remain unregulated in Alberta and in Ontario.

False

Once a competitive advantage is achieved, the entrepreneur can focus much less on the external environment to pay more attention to the internal environment.

False

Once a good business plan is written, updates are unnecessary.

False

Once an entrepreneur secures specialists to write the plan such as a marketing expert, accountant, and lawyer, the entrepreneur's involvement is not required.

False

Only Canada and the United States have franchises.

False

Only those entrepreneurial firms that grow large can be called lifestyle businesses.

False

Price lining refers to the systematic determination of the right price for a product or service.

False

Psychographic variables are related to visible characteristics of the market such as age and gender

False

Research shows that the highest percentage of start-ups is in the 25- to 35-year-old age group.

False

Returns from competitive advantage always increase over time.

False

Roger owns a Tim Hortons franchise and a Molly Maid Franchise. This is called multiple-unit ownership

False

Hard-working employees often feel that they deserve hazard pay for working in a firm plagued by an unusual amount of family conflict.

True

Which of the following applies to family councils? a. They function as the organizational and strategic planning arm of a family. b. They listen to nonfamily employee concerns about certain family employees. c. They make all major strategic and tactical decisions for the business. d. They are an informal advisory board for children of founders.

a. They function as the organizational and strategic planning arm of a family.

When should the executive summary in a business plan be written? a. after the other sections are completed b. after setting an appointment to meet with a lender c. before dealing with financing considerations d. before dealing with the marketing section

a. after the other sections are completed

What does the process of family succession begin with? a. determination of whether appropriate talent exists within the family b. the terms of the financial buyout once the business is passed over c. the level of participation of the family members who are retiring d. the period over which the transition to the new family members will occur

a. determination of whether appropriate talent exists within the family

85. What is included in the costs of franchising? a. signage b. labour c. taxes d. depreciation

a. signage

What is one danger in using a business plan software package? a. Profit projections can be unrealistic. b. It is easy to gloss over important aspects of the plan. c. May exclude unique features of the business. d. Plan may look too generic and overlooked by investors.

b. It is easy to gloss over important aspects of the plan.

. A nonfamily employee is concerned about fair treatment compared to the owner's family members. How should the nonfamily employee protect her personal interests? a. She should align herself with the CEO and all other family members that hold management positions. b. She should insist that the manager clarify the extent of opportunities for promotion that are available to her. c. She should seek assurances that she will receive consideration for promotion ahead of family members. d. She should leave the firm and seek employment in a nonfamily business.

b. She should insist that the manager clarify the extent of opportunities for promotion that are available to her.

Which statement best describes a family business? a. The total investment in the business comes from one owner. b. The son works in the business part-time during the school year and full-time during the summer. c. The business is extremely small, with less than $100,000 annual sales revenue. d. The owner of the business treats it as a "cash cow," using its income to pay college tuition for her children

b. The son works in the business part-time during the school year and full-time during the summer.

Why do the founder's values become part of the family organizational culture? a. The founder insists that the values are sound. b. The values work and become accepted by the group. c. The values coincide with modern management theory. d. Family members follow family traditions without excessive analysis.

b. The values work and become accepted by the group.

Scott feels his family business is stagnating since the family members all think alike. He hires a nonfamily member to bring a fresh view and to explore different markets. Which of the following best describes the reason Scott hires a nonfamily member? a. To bridge the gap between generations of family members b. To set new directions for the business c. To deal with change d. To provide new skills and expertise

b. To set new directions for the business

Malcolm has just started the marketing research he and his wife wish to do for their online fishing lure new venture. Specifically, what is Malcolm doing? a. writing survey questions b. defining the information needed c. reviewing fishing and wildlife magazines d. comparing the costs of various research firms

b. defining the information needed

Which environment is narrowly defined and has the combined forces that directly affect a given firm and all of its relevant competitors? a. general b. industry c. market d. global

b. industry

Which of the following is a part of inside-out analysis? a. competitive analysis b. intangible resources c. technological changes d. demographic trends

b. intangible resources

Harveer is starting a business to sell a product she feels will make fastening loads to truck beds more efficient. What is Harveer's new business idea based on? a. new technology idea b. new benefit idea c. new process idea d. new service idea

b. new benefit idea

Donovan runs a candle manufacturing company. The baked goods candles, which look and smell like pies, tarts, and muffins, are a best seller. What would a butter tart candle represent? a. product line b. product item c. product mix d. product strategy

b. product item

Evan wants to make sure consumers don't become confused when reviewing the items he puts out for sale. He decides to remove desk lamps from the display that includes staplers, paperclips, and writing tools. What is Evan concerned with? a. product item consistency b. product mix consistency c. product line consistency d. product group consistency

b. product mix consistency

What should the business plan discussion of the production process include? a. grand opening plans b. quality and control of inventory c. pro forma statements d. marketing issues

b. quality and control of inventory

Malcolm is deciding whether to open a brand-new business or purchase a franchise. Which characteristic of a franchise would influence Malcolm toward a brand-new business? a. financial assistance b. royalty payments c. managerial assistance d. marketing concept

b. royalty payments

Christina has a line of silver jewellery. She feels some earring designs will be attractive for older women, some necklaces would be desired by professional women, and some bracelets would be suitable for both young female and male adults. What variable is Christina considering? a. marketing b. segmentation c. production d. design

b. segmentation

Xiao has an advantage over his peers in his insurance licensing class because his parents can pass on important contacts from their family business. According to Sirmon and Hitt, what is this an example of? a. firm-specific knowledge b. shared social networks c. focus on the long run d. preservation of reputation

b. shared social networks

Brandon is interested in becoming a franchisee. He has meetings with his lawyer and bank manager. He has also hired the services of an accounting firm. What is Brandon preparing to do? a. Check the background of the franchisor. b. Sign the franchise contract. c. Compare franchise opportunities. d. Sign the lease on a franchise location.

b. sign the franchise contract

High Energy, a local supplier of sport drinks, initially sold its product at a premium price of $5 because the company believed consumers would view sport drinks as a prestigious item. The company decided that when start-up costs had been recovered and competition grew, the company would reduce the price to a more reasonable $3. What strategy is High Energy implementing? a. variable pricing b. skimming price c. penetration pricing d. price-lining

b. skimming price

Smaller family sizes made Jim change his used vehicle business to sell fewer minivans and promote more crossovers and sedans. Which trend is this related to? a. economic b. sociocultural c. political legal d. global

b. sociocultural

When did the rapid growth of franchising begin? a. the 1950s b. the 1960s c. the 1970s d. the 1980s

b. the 1960s

Roger wants to develop a reputation for his company so that when people hear its name they think quality, service, and satisfaction. What is Roger concerned with? a. the company's brand b. the company's warranty policy c. the company's product features d. the company's delivery process

b. the company's warranty policy

As the sales of desks increase at a furniture company, the raw material costs increase as well. What kind of cost are material costs? a. fixed costs b. variable costs c. total costs d. marginal costs

b. variable costs

Which component of a SWOT analysis is "lack of management skills or experience"? a. strengths b. weaknesses c. opportunities d. threats

b. weaknesses

A company sold 1,000 truck tires and has total variable costs of $40,000, total fixed costs of $30,000, and sales revenue of $110,000. What is the average cost per tire? a. $30 b. $40 c. $70 d. $110

c. $70

ManMaid, a residential home cleaner, has fixed costs of $5,000 per month. It bills each client $150 for a cleaning service and incurs variable costs of $100. What is the breakeven point for ManMaid? a. 33.33 cleanings per month b. 50 cleanings per month c. 100 cleanings per month d. 150 cleanings per month

c. 100 cleanings per month

Kayla is evaluating new business ideas to determine which have the greatest potential to provide the level of profits needed to enable her to live a lavish lifestyle. Which key start-up question is Kayla addressing? a. What are the different start-up ideas you might consider? b. What are some sources for additional new business ideas? c. How can you identify a genuine opportunity that promises attractive financial rewards? d. What competitive advantage could your business have over its rivals?

c. How can you identify a genuine opportunity that promises attractive financial rewards?

A prospective entrepreneur focuses his presentation to an investor on his invention, enthusiastically pointing out its unique features. What is the most likely question in the venture capitalist's mind? a. How strong is the patent protection? b. How costly will it be to produce the product? c. How do I minimize my risk? d. What management skills does this entrepreneur have?

c. How do I minimize my risk?

Why is the consumer-oriented approach to marketing the preferred philosophy for all types of businesses? a. It reminds employees of the importance of sales and to support the sales staff as much as is needed. b. It addresses the need for sales people to do whatever it takes to close the sale. c. It emphasizes that everything, including production, depends on consumer needs. d. It evaluates how well the company is meeting its sales and profit objectives.

c. It emphasizes that everything, including production, depends on consumer needs

A child is experiencing difficulty getting the parent in a family firm to accept progressive new ideas that would benefit the business. What is the most plausible explanation in a typical family business? a. The child has a major investment in the business. b. The child is tied to the firm emotionally. c. The child is in the pre-business stage. d. The child and parent lack a mutual understanding of their respective roles and goals

c. The child is in the pre-business stage.

