Question 1

The reality that small businesses train people to become better leaders and managers and to develop their talents and energies more effectively has led more college graduates to seek full-time jobs with small businesses.

Accepted Answer

This statement is true. Small businesses often have a more hands-on approach to training and development, and the opportunity for employees to take on a variety of roles and responsibilities can lead to better leadership and management skills. This can be attractive to college graduates looking for a challenging and diverse work environment.

Question 2

Which of the following is the main goal of an incubation program?

Accepted Answer

The main goal of an incubation program is to provide support to startup businesses to help them become financially viable and independent enough to stand on their own. While some incubation programs may provide financial assistance or help procure equipment, these are typically secondary goals to the main objective of producing successful businesses. Therefore, option D is the best choice.

Question 3

A small business is one that is independently owned and operated and is dominant in its field of operation.

Accepted Answer

A small business may be independently owned and operated, but it is not necessarily dominant in its field of operation. In fact, many small businesses operate in highly competitive markets where there are dominant players.

Question 4

One of the unique contributions of small businesses is that they keep larger firms competitive.

Accepted Answer

Small businesses often bring new ideas, products, and services to the market, which in turn can push larger firms to innovate and stay competitive. Additionally, small businesses can provide a more personalized and localized experience to customers, which can be challenging for larger firms to replicate.

Question 5

Mark had opened a café in his neighborhood. Soon his café became very popular and his revenues started increasing. Steve, the owner of a popular restaurant saw Mark's success and asked him to join the restaurant. The financial incentive Steve offered Mark was more than what he earned at his café, and he would not have to face the daily hassles of managing everything on his own. He decided to shut down his café and join the restaurant. This is an example of:

Accepted Answer

Mark's decision to shut down his café and join the restaurant is an example of discontinuance, which refers to the voluntary closure of a business by the owner due to reasons such as better opportunities or personal reasons. It is not foreclosure, formal failure, or bankruptcy, as those refer to more negative situations where the business is unable to continue operations.

Question 6

_____ is a voluntary decision to terminate a business.

Accepted Answer

Discontinuance is the correct term for a voluntary decision to terminate a business. Foreclosure and bankruptcy are typically involuntary and involve legal action or proceedings. Formal failure is not a commonly used term in this context.

Question 7

An entrepreneurial venture may never grow large, and the owners may not want it to, as they prefer a more relaxed and less aggressive approach to running the business.

Accepted Answer

The answer of An entrepreneurial venture may never grow large,...

Question 8

Which of the following nurture young firms and help them to survive and grow during the startup period when they are most vulnerable?

Accepted Answer

Business incubators provide resources and support to early-stage startups, helping them to develop their products or services, refine their business models, secure funding, and build a solid foundation for sustained growth. Successful graduates, international trade organizations, and conglomerates are not specifically designed to nurture young firms during the startup period.

Question 9

Today more students think self-employment is a safer haven than working for big corporations.

Accepted Answer

According to recent surveys and studies, an increasing number of students are considering self-employment as a viable career option, as they perceive it to be more secure and flexible than working for large corporations.

Question 10

Small firms generate most new private employment.

Accepted Answer

According to various studies and statistics, small firms are responsible for creating the majority of new jobs in the private sector.

Question 11

John opened All-for-Shop, a small retail outlet in his neighborhood. He could not sustain it for more than a year because of huge losses and chose to shut it down. Fortunately, he did not have any creditors. Which of the following does the situation describe?

Accepted Answer

The situation describes a personal failure, as John's retail outlet did not succeed and he chose to shut it down. There is no mention of formal failure, foreclosure, or Chapter 7 bankruptcy, and there were no creditors involved, indicating that John's failure was personal in nature.

Question 12

Which of the following is true about the first stage of the growth pattern that small businesses tend to follow?

Accepted Answer

In the first stage of a small business's growth pattern, the owners typically manage the business and perform all the work themselves. This stage is characterized by the business being very small, with the owner(s) directly involved in all aspects of the operation.

Question 13

Which of the following is true about the typical growth pattern of a small business?

Accepted Answer

Professional managers in small companies often move between companies to advance in their careers and increase their earnings, as small businesses may have limited opportunities for upward mobility within the same company.

Question 14

Which of the following is true about the final stage of the growth pattern that small businesses tend to follow?

Accepted Answer

The final stage of the growth pattern for small businesses is characterized by the owner hiring managers to run the firm. This allows the owner to step back from day-to-day operations and focus on long-term strategy and growth. Option A is incorrect because it is characteristic of the early stages of a small business when the owner is performing all tasks. Option B is a later stage where the owner hires more employees but still manages the company. Option D is not a typical approach in the final stage, as outsourcing supervisory work can be costly and may not provide the necessary level of control for the owner.

Question 15

Managers of small firms must be specialists rather than generalists.

Accepted Answer

Managers of small firms often need to be generalists because they typically handle a wide range of tasks across different business functions due to limited staff and resources.

Question 16

The growth rate of the general workforce is always greater than the growth rate of self-employment.

Accepted Answer

This statement is not necessarily true as the growth rate of self-employment can surpass the growth rate of the general workforce, depending on various factors such as economic conditions, technological advancements and cultural attitudes towards entrepreneurship.

Question 17

Which of the following does a business incubator do to help small business owners succeed?

Accepted Answer

Business incubators provide management assistance and shared office services to help small business owners succeed by providing guidance, mentorship, and resources for the development and growth of their businesses. The other options are not typically services provided by business incubators.

Question 18

Employees in large workplaces have higher job satisfaction than those in smaller firms.

Accepted Answer

Research often shows that job satisfaction is influenced by factors such as job design, management style, workplace culture, and personal fulfillment, rather than the size of the firm. Employees in smaller firms may experience closer relationships with their colleagues and a greater sense of impact in their roles, which can lead to higher job satisfaction.

Question 19

Which of the following is true about failure and small businesses?

Accepted Answer

A discontinuance, or the closure of a small business, can result from various factors including the owner or founders deciding to work for someone else, lack of funding or resources, or simply not being able to compete in the marketplace. Personal failures (such as personal bankruptcy) can also result in the failure of a small business, but it is not the only or most common reason. Formal failures typically refer to legal processes such as bankruptcy, and while they do happen, they are not more numerous than personal failures. Lawsuits from creditors can certainly contribute to a small business's downfall, but it is not always the primary reason.

Question 20

A small business provides employees with a variety of learning experiences not open to individuals holding more specialized jobs in larger companies.

Accepted Answer

Small businesses typically have fewer employees and may offer cross-training opportunities or exposure to multiple areas of the business, allowing for more diverse learning experiences for employees. Larger companies may have more specialized roles and less flexibility in job duties for employees.

Quiz 1: Starting Your Small Business