Module 5 Practice Quiz

Small business output in the United States generates about _____ of our gross domestic product. Select one: a. 10 percent b. 90 percent c. 50 percent d. 75 percent

C ***

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

C ***

2. Entrepreneurs usually start with few resources but build their businesses with the collective help of family members and investors.

false

A local bakery is acting as a _____ when it sells desserts to a restaurant. Select one: a. wholesaler b. retailer c. franchiser d. franchisee

A

Although the split between those working in small companies and those working in big companies is about even, large companies: Select one: a. hire less frequently and fire less frequently than small companies. b. develop more patents per employee than small companies. c. offer employees a more innovative-friendly environment than small companies. d. are more likely than small firms to offer U.S. workers their first job when they enter the business world.

A

Brothers Ronnie and Jacob are both in college; Ronnie is a senior and Jacob a sophomore. They're both majoring in business administration and want to open a small business a few years after graduation. They understand that it's important to gain more management experience and build good credit ratings. Ronnie wants more security in his work and would be satisfied working with an older partner until he "learns the ropes." More than Jacob, he'd prefer a business that's been established for a few years. Although he likes a certain degree of independence, he's willing to follow directions and take advice. Jacob, on the other hand, wants more freedom to make his own choices and to succeed or fail on his own merits. He's quite creative and likes to set his own rules. By following your advice, Ronnie would probably enjoy all of the advantages of small business ownership except _____. Select one: a. time commitment b. financial rewards c. lifestyle freedom d. creative freedom and personal satisfaction

A

In order to meet the financial needs for future business growth as well as current demands, TruWood Cabinet Makers must secure a business loan of $125,000 from a local bank. The loan committee has asked owner and general manager Jarret Jones to write a comprehensive business plan that meets all of First Security Bank's requirements for such a large loan. After a lot of research and careful writing, the plan is constructed and ready for presentation to the loan committee. The dollars and cents of the business plan are especially important to loan committees. Jones is well aware that an entrepreneur must show how, when, and why the business will make a profit. He thus ensures that his _____ section details his startup costs and sources of funding, his projections of sales revenue, cost of goods sold, operating and financing expenses, profits, and his forecasts of cash flow. Select one: a. financial plan b. marketing c. production and operations d. management

A

The _____ section of the business plan describes the fundamental beliefs about what is and isn't appropriate in conducting company activities. Select one: a. "Core Values" b. "Mission Statement" c. "Dos and Don'ts" d. "Key Competencies"

A

The most important step in the process of starting a business is _____ Select one: a. creating a business plan b. getting financing c. generating a mission statement d. assembling a team of managers

A

The past two decades have seen a _____ in the number of businesses owned by women and minorities. Select one: a. substantial increase b. substantial decrease c. moderate decrease d. moderate increase

A

The final step in the process of starting a business is _____. Select one: a. getting your financing b. creating your business plan c. deciding if you need partners d. researching your customer base

A***

The goods-producing sector is home to only 23 percent of all small businesses, the majority of which are in _____. Select one: a. construction and manufacturing b. food service c. direct marketing d. retailing

A***

A survey conducted by the Wall Street Journal indicates that _____ have a more satisfying business experience. Select one: a. top-level executives b. small business owners c. franchise owners d. team members

B

In order to meet the financial needs for future business growth as well as current demands, TruWood Cabinet Makers must secure a business loan of $125,000 from a local bank. The loan committee has asked owner and general manager Jarret Jones to write a comprehensive business plan that meets all of First Security Bank's requirements for such a large loan. After a lot of research and careful writing, the plan is constructed and ready for presentation to the loan committee. Jones knows that busy loan officers don't have the time to read his entire plan and prefer instead a synopsis or a condensed version that summarizes it. To address this fact, Jones: Select one: a. limited his plan to 8-10 pages. b. included a well-written executive summary. c. turned the project over to a professional writer. d. thoroughly documented all research findings and projections.

B

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

B

Which of the following is the most common but riskiest option in becoming a small business owner? Select one: a. Marketing an unknown product b. Starting from scratch c. Obtaining a franchise d. Buying an existing business

B

_____ companies provide valuable services to _____ companies by acting as sales agents for their products. Select one: a. Large / small b. Small / large c. Wholesale / retail d. Entrepreneurial / corporate

B

75. If you purchase a business, it is lawful for the previous owner to set up a competing business that draws its former and your current customers away from you a. only by paying a stipulated fee b. any time he or she wants c. only after a stipulated time d. only in a mutually agreed-upon location

B ***

8. Entrepreneurs usually start _____, beginning with _____ resources. a. at the bottom / limited b. small / limited c. independently / specialized d. small / patented

B ***

Peter Jackson has included the résumés of his management team and a set of financial statements in his business plan. In what section of the plan will a bank officer find this information? Select one: a. "Financial Plan" b. "Appendices" c. "Development and Production" d. "Core Values"

B ***

When you believe in what you're doing and make a strong personal commitment to your business, you are displaying: Select one: a. a creative commitment to business management. b. a proper attitude toward business ownership. c. basic business know-how. d. an ethical attitude toward business conduct.

B***

A new business owner can expect to work _____ hours a week on average. Select one: a. 40 b. 50 c. 60 d. 70

C

Donna Graves has just completed research to determine the types of advertising to use in her proposed business. She will discuss advertising under the _____ heading in the "Marketing" section of her business plan. Select one: a. "Pricing" b. "Target Market" c. "Promotion" d. "Distribution"

C

Manufacturing is primarily the domain of _____ businesses. Select one: a. professional b. midsize c. large d. multinational

C

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

C

To be successful in business, you should: Select one: a. avoid changes. b. handle all aspects of your business yourself. c. keep an eye on competitors. d. become a specialist in one particular area of business.

C

Which of the following best describes entrepreneurs? Select one: a. They're usually onetime managers who open up a business for the sole purpose of providing an income for themselves and their family b. They're retired businesspeople working on a voluntary basis. c. They're risk takers who can adjust to changing situations. d. None of the above

C

Which of the following is among the disadvantages of small business ownership? Select one: a. lifestyle uncertainty b. steep learning curve c. heavy time commitment d. family values

C

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

D

When it has more than one ____, a business can operate as a partnership or a corporation. Select one: a. director b. location c. employee d. owner

D

Which of the following is among the rewards of being a small business owner? Select one: a. freedom from fiscal responsibility b. free time c. freedom from job-related stress d. lifestyle freedom

D

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

D***

As a business owner, you're in charge and can decide when and where you want to work. This managerial freedom best reflects the _____ advantage of small business ownership. Select one: a. financial b. intellectual c. time-management d. lifestyle

D.

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

b ***

16. There are more than 40 million small businesses in the United States.

false