What is a business plan? a. a legal document for raising capital to fund the business start-up b. a prospectus identifying the business purpose and uses of financial investment c. a document that sets out the basic idea underlying a business and related start-up considerations d. a memorandum to prospective investors offering better than average returns

c. a document that sets out the basic idea underlying a business and related start-up considerations

What is documented in the marketing plan? a. costs to develop a new product b. insurance coverage for customer liability claims c. a profile of the target customer d. a ranking of graphic artists that can create a new logo

c. a profile of the target customer

What are the two basic stages in evaluating the financial health of a firm? a. an audit of the inventory's value and an evaluation of accounts receivable b. a review of the personal assets of the owner of the business and a business valuation c. a review of financial information and an appraisal of the firm d. a review of profit trends for the past five years and a search of any lawsuits against the business

c. a review of financial information and an appraisal of the firm

. Which idea for a new start-up comes from an accidental discovery? a. a coin collector who learns the value of his collection and decides to sell some at coin fairs b. a salesperson who likes the bamboo chairs he sees while on vacation and opens his own furniture store selling bamboo-style furniture c. a sharpshooter who shoots holes in a pair of her boyfriend's jeans during an argument and then hears him receive compliments on the way they look d. a chef who finds his mother's old recipes and decides to write a cookbook based on them

c. a sharpshooter who shoots holes in a pair of her boyfriend's jeans during an argument and then hears him receive compliments on the way they look

How is niche marketing best described? a. an attempt to compete directly with industry giants b. a domestic marketing strategy c. a strategy focused on a specific target market d. a plan to improve on a product sold to mass markets

c. a strategy focused on a specific target market

Paul became distracted while barbecuing ribs. Although the ribs dried out he found the sauce had a delightful flavour. He added a few spices and now markets this new sauce to grocery stores. What was the source of Paul's new business idea? a. personal experience b. hobby and personal interests c. accidental discovery d. deliberate new business search

c. accidental discovery

Which of the following is least likely to provide assistance in preparing a business plan? a. accounting firm b. incubator organization c. commercial real estate broker d. marketing specialist

c. commercial real estate broker

A new cyber security firm launches a product that large organizations adapt into their system because of its superior protection against attacks from hackers. What exists in this company to cause organizations to purchase its product? a. tactical advantage b. strategic competency c. competitive advantage d. core competencies

c. competitive advantage

Jorge knew it was just a matter of time before competition emerged in the area of his business. What must Jorge do inorder to maintain a competitive advantage? a. focus mainly on the organization's microenvironment b. continually ignore the company's external environment c. continually upgrade the company's organizational capabilities d. focus mainly on the organization's core competencies

c. continually upgrade the company's organizational capabilities

Josephine is creating a description of the ideal shopper for her energy bars based on age, gender, behaviours, and income. What is Josephine creating? a. customer analysis b. market profile c. customer profile d. market analysis

c. customer profile

Brian and Shelley have collected a lot of data about their new energy bars and drinks. They need to assimilate the data into useful information to make decisions. What will help them do this? a. test marketing b. questionnaires c. descriptive statistics d. observational analysis

c. descriptive statistics

Juanita wants to sell the best experience in travel to her clients. She wants them to feel that no other travel company could take care of all their needs as well. For this Juanita builds in a large margin of profit. Which competitive advantage strategy does Juanita use? a. customer service b. cost-based c. differentiation d. premium product

c. differentiation

George is contemplating purchasing franchise. He is reading that the average franchisee reaches sales of $2 million by third year, the franchise has been operating for nine years, and there are 42 franchisees in Eastern Ontario. What is George reading? a. franchise contract b. non-disclosure agreement c. disclosure document d. news article

c. disclosure document

Jodie has often made decisions to forego immediate profits in order to develop relationships that she knows will benefit her children when they take over the family business. According to Sirmon and Hitt, what is this an example of? a. reduced cost of control b. shared social networks c. focus on the long run d. preservation of reputation

c. focus on the long run

In the auto industry, when one dealership offers a promotion such as zero-percent financing the competitors soon offer the same promotion. What pricing strategy is common in this industry? a. variable pricing b. flexible pricing c. follow-the-leader pricing d. price-lining

c. follow-the-leader pricing

Franz is starting a snowboard and ski shop. He will need financing in order to stock the shop with sufficient equipment, clothing, and accessories for opening day. What kind of plan should Franz prepare? a. full marketing plan b. partial business plan c. full business plan d. partial marketing plan

c. full business plan

. Which cause for bankruptcy occurs most frequently? a. lack of competitive advantage b. uncontrolled costs c. inadequate research and development d. poorly developed marketing strategies

c. inadequate research and development

Reggie runs his landscaping company from April to October then closes it so he can travel the world to enjoy his love of skiing. Which entrepreneurial reward does Reggie value most? a. personal fulfillment b. profit c. independence d. risk-taking

c. independence

Carey performed an analysis of his skills. He identified presentation skills as one of his attributes and developed a business to teach others how to present effectively. Which approach did Carey use to identify his business idea? a. looking outside-in b. looking outside-out c. looking inside-out d. looking inside-in

c. looking inside-out

Tranh has identified potential customers who would likely have a desire for his personal fitness program and who also have the disposable income to afford his service. What is another name for this group of potential customers? a. consumer segment b. target market c. market d. consumer market

c. market

Jeremy is reviewing the company's various customer groups, gathering information about current market trends, and developing a sales forecast. What activity is Jeremy engaged in? a. small business marketing b. cash cow c. market analysis d. market strategy

c. market analysis

Jennifer is selling a line of sterling silver jewellery at the college she attends. Jennifer is identifying pieces that she can market most effectively to females in their 20s, females over 30, and males. What is Jennifer doing? a. market differentiation b. market niching c. market segmentation d. market research

c. market segmentation

Penelope is reviewing the features of the kitchen appliance line her company sells and is wondering if she should lower prices, allow free shipping, and then create an advertising blitz. What activity is Penelope engaged in? a. marketing design b. marketing promotions c. marketing mix d. marketing segmentation

c. marketing mix

Pat passed on his insurance business to his son-in-law, Ken. Pat stays in the business only to help guide Ken's decisions until Ken understands the business better. Which role is Pat fulfilling? a. facilitator b. counselor c. mentor d. advisor

c. mentor

Richard left a secure job with the government to start a manufacturing company even though he has a young family to take care. As a successful entrepreneur what level of risk does Richard accept? a. no risk b. mild risk c. moderate risk d. extreme risk

c. moderate risk

Jaclyn, inspired by her children's fondness for animals, developed a business bringing animals to children bedridden with diseases or injuries. What type of business person best describes Jaclyn? a. artisan b. philanthropist c. mompreneur d. opportunistic entrepreneur

c. mompreneur

Kareem is finding it difficult to service his customers properly due to the wide variety tasks required to run his landscaping company. Which challenge is likely most difficult for Kareem? a. communicating with non-English speaking markets b. making decisions about how to invest excess cash balances c. navigating government regulations and paperwork d. collecting payments from customers

c. navigating government regulations and paperwork

Carrie is disgruntled because she was passed over for a promotion given to a younger and less experienced employee who is a family member of the company's owner. What is the promotion of the family member an example of? a. perpetuation b. loyalty c. nepotism d. paternalism

c. nepotism

Which of the following is an intangible organizational resource? a. plants and equipment b. borrowing capacity c. patents and copyrights d. cash reserves

c. patents and copyrights

In the wake of a major competitor going out of business, BBC Transit has dropped prices to grab market share quickly before the remaining competition. What pricing strategy is BBC using? a. follow-the-leader b. skimming c. penetration d. prestige

c. penetration

Colourful Concoctions, a maker of children's crayons, decides to price its boxes of crayons below the long-term market price. The firm agrees to reduce its profit margin from 30 percent to 5 percent in the short term in order to increase market share and discourage other firms from entering the crayon market. What strategy is Colourful Concoctions implementing? a. variable pricing b. skimming price c. penetration pricing d. price-lining

c. penetration pricing

Which strategy involves pricing products or services at a lower than normal, long-range market price in order to gain more rapid market acceptance or to increase existing market share? a. variable pricing b. skimming price c. penetration pricing d. price-lining

c. penetration pricing

What scenarios should sales forecasts cover? a. most likely, least likely, and optimistic b. pessimistic, least likely, and optimistic c. pessimistic, optimistic, and most likely d. least likely, pessimistic, and most likely

c. pessimistic, optimistic, and most likely

After the United States increased the duty on wax candles being sold from Asia into America, Joy focused more on Canada to sell her imported candles. Which trend is this related to? a. economic b. sociocultural c. political legal d. global

c. political legal

Jonah wants to open a hot dog fast food restaurant. He asks people in line at a hamburger restaurant if they would prefer a hot dog if it was available. What kind of research is Jonah conducting? a. print b. media c. primary d. secondary

c. primary

Rachel's company sells furniture for the home and furniture for the office. What would a kitchen table and kitchen chairs be part of? a. product items b. product mix c. product line d. product group

c. product line

Jason is making sure the quality control process is functioning properly to maintain his objective to provide the most reliable hand tools to his clients. What is Jason concerned with? a. product vision b. product mission c. product strategy d. product analysis

c. product strategy

Which advantage is associated with being a franchisor? a. reduction in control b. sharing of profits c. reduction in capital requirements d. burden of providing operational support

c. reduction in capital requirements

Anthony converts his operation of seven night clubs into a franchise business to free up time for more personal interests. What would one drawback be for Anthony in this new arrangement? a. shared advertising b. accounting and legal services c. shared profits d. royalty fees

c. shared profits

By selecting a particular market niche, an entrepreneur decides on the basic direction of the firm—a choice that affects the very nature of the business. What kind of decision is this? a. market-based b. tactical c. strategic d. focus-based

c. strategic

Which trend is "cloud" computing related to? a. economic b. sociocultural c. technological d. demographic

c. technological

What does the extent of limitations on nonfamily employees depend? a. how fond the owners of the company are of their family members who are active in the business b. the number of nonfamily employees that want management positions c. the level of education of family members vs the level of education on nonfamily employees d. the number of family members in the business and the number of management positions available

c. the level of education of family members vs the level of education on nonfamily employees

Which of Michael Porter's five forces concerns customers having the ability to turn to other products to replace those that the industry offers? a. threat of new competitors b. bargaining power of suppliers c. threat of substitute products d. bargaining power of buyers

c. threat of substitute products

In what age category does research show the highest percentage of business start-ups? a. 18 to 24 b. 25 to 30 c. 31 to 49 d. 50 and over

d. 50 and over

How should an owner protect the interests of both the family and the business in a family business? a. Recognize a basic obligation to supply the family with jobs of some type. b. Refuse to hire family members but, instead, reward them with dividends. c. Simplify management by making all personnel decisions affecting family members. d. Arrange for hiring outsider leadership or supplements to family talent

d. Arrange for hiring outsider leadership or supplements to family talent

Jacqueline wants to start an in-home pet cleaning business. She does not know if pet owners will be interested so needs to conduct market research. Jacqueline has very little start-up capital. What should she do? a. Hire a small research firm to conduct primary research. b. Conduct secondary research herself. c. Hire a small research firm to conduct secondary research. d. Conduct primary research herself.

d. Conduct primary research herself.

