Ch 7 Small Business Quiz
Rudy owns a small metal fabrication business that employs 23 workers. As the owner of a small business, one of the major advantages that Rudy will enjoy when competing against larger firms will be a lesser burden of complying with government regulations.
False
Which of the following statements is true of necessity entrepreneurship in high-income countries?
The rate of necessity entrepreneurship is low.
Which of the following is true of entrepreneurship?
The rate of such "necessity entrepreneurship" declines in higher-income countries.
In the context of the U.S. economy, small businesses:
are often the first to contract when times are tough.
A_________is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives
business plan
Relative to large businesses, small firms have:
lower overhead costs.
When a large company downsizes, some of the middle-aged and older workers who are laid off find it difficult to get another job. When such workers decide to start their own businesses, they are known as _____.
necessity entrepreneurs.
A large percentage of total start-up financing comes from:
personal resources
SCORE (Service Corps of Retired Executives) is an organization that:
provides free, comprehensive counseling for small businesses from qualified volunteers
Deb is offered a job with a start-up venture named Shop Maestro LLC, which is a retail company. Insurance is included in the pay offered to her. Deb declines the offer because the retail market is quite saturated. Which of the following small business threats was Deb worried about?
Shop Maestro may fail because its industry was not chosen carefully
Richard runs a supermarket "Home Needs" inherited from his father. This store faces tough competition from a large departmental store "Daily Plus"—located in the same neighborhood—owned by a reputed MNC. Which of the following competitive advantages does a small business like "Home Needs" have over a large firm like "Daily Plus"?
"Home Needs" can develop much more personal relationships with individual customers.
Which of the following bodies assists entrepreneurs by guaranteeing loans from local commercial lenders?
The Small Business Administration
Overhead costs for small businesses:
are often lower than they are for big companies, giving small businesses a competitive opportunity.
Which of the following is true of market niches?
INCORRECT: Market niches don't allow for businesses to develop personal relationships with individual customers
Local offices—affiliated with the Small Business Administration—that provide comprehensive management assistance to current and prospective small business owners are referred to as _____.
INCORRECT: SCORE (Service Corps of Retired Executives)
Which of the following is a drawback of buying a franchise?
If the national brand suffers, so does the franchisee
Which of the following is true of bank loans?
No conventional lending source—private or government—will lend 100% of the start-up dollars for a new business
Which of the following is an advantage of starting a business from scratch?
One does not have to deal with the prior owner's bad decisions and mistakes.
Marc and Daniel are wealthy individuals who finance new businesses which have a growth potential of 30 to 40% per year. In return, they seek a share of ownership in these businesses. Which of the following terms best describes them?
Angel investors
Which of the following is a similarity between venture capital firms and angel investors?
Both invest in start-up companies with high growth potential in exchange for a share of ownership.
Deborah dreams of owning a pub in the heart of the city she lives in. She wants to have a music band right next to the bar playing her favorite rock ballads. She also has creative ideas for the food on the menu. Since Deborah already has the funds needed to start the pub, which of the following suggestions is most likely to help Deborah realize her dream?
Deborah should start from scratch as that will allow her to implement her own concept, decision, and structure.
some days, he finds it difficult to put in any time. Which of the following entrepreneurial characteristics does Marion lack?
Energy
Martin's Gallery is a chain of stores that sells paintings. It was started by James Martin, an expert painter himself, in his early 20s. Now the stores are owned and managed by his grandson Dave. Which of the following terms best describes James Martin?
Entrepreneur
Which of the following is true of entrepreneurs?
Entrepreneurs have a deep-seated sense that they are personally responsible for what happens in their life.
Samuel, a student of an entrepreneur development program, has to prepare a presentation on "characteristics of entrepreneurs." If you were his mentor, which of the following characteristics would you suggest to be included in his presentation?
Entrepreneurs stay excited about their ideas, even when friends and relatives ridicule their ideas.
Which of the following statements is true of the impact of federal regulations on entrepreneurship?
Extensive regulations can impede entrepreneurship
Which of the following is detrimental to entrepreneurs?
External locus of control
David is a high school senior interested in starting his own computer repair business. David's interest in starting his own business will have no effect on the long-term recovery of the economy.
False
Which of the following is an intimidating difficulty that small businesses face?
High health insurance costs
Which of the following is true of entrepreneurship?
INCORRECT: The chances of getting really rich is higher for an individual working as an employee than an entrepreneur
Jacob recently retired from his job as a general manager. He is looking for a funding option for his new venture, which will allow him to raise required money as soon as possible, with limited paperwork and risk. Apart from these criteria, he also wants complete ownership in his business. The most appropriate way to fund his new venture is to:
INCORRECT: approach a bank for a loan.
Which of the following pieces of information is found in the Small Business Administration (SBA) resources?
Industry-specific statistics
Which of the following permits unrestricted scope for creativity among entrepreneurs?
Starting a business from scratch
Which of the following firms supported by the Small Business Administration (SBA) provides free, comprehensive counseling for small businesses from qualified volunteers?
The Service Corps of Retired Executives
Which of the following is true of necessity entrepreneurs?
They launch their business because they believe it is their only economic option
Who among the following individuals is most likely to become a necessity entrepreneur?
Timo, an immigrant engineer who is driven to think about his own venture because his heavy English accent invites discrimination at his office
Dominic feels that an incredible string of bad luck has affected his personal life. He also feels that his boss is subjecting him to unfair treatment at work for no fault of his own. Dominic's perceptions suggest that he has an external locus of control.
True
For entrepreneurs, there is usually a correlation between dollars earned and hours worked.
True
The Small Business Administration microloan program lends an average of $13,000 to start-up businesses through community nonprofit organizations.
True
Entrepreneurs find new solutions to old problems and develop new products that people didn't even realize they needed. These entrepreneurs are said to have _____.
Vision
Xavi develops a cell phone battery that can be charged by a solar panel and can run efficiently for up to three hours. His friends point out that it would be difficult to get cell phone manufacturers to adopt this new technology and that it could take a long time for people to start relying on it. However, Xavi is convinced that he can make his idea popular and successful. He plans to start a new company called EnerMob Inc. that would promote and sell the cell phone battery to the public. In this scenario, Xavi is said to be demonstrating _____.
Vision
Which of the following is a powerful contribution made by small businesses to the U.S. economy?
Vitalizing inner cities
Damien is a programmer in a software firm. He has recently received a promotion and an annual bonus. He believes that this is a result of random luck as he does not work very hard. Damien has _____.
an external locus of control
The primary reason many people become entrepreneurs is to:
make more money.
After being laid off from her job as a financial consultant 2 years ago, Emily found it impossible to get another job. She finally used her savings to start and manage an apparel store that allowed her to leverage her talent and interest in fashion. This has been her only source of income for a long time now. Emily is an example of a(n):
necessity entrepreneur