Question 1

The size of the world market is about:

Accepted Answer

The current estimated population of the world is over 7 billion, so option B is the correct answer. Options A and C are far too low, while option D is an overestimation as the world GDP (Gross Domestic Product) is only around $85 trillion.

Question 2

Ameet's three employees have been with him since he started Employment Recruiters, Inc., nearly 10 years ago. As he contemplates the staffing for his new branch office, he senses that none of these three are ready to manage the office. Faced with this difficult situation, he should:

Accepted Answer

It is important to prioritize the success and growth of the business. While Ameet may appreciate the loyalty and commitment of his current employees, putting unprepared individuals in management positions could hurt the business. Running the new branch himself may not be sustainable and may limit the potential for growth. Appointing all three to the new branch without proper management experience could also cause issues. The best solution would be to hire a new, qualified employee to manage the office and potentially provide training or mentorship opportunities for the current employees to eventually develop their management skills.

Question 3

After retiring as a telecommunications executive, Chad joined SCORE. As a SCORE counselor Chad will:

Accepted Answer

As a SCORE counselor, Chad's primary responsibility would be to provide consulting services to small businesses for free. This is the main function of SCORE, which is a nonprofit organization that aims to mentor and support small business owners and entrepreneurs. While Chad may occasionally provide advice or guidance to high school students or help with product development, his main role would be to work with small business owners to help them succeed.

Question 4

Christine recently applied for a microloan from the SBA. Although several criteria are important, the Small Business Administration's decision to grant or deny the loan will largely depend upon:

Accepted Answer

The answer of Christine recently applied for a microloan from...

Question 5

In order to finance The Shortbread Shack, a mobile bakery business that services several large Silicon Valley companies, Marcy demonstrated her steadfast desire to get her bakery off the ground by visiting several bankers with _____________

Accepted Answer

Visiting bankers would require Marcy to provide a solid business plan in order to secure financing for her mobile bakery business. Without a well-prepared business plan, she would not be able to demonstrate the potential of her business to the bankers.

Question 6

After Kate graduated from college, her grandfather created a bookkeeping position for her in his furniture retail business. Her older brother is in charge of purchasing inventory for the store, yet often the store runs out of popular furniture or becomes overstocked with pieces that must be marked down to be sold. Kate is confident that her brother is more suited for handling accounting and finance, while she has a sense of what sells and how much sells. Although she has spoken with her grandfather about it a couple of times, he seems reluctant to change. As the founder of the business, he may:

Accepted Answer

The most likely reason for Kate's grandfather to be reluctant to change is because he may find it difficult to remove a family member from a position, even if it is not good for the business. It is common for family business owners to prioritize family relationships over business performance, which can lead to problems in the long run.

Question 7

After several years of volunteering to play the piano and sing at a local nursing home, Callie decided the time was right to tap into the growing elder care market. She started Music and Memories, Inc., a nonprofit corporation that would hire local talent to perform her own music productions directed toward this market. In order to write and produce several productions each year, Callie needed start-up funds. An instructor at the local community college suggested that she begin by ______________, because this effort would help introduce her idea to interested investors as well as suggest government grant applications that Callie might pursue

Accepted Answer

Starting a nonprofit corporation requires careful planning and preparation. Developing a business plan will not only help Callie secure funding but will also allow her to define her goals, target audience, and marketing strategies. It will also outline expected expenses and potential revenue streams. This information will prove invaluable when seeking investors or pursuing government grants. Therefore, preparing a business plan is the first step Callie should take.

Question 8

In order to improve his chances of small business success, Demitri prepared a business plan. Most often, a positive outcome of this exercise is:

Accepted Answer

The purpose of preparing a business plan is to carefully consider all aspects of the business idea, including market research, financial projections, and operational strategies. It allows the entrepreneur to identify potential challenges and opportunities, and to develop a solid roadmap for success. While a well-prepared business plan may increase the likelihood of securing financing, meeting federal requirements, and avoiding failure, these are not the primary goals of the exercise.

Question 9

Increased participation in small business exporting owes credit to _________

Accepted Answer

Technological advances such as the Internet and PayPal have made it easier for small businesses to safely fulfill orders and conduct transactions in international markets, contributing to increased participation in small business exporting. Political constituents, large events, and partnerships with large businesses may also play a role, but they are not as significant as the technological advances.