Christine knows her idea for a new business will become popular. She plans to continually introduce new products to stay ahead of other businesses that try to sell to her customers? Which key start-up question is Christine addressing? a. What are the different start-up ideas you might consider? b. What are some sources for additional new business ideas? c. How can you identify a genuine opportunity that promises attractive financial rewards? d. What competitive advantage could your business have over its rivals?

d. What competitive advantage could your business have over its rivals?

Carey's mobile home health care business, which delivers products to the elderly, is thriving. What competitive advantage is this an example of? a. price/value b. unique service features c. customer service d. accessibility

d. accessibility

What should an entrepreneur do to provide a hedge against volatile shifts in market demand? a. remove unrelated products from the market mix b. remove related products from the product mix c. add related products to the product mix d. add a new unrelated product to the product mix

d. add a new unrelated product to the product mix

Ken's insurance company continues to increase its profits even during a recent recession that caused several of his competitors to go bankrupt. Which term best describes Ken's company? a. marginal firm b. franchise c. high-potential venture d. attractive small firm

d. attractive small firm

Caruso is creating a document that will describe the products, markets, and operations of a business he wishes to start. What is Caruso creating? a. organization chart b. budget c. sales analysis d. business plan

d. business plan

Which valuation approach is based on the amount and timing of future cash flows? a. market-based b. asset-based c. earnings-based d. cash flow-based

d. cash flow-based

A marketing professor is teaching her class about marketing philosophies by describing successful companies and their philosophies. Which philosophy would these companies most likely have in common? a. production-oriented b. market-oriented c. sales-oriented d. consumer-oriented

d. consumer-oriented

What are the crucial capabilities that distinguish a company competitively and reflects its general focus and personality? a. tactical advantage b. strategic competency c. competitive advantage d. core competencies

d. core competencies

Pat's back problems forced him to change his truck driving career. He reviewed business magazines and business sites and eventually purchased a truck wash business. What was the source of Pat's new business idea? a. personal experience b. hobby and personal interests c. accidental discovery d. deliberate new business search

d. deliberate new business search

With the decline in elementary school student population, Elizabeth created a business to convert excess portable space into private storage. Which trend is this related to? a. economic b. sociocultural c. technological d. demographic

d. demographic

Surjit, a marketing specialist, and Candice, an investment expert, create a company to sell financial planning services to the public. Which term best describes Surjit and Candice? a. corporation b. partnership c. joint venture d. entrepreneurial team

d. entrepreneurial team

SL Inc. will offer a lower price to customers that order online or have the potential to purchase larger volumes. What pricing strategy does SL use? a. variable b. skimming c. penetration d. flexible

d. flexible

Which term includes the privileges conveyed by a franchising agreement? a. franchising rights b. franchise claims c. franchise interests d. franchise contract

d. franchise contract

What is another term for a business plan? a. management plan b. money plan c. contingency plan d. game plan

d. game plan

When China opens its doors to foreign suppliers Katie's engineering firm was able to secure contracts to help build infrastructure in Chinese cities. Which trend is this related to? a. economic b. sociocultural c. political legal d. global

d. global

Janet, feeling the reputation of a business is very strong, pays $2.5 million for the business even though the assets were valued at $2 million. What is the excess amount over the value of the assets called? a. profit b. investment c. risk value d. goodwill

d. goodwill

James is determining the value of a company by researching the selling prices of its assets. Which valuation method is James using? a. modified-book-value approach b. replacement-value approach c. asset-based valuation approach d. liquidation-value approach

d. liquidation-value approach

Which of the following is considered a disadvantage of becoming a franchisee? a. increase in management motivation b. speed of expansion c. reduction of capital requirements d. loss of independence

d. loss of independence

Cheryl is evaluating the market through segmentation, research, and forecasting. What activity is Cheryl engaged in? a. market research b. market planning c. market strategies d. market analysis

d. market analysis

Pierre is meeting with a business broker to examine recent selling prices of businesses similar to the one he is interested in purchasing. What valuation method is Pierre using? a. modified-book-value approach b. asset-based valuation approach c. replacement-value approach d. market-based valuation approach

d. market-based valuation approach

Nicholas is describing the ideal demographic and psychographic characteristics of his target market. Which section of the business plan is Nicholas writing? a. financial plan b. general company description c. executive summary d. marketing plan

d. marketing plan

Antonio has an agreement with a shoe operation in Italy to sell its brand and business model to franchisees in Canada. What term best describes Antonio? a. development franchise b. area developer c. piggyback franchise d. master franchise

d. master franchise

Karen is preparing a business plan for an investor group interested in helping her grow her business. To make the business more attractive to the investors group, what should Karen's plan show that the business will do for them? a. make as much money as possible and help the business owners realize their vision b. minimize taxes and maximize their return on investment c. avoid risk altogether but still earn a high return on their investment d. maximize return on investment while minimizing personal risk

d. maximize return on investment while minimizing personal risk

Understanding his weakness in presentation skills, Dylan joined a Toastmasters program. He now successfully presents his business and products to buyers and his sales continually increase. Which entrepreneurial success quality best describes Dylan? a. commitment and determination b. opportunity obsession c. tolerance for risk, ambiguity, and uncertainty d. motivation to excel

d. motivation to excel

Kyle plans to open a delicatessen in Halifax featuring new desserts that he first tasted during a vacation to Italy. What is Kyle's start-up idea based on? a. new product idea b. new business idea c. new customer idea d. new market idea

d. new market idea

Cleo has requested past financial data and a listing of prospective customers from the seller of a business Cleo is interested in purchasing. Before providing this information the seller has Cleo sign a document to agree the information will remain private. What is this document? a. pre-sale agreement b. background check c. privacy agreement d. non-disclosure agreement

d. non-disclosure agreement

Roslyn makes unique frames for photos and mirrors with real decorative rocks and shells. The frames can become heavy. Where should Roslyn place instructions for mounting and cautionary information? a. as part of the trademark b. within the symbol c. on the packaging d. on a label

d. on a label

Having no business experience at all, Connor is happy he opened a home renovations franchise. What attracted Connor to purchasing a franchise instead of opening the business under his own name? a. proven marketing concept b. training support c. financial assistance d. operating assistance

d. operating assistance

Which of the following best describes the close relationship of business factors and family concerns in a family business? a. separation of domains b. generational gap c. sibling rivalry d. overlap

d. overlap

A new high-end steak house sets its prices very high to appeal to high-income clients that desire top quality cuisine and prestige service. What pricing strategy is this restaurant using? a. skimming b. penetration c. variable d. prestige

d. prestige

Constance allocates 90% of her overall budget to making the company's cyber security software easy to use and bullet-proof against attacks from hackers. Which type of marketing philosophy does Sewell Motors subscribe to? a. consumer-oriented b. market-oriented c. sales-oriented d. production-oriented

d. production-oriented

To appeal the daring nature of teenagers and young adults, Bonnie started promoting her off trail bikes showing riders completing hair-raising jumps. What variable is Bonnie focusing on to make sales? a. benefit b. geographic c. demographic d. psychographic

d. psychographic

Patrick, tired of the politics at the company he works for, leaves to start his own accounting firm. Which term best describes Patrick? a. energizer b. risk taker c. financier d. refugee

d. refugee

George is fearful of a new company he sees at a tradeshow that is selling a similar product that his company currently distributes but at a much better price. Which component of SWOT is causing concern for George? a. strengths b. weaknesses c. opportunities d. threats

d. threats

Entrepreneurs are extreme risk takers.

False

14. One of the benefits of becoming a franchisor is the sharing of profits.

Flase

4. A business plan is a written document that sets out the basic idea underlying a business and related start-up considerations.

True

Cost-based commitment may motivate a person to go "beyond the call of duty" to protect or extend his or her financial interests in the company.

True

Creating a cost advantage potentially gives a firm a competitive advantage.

True

Entrepreneurs can evaluate their own capabilities and then look to new products or services they may be capable of producing.

True

A marketing competitive advantage is an approach that requires differentiation of a firm's product or service along some dimension other than cost.

True

A master franchisor is a firm or individual having a continuing contractual relationship with a franchisor to sell its franchises

True

Total fixed costs are costs that remain constant as the quantity produced or sold varies.

True

Following the completion of the market analysis, the entrepreneur is ready to write the formal marketing plan

True

Preparation of a business plan helps to bridge the gap between an idea and reality.

True

25. Flexible pricing is a marketing approach that offers different prices to reflect differences in customer demand.

True

27. An entrepreneur proceeds with plans to manufacture a new product designed by her firm's top engineers. She should realize that the product, although well engineered, may not be wanted by customers.

True

Transfer of ownership is the second-last step in conveyance of power from parent to child, that of distributing ownership of the family business.

False

With a skimming price strategy, prices for products or services are set lower than normal long-range market prices in order to gain more rapid market acceptance or to increase market share.

False

. CAFE is a national not-for-profit organization dedicated to research, education, and assistance for family businesses.

True

. Entrepreneurs are frequently thought to be individuals who discover market needs and launch new firms to meet those needs.

True

. In a family business, there is a possibility for either conflict or harmony between business goals and family goals.

True

10. Small business managers are often too focused on the present.

True

19. A "vendor take-back" loan exists when the seller loans the buyer the difference between the selling price and the amount of conventional financing available.

True

21. In conducting a comprehensive break-even analysis, a firm must examine both its revenue-cost relationships and its sales forecasts.

True

24. A business plan must contain believable financial projections.

True

29. The combination of product pricing, promotion, and distribution activities is known as the marketing mix.

True

A brand of jalapeno dipping olive oil would be considered a product item in a product mix.

