Deck 3: Evaluation of a Business Opportunity

Question 1

Typically, in a service business, a major factor in generating revenue is:

A) equipment in good working condition.
B) office layout.
C) the expertise of the owner.
D) a suitable accounting system.

Answer 1

C

Question 2

One of the best ways to develop a new idea is to:

A) withdraw from your daily work and relax.
B) explore your own hobbies and areas of interest.
C) think about consumer habits and demands.
D) discuss with family and friends what they think you should do for a business.

Answer 2

C

Question 3

Two general types of information available to prospective small business owners are:

A) high-quality data and empirical data.
B) micro data and macro data.
C) paid data and free data.
D) primary data and secondary data.

Answer 3

D

Question 4

Normally, before writing a full business plan, entrepreneurs will:

A) ensure that they have enough funding to be successful.
B) visit a banker.
C) hire key position employees.
D) perform an opportunity assessment.

Question 5

If a business wishes to offer a product or service similar to one that is already in the market, they should:

A) try to compete on the basis of price.
B) try to create a competitive advantage over the existing product or service.
C) forget about this idea because it rarely works out well.
D) try to make their product of service look the same as the existing product or service.

Question 6

Two important capabilities that an owner manager ought to have are:

A) public image and banking contacts.
B) good health and expertise in the fundamentals of management.
C) industry connections and knowledge.
D) pleasant personality and talent.

Question 7

In order to be successful, a business should ensure that it has:

A) ergonomic product design.
B) a competitive advantage.
C) environmentally friendly aspects.
D) a monopoly position.

Question 8

Businesses selling fad or novelty type products can succeed because these types of products:

A) are usually inexpensive.
B) have interesting operating characteristics.
C) are usually packaged in an appealing way.
D) satisfy emotional needs.

Question 9

Some aspects of business that are more difficult for small businesses are:

A) innovation and location.
B) flexibility and innovation.
C) price and location.
D) customer service and product quality.

Question 10

A business opportunity assessment includes consideration of:

A) the entrepreneur's ability to manage people.
B) the possibilities for family succession.
C) impact on the entrepreneur's home life.
D) competitive advantage.

Question 11

The entrepreneurial process outlined in the text includes:

A) management of the business.
B) finding partners.
C) developing quality of life goals.
D) developing a relationship with major competitors.

Question 12

Which is not a natural advantage for a small business?

A) Product quality
B) Customer service
C) Supplier volume
D) Innovation

Question 13

A focus group involves:

A) focusing a group of interested consumers on a new product.
B) asking questions to solicit participant responses.
C) an open, in-depth discussion.
D) a discussion among lenders and customers focused on pricing and payment terms.

Question 14

Offering a totally new product is:

A) generally a low-risk gamble.
B) the best way to dominate a market in the long term.
C) is a sure way to succeed.
D) one way to enter a market.

Question 15

The stages in the entrepreneurial process proceed:

A) in whatever order makes the most sense in the circumstances.
B) based on the entrepreneur's strengths.
C) simultaneously.
D) sequentially.

Question 16

One of the major causes of business failure is:

A) unbalanced experience.
B) wide ranging interests.
C) lack of family support.
D) strong imagination.

Question 17

Qualitative assessments look at:

A) non-quantitative factors.
B) cash flow numbers.
C) how well sales are doing for a particular product.
D) market dominance metrics.

Question 18

Which is not a source of new ideas indicated in the textbook?

A) Hobbies
B) Lifestyles
C) Observations
D) Occupations

Question 19

All businesses start with:

A) an idea.
B) a mature marketplace.
C) strong relationships.
D) a large sum of funds.

Question 20

A recent report suggested that future growth in the following areas would provide a good chance for success in the future:

A) supermarkets.
B) recreational campground development.
C) bookstores.
D) services for small businesses.

Question 21

Which is not a form of primary data?

A) Statistics Canada labour market surveys
B) Observation
C) Personal interviews
D) Internet surveys

Question 22

Market share means:

A) percentage of total market which a business controls.
B) ease of entry into a market by a new business.
C) the dollar volume of sales by the major business in a market.
D) the social responsibility of an industry with the communities in which it operates.

Question 23

Most provincial and territorial governments use to assist small businesses.

A) case studies
B) online chat facilities
C) Skype
D) small business consultants

Question 24

Test marketing involves:

A) putting product into an existing outlet.
B) sending surveys to a significant number of customers in the industry.
C) asking potential customers how much they would pay for the product.
D) simulating an actual market situation.

Question 25

An important part of a feasibility analysis for a manufacturing business is:

A) the ease of the manufacturing process.
B) the financial break-even point.
C) the relative newness of the product.
D) the total dollars invested by owners.

Question 26

The purpose of calculating market potential is:

A) to estimate the total amount of selling space in the market devoted to the merchandise the new business will sell.
B) to calculate the market share based on selling space.
C) to arrive at a dollar or unit sales estimate for the total market.
D) to estimate the percentage of the total market potential the proposed business will obtain.

Question 27

The breakdown method refers to:

A) eliminating a demographic.
B) quality control.
C) impact of a product on customer relationships.
D) testing a product for incidence of breakdowns.