Question 10

One reason why many U.S. small businesses are not involved in exporting is:

Accepted Answer

The given options suggest that there are limited markets for U.S. small businesses, government programs limit opportunities or U.S. products are inferior, however, none of these point out why small businesses are not exporting. The only feasible reason among the given options is that these firms do not know how to get started with exporting. Lack of knowledge about international markets, regulations, and procedures hinders small businesses from venturing into exporting.

Question 11

Ben got a phone call from one of his regular customers asking if he had time to repair a couple of broken sprinkler heads on the customer's underground sprinkling system. Although it was already 6:00 p.m. and Ben had put in a full day of work, he turned his car around and headed for the customer's house. As a small business owner, Ben demonstrates:

Accepted Answer

Ben's willingness to go the extra mile for his regular customer shows that he values customer satisfaction and is willing to adapt and respond to their needs. This is a key trait of successful small business owners. The other choices are not supported by the information given in the scenario.

Question 12

Nigel came to the U.S. on a swimming scholarship. After a few months of frustration with trying to find swim goggles like he used in his native country, he started a website that offered specialty goggles for swimming, skiing, and snowboarding. Before launching the website and filling orders, Nigel spent a few months going to swim meets and gathering preferences about goggles from other swimmers. Nigel's actions:

Accepted Answer

The answer of Nigel came to the U.S. on a...

Question 13

Chris is an angel investor. This means that he:

Accepted Answer

As an angel investor, Chris invests his own money in new businesses with the potential for growth, hoping for a good return on his investment if the company goes public. This is the definition of an angel investor. The other options do not accurately describe the role of an angel investor.

Question 14

The SBA's ________ program provides export-financing opportunities for small businesses

Accepted Answer

The Export Express loan program by SBA is designed to help small businesses access capital quickly to support export transactions. It provides export-financing opportunities for small businesses. Options A, B, and D are not relevant to export financing for small businesses.

Question 15

Small businesses often have advantages in international markets. One advantage is:

Accepted Answer

Small businesses are more likely to offer personalized customer service compared to large corporations, which can be a valuable advantage in international markets where relationships and trust are important. This can set them apart from impersonal corporate bureaucracies and help to establish long-term relationships with international clients. A, B, and D are not necessarily advantages that small businesses have in international markets.

Question 16

As a small business owner, Tanika can't afford to provide her employees with the high wages and benefits offered by big corporations. One way to retain her employees and create a high level of motivation would be to:

Accepted Answer

Empowering employees to develop their own ideas can create ownership of their work and a sense of pride in their contributions, leading to higher levels of motivation and retention. It also demonstrates trust in their abilities and fosters a sense of collaboration and teamwork, which can enhance overall productivity and job satisfaction. Option A is demotivating and can create a negative work environment. Option B may not necessarily reward merit and can be demotivating to those who are not promoted. Option D is not ethical or fair to other potential candidates and may not necessarily result in higher levels of loyalty or motivation.

Question 17

Which of the following best describes the outlook for small businesses in international markets?

Accepted Answer

The world is a larger market than the U.S. domestic market, offering small businesses the potential for increased revenue and profitability. With advancements in technology and transportation, international trade has become easier and more accessible for small businesses. However, small businesses need to carefully research and understand the cultural and legal differences of the countries they wish to do business with, in order to be successful.

Question 18

Which of the following is not a recommended source of small business advice for persons contemplating a new business?

Accepted Answer

The answer of Which of the following is not a...

Question 19

One of the hurdles small businesses face when deciding to export is:

Accepted Answer

Financing can be a challenge for small businesses looking to export due to the potential cost of international transactions and the need for upfront capital to invest in exporting activities such as marketing, logistics, and compliance with foreign regulations.

Question 20

As a high net worth individual, Allison searches for growth firms in need of additional funding to achieve their goals. In return for this ____________, Allison expects to assume ownership in the business

Accepted Answer

The term "additional funding" and "assume ownership in the business" in the sentence suggest that Allison is offering venture capital. This means she is investing in high-risk startups or early-stage companies with potential for growth and in return, she will own a percentage of the business.

Quiz 6: Entrepreneurship and Starting a Small Business