True

A business plan may be prepared for a major expansion of an existing business, as well as for a proposed new business.

True

A family business is a company in which family members are directly involved in the ownership and/or functioning of the business

True

A follow-the-leader strategy is a marketing approach that uses a particular competitor as a model in setting prices

True

A franchise is typically attractive because it offers training, financial assistance, and operating benefits.

True

A franchising strategy whereby a single franchisee owns more than one unit in a given area is typically referred to as a multiple-unit ownership strategy.

True

A good business concept may be destroyed by business plan writing that fails to communicate.

True

A market must have buying units or customers.

True

A restaurant franchise doing business inside a department store is an example of piggyback franchising

True

A segmented market can erode when the focus strategy is imitated

True

A small business can be successful only if an adequate market exists for its product or service.

True

A start-up idea also may emerge from a prospective entrepreneur's deliberate search

True

Any family business is composed of both a family and a business

True

Entrepreneurship involves costs and drawbacks as well as rewards.

True

Existing franchisees are a valuable source of information about franchises.

True

Franchisees typically pay an initial fee upon signing the franchise agreement, and a royalty fee (percentage of sales) thereafter.

True

Franchising lets a business enter many more markets much more quickly than it could by using only its own resources.

True

If a business believes that two or more market segments can be profitable and develops a unique marketing mix for each, it is following a multisegmentation strategy.

True

If a business is to survive, its interests cannot be unduly compromised to satisfy family wishes.

True

In general, it is desirable to include several forecasts covering the three sales scenarios: "most likely," "pessimistic," and "optimistic."

True

In marketing terms, a focus strategy depends on market segmentation.

True

Magazines and other periodicals are excellent sources of start-up ideas

True

Many entrepreneurs value independence because it gives them more flexibility in their personal lives.

True

Market analysis refers to identifying the types of customers to whom you will sell.

True

Market segmentation, marketing research, and sales forecasting are the activities that make up what is commonly called market analysis.

True

Markup pricing is a cost-plus method of pricing that arrives at a markup percentage high enough to cover operating expenses, subsequent price reductions, and desired profit levels.

True

Microbusinesses provide only minimal profits to their owners.

True

Most new ventures are founded in "me, too" strategies differentiating themselves through superior service, higher quality or performance, or lower cost

True

Most successful entrepreneurs are described as being domineering managers.

True

Nonfamily employees in a family business may be caught in the crossfire between feuding family members.

True

Older firms often fail because they fail to adjust to competitive environments.

True

One of the drawbacks of becoming a franchisor is the reduction in control.

True

One reason for buying an existing business is to receive a bargain price below what it would cost to start a new business.

True

Originally, computer manufacturers aimed at the corporate market and practised very little market segmentation

True

Over 98 percent of small businesses have fewer than 100 employees

True

Pricing and credit decisions are vital because they affect both revenue and cash flows.

True

Pricing indirectly affects sales quantity.

True

Professional and managerial requirements tend to become intertwined with family feelings and interests

True

The market-based valuation approach to determine the value of a business is based on the sale prices of comparable firms.

True

The marketing strategy is frequently referred to as the marketing mix within the formal marketing plan.

True

The term entrepreneur as understood in this textbook excludes salaried managers of larger corporations

True

Three primary rewards of entrepreneurship are thought to be profit, independence, and a satisfying way of life

True

Tim Hortons franchisees must receive training in areas such as doughnut making, accounting, and merchandising.

True

Under certain circumstances, local and federal laws must be considered in setting prices in a small business.

True

When purchasing a business the potential buyer should always question why the owner is trying to get rid of it.

True

Within the context of the general environment, critical segments include sociocultural, technological, economic, and political/legal trends.

True

The "elevator pitch" is a detailed presentation given to prospective investors.

false

21. A business plan should describe where you are, where you want to go, and how you propose to get there.

True

The family firm's total culture always changes when a new generation takes over

False

13. A business plan is prepared for external use only; for example, to interest potential investors.

False

14. Packaging and labelling are unimportant in the process of marketing a product.

False

25. The failure rate for independent small businesses is comparable to that for franchised businesses

False

33. Reputable franchisors usually do not require franchisees have legal counsel.

False

38. Even if a franchising organization considers the applicant to be a suitable prospect with high probability of success, it rarely extends a helping hand financially.

False

46. The marketing plan should focus on marketing analysis and strategy and therefore exclude descriptions of the competition.

False

9. A franchisee has the freedom to add different products and services to the operation.

False

A benefit of becoming a franchisee is the increased freedom and flexibility to operate the business.

False

A business plan should project marketing, operational, and financial aspects of a business for the first seven years

False

A company's major product strategy should be based on the nature of the firm's product offering and the unique features that separates it from the competition.

False

A consumer-oriented philosophy expresses the belief that everything including production and sales depends entirely upon market conditions.

False

A drawback of becoming a franchisor is the decrease in operating assistance.

False

A family business is characterized by ownership or other involvement by four or more members of the same family in its life and functioning.

False

A franchisee is an entrepreneur whose power is unlimited by a contractual relationship with a franchising organization.

False

A market is best defined as a geographical area of marketing concern to the entrepreneur.

False

Accountants and consultants are considered the two most valuable sources of assistance when evaluating the purchase of an existing business.

False

An outside facilitator's main role is to mediate feuds that occur during family retreats.

False

As the game plan for a new venture, the business plan refers to the entrepreneur's bank account and other cash sources

False

Because the method takes into consideration both fixed and variable costs, average pricing is always an appropriate pricing approach for small businesses.

False

Benefit variables are related to product features.

False

Bequeathing equal amounts of ownership to all heirs, including those outside the business, is obviously the fairest and probably the most efficient way to perpetuate a family firm.

False

Buying assets of a business leaves the liabilities with the seller but potential liabilities become the responsibility of the purchaser.

False

Computer software that prepares business plans greatly simplifies and speeds up the process with little risk

False

Credit involves a disagreement between buyer and seller in terms of payment.

False

Determining the value of a business based on its book value is used in the replacement-value approach.

False

Family businesses refer solely to small businesses.

False

Franchisors always select the site.

False

In stage II of leadership succession, the introductory stage, the successor becomes acquainted with the family business by playing on the business's premises or around its equipment.

False

In stage III, the child begins to work at an executive level.

False

Market segmentation identifies larger customer groups that will respond to general marketing strategies.

False

Quebec and Manitoba are the only provinces that regulate franchising.

False

Serendipity is a term describing a new product idea resulting from deliberate search activities.

False

Service mark is a term indicating the non-exclusive right to use a brand to identify a service.

False

Small business is most often financed by many investors which is one reason why they are so successful

False

Small businesses should always pursue a multisegmentation strategy as they can safely spread their resources out thinly.

False

The biggest advantage of using a computer spreadsheet to prepare the financials is the professional formatting of the output.

False

The buyer of an existing business acquires inventories and physical facilities but often must replace all personnel.

False

The cash flow-based valuation approach to determine the value of a business identifies the amount of cash on hand and values that cash based on the average US currency exchange rate over the previous 12 months.

False

The leader of a family firm may safely ignore in-laws outside the business, though he or she must carefully consider the views of in-laws who are members of the family firm.

False

The modified-book-value approach to determine the value of a business identifies differences in book value to historical cost.

False

The primary basis for start-up ideas is personal experience gained solely in one's household.

False

The sole purpose of a business plan is to persuade potential investors to supply funding to the business.

False

The state of competition never affects a firm's orientation.

False

The term commonly used to describe a relationship between franchisor and franchisee is business partnership.

False

The terms lender and investor can be used interchangeably when talking about raising funds for a start-up venture

False

Today, marketing is viewed as activities that direct the flow of goods and services from producer to consumer, or user

False

. It is important for potential franchisees to remember that many financial figures provided by franchisors are only estimates.

True

. The family firm is a competitive business, and disregard of this will pose a threat to the business and impose strains on family relationships.

True

. The fundamental purpose of an "elevator pitch" is to create interest.

True

10. Writing a business plan provides an opportunity for the entrepreneur and a management team to think about the key drivers of a venture's success or failure

True

15. Prospective investors play the role of skeptics, thinking more about what could go wrong, whereas an entrepreneur characteristically focuses on the positive potential of the start-up; that is, what will happen if everything goes right.

True

18. Entrepreneurs should be prepared to present their "elevator pitch" on street corners, or anywhere the opportunity presents itself.

True

18. Putting emphasis on moving merchandise often creates customer dissatisfaction, especially if high-pressure selling is used with little regard for customers' needs.

True

30. Unlike an investor, the lender is not focused on capital gains, but rather loan repayment.

True

32. A trademark is an identifying feature used to distinguish a manufacturer's product.

True

35. Prestige pricing requires that a firm's product have a real or perceived competitive advantage in the consumer market.

True

4. Countries with an expanding middle class, with disposable income to spend on retail items and fast food, are attractive growth prospects.

True

4. Marketing analysis is best defined as an evaluation process that encompasses market segmentation, marketing research, and sales forecasting.

True

42. A break-even analysis is typically presented by formulas or graphs.

True

46. Three minuses of franchising include cost, restrictions on growth, and loss of independence.

True

7. A prospective entrepreneur is preparing to write a business plan. He should first consider the amount of time and money he has to spend.

True

7. Total variable costs are costs that vary with the quantity produced or sold.

True

A "can do" attitude is essential in starting a new business. Planning is a good thing, although getting the business operational is equally important.

True

A brand is a verbal and/or symbolic means of identifying a product.

True

A disclosure document is a detailed statement of such information as the franchisor's finances, experience, size, and involvement in litigation.

True

A family business involving two or more children may experience either sibling cooperation or sibling rivalry.

True

A production-oriented philosophy emphasizes the product as the most important part of the business

True

A recent job provides experience that can help with start-up ideas

True

A strategic decision is a decision regarding the direction a firm will take in relating to its customers and competitors

True

A variation of the single-segmentation strategy is called niche marketing

True

A warranty is a promise that a product will perform at a certain level or meet certain standards.

True

A well-prepared business plan may be helpful in gaining a supplier's trust and securing favourable credit terms

True

An appraisal or valuation of the firm is one of two basic stages in evaluating the financial health of a firm.

True

Building a competitive advantage requires commitment of considerable resources.

True

Buying the shares of an existing business means buying everything including the liabilities and potential lawsuits.

True

Car dealerships are typical examples of product and trade name franchises.

True

Carried out correctly, the process of preparing the business plan will clarify what you want to accomplish in a new business and, equally important, which factors might determine your success or failure in the venture.

True

Core competencies are value-creating organizational capabilities that are unique to a firm.

True

Entrepreneurs seeking bank financing need to customize their funding proposal according to the type of financing they are pursuing.

True

Goodwill is the difference between the higher price paid for an existing business over the value of its assets.

True

Guilt is often the primary motivator for obligation-based commitment to family businesses.

True

In stage IV of leadership succession, the functional stage, the successor enters full-time employment.

True

Many new businesses are formed as a result of the entrepreneur's prior work experience, through which he or she sees ways to improve and/or modify a product.

True

Markup pricing has emerged as a manageable pricing system for retailers who must quickly price hundreds of products

True

Most franchisors are highly selective when granting a franchise, which helps explain the lower failure rate.

True

Obligation-based commitment results from a sense of duty or expectation.

True

Poor market positioning and a lack of a perceived advantage among customers in the target market are reasons why many new ventures fail.

True

Price is a specification of what a seller requires in exchange for transferring ownership or use of a product or service

True

Purchasing assets provides the buyer with more flexibility versus purchasing shares because the buyer can identify specific productive assets that will be purchased.

True

Regardless of the type of business, the consumer-oriented marketing philosophy is the best choice among the competing alternatives for small businesses.

True

Research shows any form of commitment to a business is better than no commitment at all

True

Rising demands of buyers or suppliers are threats to the venture

True

Segmenting variables are labels that identify the particular dimensions that distinguish one form of market behaviour from another.

True

Serendipity is the phenomenon of making desirable discoveries by accident.

True

Small business employs about 7.7 million Canadians in the private sector.

True

Sustainable competitive advantage is an established value-creating industry position that is likely to endure over time.

True

The amount of time spent planning depends on the management team's personal preferences.

True

The costs of starting an independent business is often high and the typical entrepreneur's capital sources are quite limited.

True

The distinctive values that motivate and guide an entrepreneur in the founding of a firm may help to create a competitive advantage for the new firm.

True

The executive summary in a business plan highlights the significant points and, ideally, creates enough excitement to motivate the reader to continue reading.

True

The extent of limitations on nonfamily employees will depend on the number of family members active in the business

True

The firm's mission statement concisely describes, in writing, the intended strategy and business philosophy for making the entrepreneur's vision a reality.

True

The four primary routes to entrepreneurship are entering a family business, opening a franchised business, starting a new business, and buying an existing business.

True

The franchisor being evaluated should be the primary source of information about a franchise.

True

The level of complexity of a business affects how much planning is appropriate.

True

The marketing plan should identify user benefits and show evidence of consumer interest, as well as clarifying the firm's competitive edge.

True

The most important feature of the franchise contract is the provision relating to termination and transfer of the franchise.

True

The objective of a break-even analysis is to determine the quantity at which the product, at an assumed price, will generate enough revenue to start earning a profit.

True

The potential value of any franchising arrangement is defined by the rights contained in an agreement.

True

The primary concern of the banker providing a loan to a new business is loan repayment

True

The process of preparing a successor for leadership in a family business often takes a decade or longer

True

The sales forecast is the typical indicator of market adequacy.

True

The single-segmentation strategy is usually the wisest strategy for small businesses during initial marketing efforts.

True

The study by Thornhill and Amit suggests that reasons for failure are different in each phase of the business life

True

There are no hard and fast rules concerning the right age for starting a business.

True

Typical components of franchising include royalty payments, advertising expenditures, and the franchise fee.

True

Which of the following proclaims to be "the world's premier association dedicated to protecting, enhancing, and promoting franchising"? a. International Franchise Association (IFA) b. Canadian Franchise Association (CFA) c. American Franchise Association (AFA) d. Global Franchise Association (GFA)

a. International Franchise Association (IFA)

74. Which statement is most relevant to a Canadian franchisor that successfully expands overseas? a. It must have a sound and successful home base that is sufficiently profitable. b. It needs resources surplus to what is needed for its domestic requirements. c. The development of international markets will always take longer. d. Canadian franchise laws will apply in whichever country it chooses to establish in.

a. It must have a sound and successful home base that is sufficiently profitable.

Roslyn wants to open a bike shop but needs capital to purchase inventory, hire staff, and cover overhead costs for about six months. What should Roslyn do to attract investors? a. Pitch the plan to a venture forum. b. Mail the plan to many banks. c. Send out fliers stating the need for capital. d. Wait for investors to find her.

a. Pitch the plan to a venture forum.

What management concept is advisable in the family firm? a. Rely on the competence of professional managerial personnel. b. Show favouritism in personnel decisions. c. Keep discussions of changes in ownership open with all employees. d. Make a child a manager from a young age.

a. Rely on the competence of professional managerial personnel.

Which example shows an idea for a new start-up coming from a hobby? a. a coin collector who bought and sold coins for years to build a personal collection decides to become a coin dealer b. a furniture salesperson sees the possibility of opening a new furniture store in a different area of the city c. a sharpshooter who shot holes in a pair of her boyfriend's jeans during an argument hears him receive compliments on the way they look d. a chemist who accidentally mixes potassium with hydrogen to create an explosive reaction used in fireworks

a. a coin collector who bought and sold coins for years to build a personal collection decides to become a coin dealer

Julie has limited capital to purchase a corporation and wants to minimize the amount she pays for the business. What should Julie purchase? a. assets of the business b. shares of the business c. patents of the business d. cash in the business

a. assets of the business

Why are franchisees more motivated than salaried employees? a. because of profit incentives and their vested interest in the business b. because the increasing number of stores is motivating c. because franchisors tend to have more motivated employees than nonfranchisors d. because their control is greatly reduced

a. because of profit incentives and their vested interest in the business

What are the two methods of purchasing a business that is a corporation? a. buying the assets or shares of the business b. buying the assets or inventory and equipment of the business c. buying the equipment or patents of the business d. buying the shares or customer list of the business

a. buying the assets or shares of the business

Eleanor and Richard are married and run a successful business. They attribute their success to Eleanor's social skills with clients and Richard's business and financial skills. Which term best describes this couple? a. co-preneurs b. corporate duo c. partnership d. business team

a. co-preneurs

One of the reasons why a car manufacturer sells so well is because the company allows customers to return the vehicle at any time within the first 30 days of purchase for a full refund. What motivates customers to purchase this brand? a. complementary components b. main element c. core service d. overall package

a. complementary components

Sales associates of Sewell Motors strive to exceed the company's expectation of treating the customer as its number one priority. Every action, policy, and ultimate sale is conducted professionally, with the needs of potential customers in mind. Which type of marketing philosophy does Sewell Motors subscribe to? a. consumer-oriented b. market-oriented c. sales-oriented d. production-oriented

a. consumer-oriented

What is a specification of what a seller requires in exchange for transferring ownership or use of a product or service? a. cost b. price c. markup d. margin

a. cost

What is often the most difficult decision for a founder when passing the business on to his children? a. determining whether they should all receive equal shares b. finding suitable positions for nonfamily employees c. arranging the transition from part-time to full-time employment d. dealing with tax implications on the transfer of ownership

a. determining whether they should all receive equal shares

Victor has noticed some of his customers bypassing his café at lunch and going to an organic grocer that opened across the street. How would Victor classify the organic grocer in relation to his cafe? a. direct competitor b. complimentary competitor c. indirect competitor d. substitute competitor

a. direct competitor

How does price have a dual influence on total sales revenue? a. directly as part of the sales revenue equation and indirectly through its impact on demand b. directly as part of the cost equation and indirectly through its impact on quality c. directly as part of the markup equation and indirectly as part of the revenue equation d. directly through its impact on demand indirectly through its impact on quality

a. directly as part of the sales revenue equation and indirectly through its impact on demand

The decline in the value of the Canadian dollar has helped Antonio's Ottawa business increase exports to the US. Which trend is this related to? a. economic b. sociocultural c. political legal d. global

a. economic

What should be the primary investigation for a potential franchisee? a. evaluate the franchisor b. evaluate the franchisor's suppliers c. evaluate existing and previous franchisees d. evaluate competitors of the franchisor

a. evaluate the franchisor

An investor has reviewed a business plan and the company's track record since its inception six months ago. The investor is ready to provide capital for the company to grow. Why is the investor interested in providing capital? a. evidence of customer acceptance of the venture's product or service b. expense projections that are far lower than normal industry ranges c. competition in the industry is on the decline d. new features have been added to the product being sold

a. evidence of customer acceptance of the venture's product or service

81. Gillian wishes to expand her health food franchise to countries in the Caribbean and South America. What do these countries likely have in common to make franchising there attractive? a. expanding middle class b. smaller populations c. lack of disposable income d. public transit

a. expanding middle class

Jagdev wants family members to stay on track and discuss business matters during the annual meeting for his family business. He hires an outsider to help manage the meetings. Which term refers to this outsider? a. facilitator b. mediator c. arbitrator d. counselor

a. facilitator

Paula is about to start her restaurant franchise and is reviewing what she will allow with respect to which suppliers can or cannot be used. Which party in the franchise contract is Paula? a. franchisor b. franchisee c. franchisor's legal council d. franchisee's legal council

a. franchisor

Which environment is very broad and includes factors that affect all businesses in society? a. general b. industry c. market d. global

a. general

Corey owns a medical supplies company. He's noticed an increase in the number of other medical supplies companies which has affected his pricing. How has this also affected his planning? a. increased the amount of planning required b. has not affected the amount of planning required c. reduced the amount of planning required d. eliminated the need for planning

a. increased the amount of planning required

Peter sells a line of security surveillance cameras that most of his customers set up in their homes. What type of customer does Peter mostly sell to? a. individuals b. professionals c. home-makers d. business users

a. individuals

Mona has completed a lot of research on two companies she is interested in purchasing but requires some more information and advice. Which two experts should Mona consult to attain the most valuable advice? a. lawyer and accountant b. accountant and business broker c. matchmaker and lawyer d. business broker and commercial real estate agent

a. lawyer and accountant

Parmeet found that her first-year college students were less and less prepared to be academically successful. Using her teaching experience she created a business to provide weekend camps for students to become more prepared for their postsecondary education. Which approach did Parmeet use to identify her business idea? a. looking outside-in b. looking outside-out c. looking inside-out d. looking inside-in

a. looking outside-in

Rohan believes his company's line of mp3 players will sell equally well to middle-aged males and females, adults in their 20s and 30s, and teenagers as long as the promotions are targeted properly to each group. What type of strategy is Rohan following? a. multisegmentation b. single-segmentation c. niche d. target market

a. multisegmentation

Josh has investors very excited about his new approach to cyber security that virtually eliminates all outside threats from system viruses or identity theft. What is Josh's new business idea based on? a. new technology idea b. new benefit idea c. new process idea d. new service idea

a. new technology idea

The mother in a family business changes her role from meeting with overseas clients to running operations so that she can stay home to teach her daughter how the business is run. What is her primary family concern? a. nurture b. profitability c. survival d. debt avoidance

a. nurture

Elle and Richard design a new wildflower arrangement they sell through trade shows. Richard puts the arrangement on display to watch the reaction of potential buyers. Which method is being used to collect data? a. observational b. focus groups c. test marketing d. Questioning

a. observational

Carl's parents own a family business. Though he feels pressure to always be working for the business, it is good for his lifestyle because the flexibility it provides allows him to be home when needed for his wife and children. How do the interests of the family and the interests of the business interact in Carl's situation? a. overlap b. conflict c. coincide d. collaborate

a. overlap

Susan has recently taken over a business from her parents and is feeling frustrated. Her parents continue to come into the office to direct the employees, including Susan, and to monitor operations. What problem exists in passing the leadership from her parents to Susan? a. paternalistic mould b. collaborative family mould c. participative business mould d. one-generation mould

a. paternalistic mould

Folding bed sheets with elastic corners was difficult for Rose. She created a tool to help keep the corners straight. This tool worked so well she developed a web business to sell it on the Internet. What was the source of Rose's new business idea? a. personal experience b. hobby and personal interests c. accidental discovery d. deliberate new business search

a. personal experience

Cameron has turned 14 and has begun working within his parents' business two days during the week after school and on Saturday mornings. What stage of business succession is this family business in? a. pre-business involvement b. proof of competence c. personal development d. formal start in the business

a. pre-business involvement

What is the most productive source of start-up ideas? a. prior work experience b. personal interests and hobbies c. chance happening d. deliberate search

a. prior work experience

What term refers to the total bundle of satisfaction offered to customers in an exchange transaction? a. product b. service c. experience d. satisfier

a. product

What areas of marketing strategy should be addressed within the marketing plan? a. promotional, pricing, distribution, and product/service decisions b. promotional, product/service decisions, sales support, and pricing plans c. promotional, product/service decisions, supplier reliability, and distribution plans d. promotional, pricing, supplier reliability, and distribution plans

a. promotional, pricing, distribution, and product/service decisions

Peter decides to open a painting franchise because he feels he will have immediate customers that recognize the business brand. What attracted Peter to purchasing a franchise instead of opening the business under his own name? a. proven marketing concept b. training support c. financial assistance d. operating assistance

a. proven market concept

What must a group of customers or potential customers possess to be appropriately considered a market? a. purchasing power b. marketing power c. retail power d. pricing power

a. purchasing power

. Mohammed foregoes purchasing security cameras for his company's inventory department because the employees are his cousins. According to Sirmon and Hitt, what is this an example of? a. reduced cost of control b. shared social networks c. focus on the long run d. preservation of reputation

a. reduced cost of control

Of all the relationships in a family business, which relationship has been recognized for generations as the most troublesome? a. sibling rivalry b. parent-child relationship c. spousal relationship d. in-law rivalry

a. sibling rivalry

Jonathan's business employs 70 people and generates sales of $400,000 selling medical supplies to dentists. What kind of business does Jonathan own? a. small business b. micro-business c. lifestyle business d. high-potential business

a. small business

Jennifer can't wait to start her business. The excitement of running her own enterprise and the risks of failure are both thrilling to her. What is Jennifer experiencing? a. start-up fever b. start-up anxiety c. start-up rush d. start-up apprehension

a. start-up fever

Which component of a SWOT analysis is "a strong network of personal contacts"? a. strengths b. weaknesses c. opportunities d. threats

a. strengths

Which of the following indicates a niche strategy? a. strict concentration on a single market segment b. concentration on multiple products c. concentration on multiple products for the total market d. selling to many geographical regions

a. strict concentration on a single market segment

Where in the business plan should the executive summary be inserted? a. at the beginning b. after the marketing plan c. before the finance plan d. at the end

a. the beginning

What is the most important feature of the marketing plan? a. to identify user benefits and the type of market that exists b. to show the degree of patent or copyright protection c. to summarize the location of potential customers d. to identify distribution channels

a. to identify user benefits and the type of market that exists

Elle is looking to grow her cycling association. She has created a logo to symbolize health through activity to be placed on jerseys members receive with their membership fee. A lawyer has been hired to register the symbol. What is this symbol called? a. trademark b. copyright c. patent d. label

a. trademark

Kelly is interested in purchasing a daycare franchise because the business model allows her to immediately begin operating. What is likely to interest Cheryl most about a franchise? a. turnkey operation b. branch operation c. independent operation d. subsidiary operation

a. turnkey operation

Why is the sharing of profits a limitation to becoming a franchisor? a. The franchisee will not share profits. b. Only part of the profits from the operation belong to the franchisor. c. The franchisor must spend those profits on training the franchisees. d. The sharing of profits reduces the franchisor's control.

b. Only part of the profits from the operation belong to the franchisor.

George's company has sold a line of nature paperweights specifically targeted at middle-aged women who like tocollect decorative items with natural themes. Sales have been declining steadily as market segments are increasinglysharing similar needs and desires. What is the most likely reason for this decline in sales? a. The firm has a unique focus strategy. b. The differences across segments are narrowing. c. New firms are having difficulty entering the industry. d. Employees are learning unique skills.

b. The differences across segments are narrowing.

Nicholas is unsure of the kind of business to start. He wonders if the Internet, business magazines, or talking to professionals would be the best way to start. Which key start-up question is Nicholas addressing? a. What are the different start-up ideas you might consider? b. What are some sources for additional new business ideas? c. How can you identify a genuine opportunity that promises attractive financial rewards? d. What competitive advantage could your business have over its rivals?

b. What are some sources for additional new business ideas?

Preeti feels she has sufficient capital to start her business and is thinking about what other resources or information she needs to minimize the risk of failure. Which key start-up question is Preeti addressing? a. What are the different start-up ideas you might consider? b. What could you do to increase your chances that the start-up business will be successful? c. How can you identify a genuine opportunity that promises attractive financial rewards? d. What competitive advantage could your business have over its rivals?

b. What could you do to increase your chances that the start-up business will be successful?

64. Nigel has created franchisee relationships with the managers of the multiple clothing stores he owned. He finds there is an increase in operating support. What would cause this? a. shared advertising b. accounting and legal services c. shared profits d. royalty fees

b. accounting and legal services

94. Deirdre owns a flower shop franchise and her agreement with the franchisor allows her to open up to three more shops within a specified territory. Which term best describes Deirdre? a. development franchisee b. area developer c. piggyback franchisee d. multiple-unit owner

b. area developer

Kelvin was glad he created a business plan for his painting business. He was able to ensure all the important items were covered such purchasing brushes and ladders, printing and mailing brochures, and negotiating a line a credit at the bank. In what capacity was Kelvin's plan useful to him? a. as a schedule b. as a checklist c. as a proposal d. as a review

b. as a checklist

Lisa has a list of the assets and their book values for a business she may purchase. She has hired an appraiser to estimate their true value. What valuation method is Lisa using? a. modified-book-value approach b. asset-based valuation approach c. replacement-value approach d. market-based valuation approach

b. asset-based valuation approach

Oscar decides to remove the line of water filters that he had added to his office supply products because the filters are not selling. What is Oscar performing? a. return on investment analysis b. business analysis c. break-even analysis d. distribution analysis

b. business analysis

59. What figure is a measure of the riskiness of current earnings and the expected growth rate of future earnings and is used to assess the earnings based value of a business? a. real interest rate b. capitalization rate c. risk rate d. valuation rate

b. capitalization rate

Jack wants customers that purchase from his chain of hardware stores to feel they received the best value possible. To accomplish this Jack continually negotiates the best arrangements possible with his suppliers. Which competitive advantage strategy is Jack most focused on? a. customer service b. cost-based c. differentiation d. premium product

b. cost-based

Which business activity relates to small business marketing? a. manufacturing the product b. determining target market potential c. negotiating terms with suppliers d. arranging financing to cover the costs of expansion

b. determining target market potential

James is interested in a business that is listed for sale. He makes appointments with the bank that the business deals with, some suppliers, and a few customers. What is James most likely doing? a. background checks b. due diligence c. legal research d. environmental scan

b. due diligence

Patricia knows she will soon pass the business reins to her children. She writes a formal document to guide this transition. What is this document? a. family business bible b. family business constitution c. family business contract d. family business agreement

b. family business constitution

Every fall Colin takes the family members active in his family business to a resort in Northern Ontario to review the year, their relationships, and where the business is heading. What is the annual event called? a. family council b. family retreat c. family review d. family audit

b. family retreat

A local theatre charges $10 admission. However, seniors only pay $7.50 and all patrons only pay $7.00 for matinee times before 5pm. What strategy is the theatre using? a. variable pricing b. flexible pricing c. price-lining d. differentiated pricing

b. flexible pricing

Dominic is meeting with a franchisor to sign a written legal agreement that defines their business arrangement. Which document will Dominic be signing? a. master license b. franchise contract c. requirements contract d. franchise consent draft

b. franchise contract

Katie feels the franchisor has overcharged her franchise for its share of advertising costs. What document should Katie review to determine the proper advertising charges? a. franchise agreement b. franchise contract c. franchise manual d. franchise license

b. franchise contract

56. In accordance with the franchise law in Manitoba, Ron is currently waiting 14 days before he can close the agreement with the franchisor. What did Ron recently receive from the franchisor? a. franchise lease agreement b. franchise disclosure document c. franchise contract d. franchise background check

b. franchise disclosure document

Castro has a cleaning franchise. He would like to offer services to a nearby town but is not allowed to go beyond his territory. Which party in the franchise contract is Castro? a. franchisor b. franchisee c. lessee d. licensee

b. franchisee

Devon lives in a small town and sells stock plans to younger investors and government bonds to investors close to retirement age. What variable is Devon focusing on to make sales? a. benefit b. geographic c. demographic d. psychographic

b. geographic

Robert successfully sells a line of baby seats to young families in rural areas promoting its high rating for safety. What variable is Robert focusing on to make sales? a. benefit b. geographic c. demographic d. psychographic

b. geographic

Elle loves to cycle between small towns in Northern Ontario. This inspired her to use her own maps of safe cycling roads to create an Internet subscription business for other cycling enthusiasts. What was the source of Elle's new business idea? a. personal experience b. hobbies and personal interests c. accidental discovery d. deliberate new business search

b. hobbies and personal interests

Jonathan invited various people to a pre-opening of his advertising firm. One individual was very interested in the venture and asked to see Jonathan's business plan. Which group would this individual likely belong to? a. graphic artists b. investors c. retailers d. printers

b. investors

Filomena has always maintained a business plan but for internal use only. Filomena is now adjusting the plan for external use due to changes in the company. Who is Filomena likely preparing the plan for? a. employees b. investors and lenders c. customers d. government agencies

b. investors and lenders

Juanita had to close her business after three years. The clothing she purchased from overseas manufacturers never caught on in Canada as she thought it would. Which of the following best describes Juanita's situation? a. overestimated what one can do b. lacked an understanding of the market c. hired mediocre people d. failed to be a team player

b. lacked an understanding of the market

An investor is reviewing a business plan and is particularly interested in reading about the background of the owners and how they will structure the organization. What section of the plan would the investor be most interested in? a. operating plan b. management plan c. financial plan d. executive summary

b. management plan

What should the customer profile in a market analysis include? a. a SWOT analysis of the competition b. marketing research information c. only primary data describing the customer d. only secondary data describing the customer

b. marketing research information

Kamil has made an arrangement with a home cleaning franchise to open locations within his city and several towns on the outskirts. What is Kamil's franchise strategy? a. development franchising b. multiple-unit ownership c. piggyback franchising d. aggregate ownership

b. multiple-unit ownership

A business owner tells her banker, "I'd like you to meet my son, John, who is going to help me take inventory." What stage of succession is this? a. educational b. pre-business involvement c. proof of competence d. formal start in the business

b. pre-business involvement

Alexander is presenting his business to a bank's commercial loans officer in order to finance his venture selling custom canoes. What will the loan officer's greatest concern be? a. the size of the market for custom canoes b. the risk the loan will be repaid c. the price and quality of the canoes d. Alexander's experience in the watercraft industry

b. the risk the loan will be repaid

Scott feels his family business is stagnating because the family members all think alike. He hires a nonfamily member to bring a fresh view and to explore different markets. Why did Scott hire a nonfamily member? a. to bridge the gap between generations of family members b. to set new directions for the business c. to deal with change d. to provide new skills and expertise

b. to set new directions for the business

78. Alison has no experience managing staff. For that reason she opens a wine-making franchise. What attracted Alison to purchasing a franchise instead of opening the business under her own name? a. proven marketing concept b. training support c. financial assistance d. operating assistance

b. training support

A cardiologist creates a device that attaches to a smart phone to provide real-time information to a patient's doctor. The product outsells all other monitoring devices. Which factor most contributes to the competitive advantage of this product? a. price/value b. unique service features c. customer service d. accessibility

b. unique service features

Why do overlap of family concerns and business interests complicate management of a family firm? a. All profit should go to the founder of the business. b. Its leader must struggle with making all the decisions. c. Good non-family employees may get overlooked for advancement. d. Children of the business's founder are expected to take over the business.

c. Good non-family employees may get overlooked for advancement.

How should owners avoid a stifling atmosphere for nonfamily employees in a family business? a. Promote only non-family members. b. Avoid all special considerations for family members. c. Make clear the extent of opportunities for non-family members. d. Minimize discussion about future management changes.

c. Make clear the extent of opportunities for non-family members.

A company raises its prices and customers have no choice but to pay because there are no other substitute products. Which of Michael Porter's competitive forces is this an example of? a. threat of new competitors b. bargaining power of buyers c. bargaining power of suppliers d. threat of substitute products

c. bargaining power of suppliers

John introduced George to Tom and played an integral role in George purchasing Tom's business. What would John be called in this transaction? a. business lawyer b. franchise accountant c. business broker d. franchise salesman

c. business broker

What is a rule to follow when choosing a name for a product? a. easy to spell with few consonants in a row b. has the same meaning in several mainstream languages c. easy to pronounce and remember d. has less than three syllables

c. easy to pronounce and remember

Gordon is describing the highlights of his business, including its sales and profit potential and the proprietary processes that make it unique from the competition. Which section of the business plan is Gordon writing? a. financial plan b. general company description c. executive summary d. operating plan

c. executive summary

Richard and Bonny have entered into a business relationship to sell pet care services. Bonny's operation will be identical to Richard's operation and Richard has outlined for Bonny precisely how to run her business, how much to charge clients, and all other business details. What kind of business relationship exists between Richard and Bonny? a. subsidiary b. partnership c. franchise d. employee

c. franchise

Violet has hired an accountant to help her project the financial results for a business she plans to start. She will pay the accountant $500 for each year that is projected. How much will Violet likely pay the accountant? a. from $250 to $1,000 b. from $1,000 to $1,500 c. from $1,500 to $2,500 d. from $2,500 to $3,500

c. from $1,500 to $2,500

What is the optimum length for a business plan? a. no more than 10 pages b. no more than 20 pages c. no more than 25 pages d. no more than 40 pages

c. no more than 25 pages

Jonathan is describing the flow of raw materials into the production process and how they are converted into finished goods for sale. Which part of the business plan is Jonathan writing? a. executive summary b. management plan c. operating plan d. product and service plan

c. operating plan

Happy with the company's success, Jude reduces further investment in R & D to increase distribution channels and widen the geographic coverage of his company's energy drink. Which marketing philosophy does Jude subscribe to? a. consumer-oriented b. market-oriented c. sales-oriented d. production-oriented

c. sales-oriented

Which marketing philosophy is considered to be short-sighted? a. consumer-oriented b. market-oriented c. sales-oriented d. production-oriented

c. sales-oriented

What is a promise, written or unwritten, that a product will do certain things or meet certain standards? a. trademark b. copyright c. warranty d. label

c. warranty

According to Michael Porter, when can a focus strategy erode? a. when the strategy is unique b. when the target segment's differences from other segments widen c. when new firms subsegment the industry d. when demand increases and the segment becomes attractive

c. when new firms subsegment the industry

A family business has a primary benefit which is derived from the strength of family relationships. What is this benefit? a. The family business often gets special financial treatment from banks. b. Customers receive higher quality products from family run businesses. c. Suppliers tend to give better pricing to businesses run by family. d. Family members have a unique motivation because the firm is a family firm.

d. Family members have a unique motivation because the firm is a family firm.

. How long does the process of preparing a family successor for leadership in the family business customarily take? a. weeks b. months c. two or three years d. a decade or longer

d. a decade or longer

A founder of a family business is contemplating turning 20 percent of the business over to each of his five children. What would the most active child in the business (the leadership successor) then become? a. a subcontracted employee with equal responsibility to relatives on the outside b. an equal share employee with more responsibilities than relatives on the outside c. a business owner that receives less return for work performed than relatives on the outside d. a minority stockholder at the mercy of relatives on the outside

d. a minority stockholder at the mercy of relatives on the outside

. What is CAFE? a. a consulting firm providing advice to family businesses b. an expression that denotes relaxation time for the family at a local café c. a radio talk show for family entrepreneurs in distress d. a not-for-profit agency providing assistance to family businesses

d. a not-for-profit agency providing assistance to family businesses

Cameron sells large bags of sawdust used to clean up spills in production processes. What type of customer does Cameron sell to? a. individuals b. professionals c. home-makers d. business users

d. business users

Devin has hired a trends analyst and an accountant to review the likelihood a business's earnings will continue on its current rate of growth. What is Devin attempting to calculate? a. growth rate b. earnings rate c. interest rate d. capitalization rate

d. capitalization rate

What is a key statement in the financial plan? a. break-even analysis b. estimate of returns and allowances c. salary expense statement d. cash flow statement

d. cash flow statement

What strategy is used to implement niche marketing? a. selling to a mass market b. extending product features to sell to more geographical regions c. emphasizing a multi-product or service d. concentrating on the superiority of the product or service

d. concentrating on the superiority of the product or service

Angela is meeting Christopher, the seller of the business she purchased, in order to sign a document stating that Christopher cannot open a similar business for five years. What document is Christopher going to sign? a. general business contract b. purchase and sale contract c. final sale agreement d. noncompetition agreement

d. concompetition agreement

69. Which of the following is considered an attractive characteristic of franchising? a. success rates equal to other business start-up methods b. entrepreneurial independence c. financial and training independence d. operating assistance

d. operating assistance

Noah is conducting research about a type of business by reading industry journals and newspaper records of articles. What kind of research is Noah conducting? a. print b. media c. primary d. secondary

d. secondary

Which strategy focuses on one market even when many markets exist? a. multisegmentation b. unsegmented c. marketing mix d. single-segmentation

d. single-segmentation

87. What is the most important feature of a franchise contract? a. the provision relating to the suppliers that can be used by the franchisee b. the provision relating to the hiring of staff and their hours of work c. the provision relating to the franchise fee and royalty payments d. the provision relating to termination and transfer of the franchise

d. the provision relating to termination and transfer of the franchise

Jacintha hired a nonfamily executive who has experience working in the overseas markets that the company has begun selling within. No family member is familiar with these markets. Why did Jacintha hire a nonfamily member? a. to bridge the gap between generations of family members b. to set new directions for the business c. to deal with change d. to provide new skills and expertise

d. to provide new skills and expertise

Where should the cash flow forecasts and pro forma financial statements appear in the plan? a. within the executive summary b. within the operating plan c. within the marketing plan d. within the appendices

d. within the appendices

A characteristic of artisan entrepreneurs is their strong communication skills

False

A competitive advantage exists when a firm offers a product or service that is perceived by customers to be inferior to those of competitors, thereby promoting firm unprofitability.

False

A corporate refugee is a person who tried entrepreneurship, failed, and sought refuge in corporate employment

False

A younger person may avoid entrepreneurship so they can build up a retirement program

False

According to the textbook depiction of an entrepreneur, the definition of an entrepreneur is restricted to founders of business firms.

False

An entrepreneurial team works for the entrepreneur because they are more comfortable in a corporate setting and would rather not become entrepreneurs.

False

An opportunistic entrepreneur is a person who has no managerial or technical skills but rather starts the business relying on sheer luck.

False

Entrepreneurial independence translates into an easier life for the business owner.

False

Entrepreneurs can tolerate risk but they need an environment of certainty to be productive and produce profits.

False

Entrepreneurs may be classified into three types: founders, general managers, and franchisees

False

Statistics Canada, the Canada Revenue Agency, and the author of your textbook all use the same definition of a small business in Canada.

False

Successful entrepreneurs are creative and self-reliant but seek help to adapt to changes.

False

The industry environment is very broad, comprising general factors that affect all, or at least most, businesses in a society.

False

The possibility of failure for entrepreneurs is only a distant threat.

False

A niche market strategy is particularly attractive to a small firm that is trying to escape direct competition with industry giants.

True

An attractive small firm is specifically any small firm that provides substantial profits to it owner

True

An effective marketing advantage can occur when the consumer is convinced of the uniqueness and desirability of the product or service—real or perceived.

True

An entrepreneurial opportunity is economically attractive, timely, and creates value.

True

An older person may avoid entrepreneurship as they have family, financial, and job commitments that make it appear too risky.

True

Artisan entrepreneurs' education is limited to technical training and little business experience.

True

Bankruptcies in Canada are an indication that the possibility of failure is very real

True

Between 2002 and 2012, small business accounted for 78 percent of all new jobs created.

True

Business bankruptcies declined between 2000 and 2010

True

Entrepreneurs expect a return that will not only compensate them for the time and money they invest but also reward them well for other risks and initiative they take in operating their own businesses.

True

Entrepreneurs experience the unpleasantness of emotional stress as well as the need to invest much of their own time and labour.

True

Entrepreneurs who want to pursue a start-up business should address their competitive advantage over potential rivals

True

Entrepreneurship is marked by diversity

True

Hobbies of retiring business executives can spawn start-up ideas

True

In the textbook, Michael Porter is cited as having written about the five forces of determining the nature and degree of competition in an industry.

True

Limiting sales to a single geographic area is a niche market strategy.

True

More recently the over 50 age group has accounted for 30 percent of all new start-ups.

True

Persons who leave their homeland and go into business for themselves in a new country have been described as immigrant entrepreneurs.

True

Regina is an employee but she would like to have more control over her life and directly reap the rewards for her hard work. She would like to start her own business. What would likely have the strongest influence on Regina becoming an entrepreneur? a. a satisfying lifestyle, independence, profit b. a satisfying lifestyle, independence, love of country c. a satisfying lifestyle, financial rewards, preserving the capitalistic system d. a satisfying lifestyle, independence, love of country

a. a satisfying lifestyle, independence, profit

Balwant has several ideas for a new business and is learning about becoming an entrepreneur. What will Balwant most likely be concerned about? a. acquiring financial resources b. learning a new hobby c. investing in a retirement program d. spending time with friends

a. acquiring financial resources

Associates attribute Kayla's business success to her "never give up attitude". Whether it is a problem in operations or selling to a reluctant customer, Kayla continues to work to solve the problem or close the sale. Which entrepreneurial success quality best describes Kayla? a. commitment and determination b. opportunity obsession c. tolerance for risk, ambiguity, and uncertainty d. motivation to excel

a. commitment and determination

Which of the following describes an opportunistic entrepreneur? a. delegates authority in order to grow b. has a long-term time orientation c. avoids risks at all costs d. is paternalistic

a. delegates authority in order to grow

Skyler is a song-writer who created a business to sell her songs to the recording industry. Which term best describes Skyler? a. founder b. general manager c. franchisee d. sales person

a. founder

Jaclyn and her partner recognized an untapped market for in-home fitness training and developed a business servicing clients across Ontario. Which term best describes these partners? a. founders of business firms b. shop foremen c. directors of operations d. salaried managers of larger corporations

a. founders of business firms

Who comprises an entrepreneurial team? a. individuals who work together in the same firm as entrepreneurs b. the entrepreneur plus the firm's banker, chartered accountant, and lawyer c. a firm's managers d. government officials who provide counselling to aspiring entrepreneurs

a. individuals who work together in the same firm as entrepreneurs

Judy, a mother of five children, developed a fastener to keep sock pairs together in the laundry and sells her invention on the Internet. What is Judy? a. mompreneur b. opportunistic entrepreneur c. artisan entrepreneur d. high-potential venture

a. mompreneur

Eleanor continues to work at her career business because of the joy she receives from helping young people find their true calling. What entrepreneurship reward does Eleanor value most? a. personal fulfillment b. profit c. independence d. risk-taking

a. personal fulfillment

An individual flees the bureaucratic environment of big firms by going into business for herself. What term best describes this individual? a. quitter b. corporate refugee c. foreign refugee d. entrepreneurial team member

b. corporate refugee

Michelle continually looks for new products and markets to expand her business. Which entrepreneurial success quality best describes Michelle? a. commitment and determination b. opportunity obsession c. tolerance for risk, ambiguity, and uncertainty d. motivation to excel

b. opportunity obsession

When Tracee started her business she had three goals in mind: serve her customers well, make a profit, and donate a portion of profits to environmental preservation causes. Which term best describes Tracee? a. corporate refugee b. social entrepreneur c. immigrant entrepreneur d. serial entrepreneur

b. social entrepreneur

What is an entrepreneur? a. a salaried manager in a large corporation b. a financial manager in a small firm c. an owner-manager who buys out the founder of a firm d. an innovative manager with a willingness to accept risk

c. an owner-manager who buys out the founder of a firm

Christopher has developed a new process to triple the speed of a computer processor. He is getting a lot of offers for financial backing. Which term best describes Christopher's opportunity? a. opportunistic company b. attractive small firm c. high-potential venture d. microbusiness

c. high-potential venture

Ken Yip moved to Canada from Trinidad after getting financing for a company start-up with help from a program developed by the Minister of Citizenship. Which term best describes Ken? a. corporate refugee b. social entrepreneur c. immigrant entrepreneur d. serial entrepreneur

c. immigrant entrepreneur

Before making any decisions, Kyle gathers good information to help navigate through what often seems a complicated web of problems, challenges, and opportunities. Which entrepreneurial success quality best describes Kyle? a. commitment and determination b. opportunity obsession c. tolerance for risk, ambiguity, and uncertainty d. motivation to excel

c. tolerance for risk, ambiguity, and uncertainty

Lea sells her handmade products to collectors. Sales could be higher, but she tries to do everything herself and manages people the way she manages her family. Which term best describes Lea? a. high-potential entrepreneur b. lifestyle entrepreneur c. opportunistic entrepreneur d. artisan entrepreneur

d. artisan entrepreneur

Vanessa has started a cyber-security business to take advantage of new laws requiring all medical organizations to secure their data. This new industry is forecasted to generate several billion in sales per year. What type of business does Vanessa own? a. small business b. micro business c. lifestyle business d. high-potential business

d. high-potential business

Theresa enjoys being an entrepreneur mostly because she organizes the business the way she wants. Which reward of entrepreneurship does Theresa cherish most? a. relationship-building b. satisfying way of life c. profits d. independence

d. independence

Rose runs a landscaping company primarily because she loves gardening. Which term best describes Rose's business? a. high-potential venture b. microbusiness c. artisan business d. lifestyle business

d. lifestyle business

Christine takes over the nursery business her aging parents started. Which term best describes Christine? a. franchisee b. mompreneur c. mover and shaker d. second-stage entrepreneur

d. second-stage entrepreneur

58. Over the past decade Timothy has started seven companies, quickly made them profitable, and then sold them to other entrepreneurs. Which term best describes Timothy? a. corporate refugee b. social entrepreneur c. immigrant entrepreneur d. serial entrepreneur

d. serial entrepreneur

Joyce feels she is ready to start an interior decorating business. She has sufficient capital with her life savings and a small loan from her parents, but she is having some doubts about starting the business. What is the most likely cause for Joyce's second thoughts? a. the routine and boring work b. the requirement to pay a minimum wage to all employees c. the need to participate in civic activities d. the threat of business failure

d. the threat of business failure

What is an opportunistic entrepreneur expected to be? a. superstitious b. reluctant to delegate authority c. unwilling to plan for future growth d. well educated

d. well educated

The general environment is very broad, comprising general factors that affect all, or at least most, businesses in a society

True