Deck 20: Achieving Success in the Small Business

Question 1

Successions and business sales generally occur only among the largest small businesses.

Answer 1

True

Question 2

CSFs are important because they come from sources external to entrepreneurs.

Answer 2

True

Question 3

From a marketing standpoint,in the introduction stage,the more innovative a product,the higher the sales.

Answer 3

False

Question 4

All products invariably survive the introduction phase of the product life cycle.

Question 5

Liquidity enhancement is an estate planning strategy which focuses on generating cash to cover likely estate taxes.

Question 6

In the hierarchy of business outcomes,the worst possible outcome is leaving the firm with no debt.

Question 7

Businesses starting with no start-up capital and those starting with more than $50,000 are the least likely to survive long term.

Question 8

People who open multiple businesses throughout their career are called unsatisfied entrepreneurs.

Question 9

When one firm absorbs another through a purchase,it is called a merger.

Question 10

For most small businesses existence will follow the success stage.

Question 11

Survival is the second riskiest period after emergence.

Question 12

Critical success factors (CSF)are by definition those practices that should be avoided to succeed in a given industry.

Question 13

The resource maturity stage is characterized by a stable level of sales and profits over several years.

Question 14

One of the ways harvests take place is through initial public offering or IPO.

Question 15

According to the rule of thumb in the resource maturity stage,keeping an existing customer costs five times as much as getting a new customer.

Question 16

Most small businesses never go through the takeoff stage.

Question 17

All models for the life cycle of the small business firm have multiple stages.

Question 18

Bankruptcy is an illegal form of insolvency.

Question 19

The single most typical way businesses close down is by a walkaway.

Question 20

Terminations are more likely for young firms that are four years old or less.

Question 21

Which of the following is a common idea among the different models for the life cycle of the small business firm?

A) There are multiple stages in all models of the life cycle of the small business firm.
B) Every business invariably passes through the same stages of the life cycle.
C) The level of risk the business faces remains constant from stage to stage.
D) Businesses face the same issues in each stage.

Question 22

Which of the following terms refers to the profits that are available to be used to satisfy the preferences of the owner in how the business is run?

A) Slack resources
B) Liability of newness
C) Takeoff
D) Depreciated assets

Question 23

Which of the following components,as suggested by Zig Ziglar,involves staying in touch with customers on a regular basis via visits,phone calls,e-mails,newsletters,and so on?

A) Urgency
B) Frequency
C) Potency
D) Recommendations

Question 24

Which of the following profits are called flexibility for most owners?

A) Slack resources
B) Marginal resources
C) Resource maturity profits
D) Takeoff profits

Question 25

In the context of the four key components for staving off customer complacency,as suggested by Zig Ziglar,a message that is remembered and remembered for the right reasons is said to be:

A) insistent.
B) recent.
C) frequent.
D) potent.

Question 26

Profits which are not taken in the form of money are known as:

A) liabilities of newness.
B) slack resources.
C) takeoffs.
D) current liabilities.

Question 27

In a business life cycle,_____ is the second riskiest period after emergence.

A) success
B) resource maturity
C) existence
D) takeoff

Question 28

Supplemental profits are intended to equal and replace the salary or wages the entrepreneur could draw working for someone else.

Question 29

The existence stage is defined by:

A) a period of exceptional growth.
B) a stable level of sales,profits,and guarantee of sales.
C) thoughts about starting a business.
D) a lack of stability in terms of markets,operations,or finances.

Question 30

Which of the following has been observed about the emergence stage of a small business life cycle?

A) Typically,fewer people think about starting a firm than actually take steps to do so.
B) Getting from entrepreneurial action to entrepreneurial thinking is the challenge of the emergence stage.
C) The emergence stage is characterized by a person thinking about and taking actions toward starting a firm.
D) Getting into business part time does not lead to future entrepreneurial action.

Question 31

Which of the following statements is true regarding the success stage of the small firm life cycle?

A) Firms develop the information,skills,and the routines to grow the business's profits.
B) Profits are invariably taken in the form of money.
C) For most small business owners,this is the stage that follows takeoff.
D) Firms face the liabilities of newness in this stage.

Question 32

Which of the following attributes is most likely to be associated with the existence stage of a small business life cycle?

A) A business idea which is yet to begin operating
B) A clear set of overhead costs
C) Guarantee of sales
D) Absence of risk

Question 33

Which of the following is true of the emergence stage of a business life cycle?

A) Emergence is the stage in which a person thinks about and takes actions toward closing down a firm.
B) Getting from entrepreneurial thinking to entrepreneurial action is the challenge of the emergence stage.
C) Having the business in operation,but not yet stable in terms of markets,operations,or finances is the primary characteristic of the emergence stage.
D) In a business life cycle the emergence stage takes place after the survival stage.

Question 34

Which of the following is true regarding the stages in a business life cycle for most small businesses?

A) The stage of success is followed by survival.
B) Survival is the last stage of the cycle.
C) Existence is the first stage of cycle.
D) Resource maturity follows success stage.

Question 35

Which of the following is a key component for staving off customer complacency,as suggested by Zig Ziglar,that refers to being among the people the customers have seen in the past few days?

A) Recency
B) Urgency
C) Frequency
D) Potency

Question 36

Success profits are intended as a secondary income for the entrepreneur,who has another job which provides his or her main income.

Question 37

Which of the following is a challenge of the resource maturity stage?

A) Developing the information,skills,and the routines to grow the business's profits
B) Collecting profits in the form of money
C) Avoiding complacency
D) Avoiding adaptation by offering competitive products or services

Question 38

Which of the following terms refers to the set of risks faced by firms early in their life cycles that come from a lack of knowledge by the owners about the business they are in and by customers about the new business?

A) Slack resource
B) Walkaway
C) Liability of newness
D) CSF

Question 39

For most small businesses,the _____ will follow the success stage.

A) takeoff stage
B) resource maturity stage
C) existence stage
D) survival stage

Question 40

For most owners of firms,the solution for liabilities of newness lies in:

A) ignoring the lack of information or experience in marketing,production,and management.
B) getting expertise as quickly as possible.
C) getting more experience personally,even if it takes a long time.
D) avoiding an extensive social network.

Question 41

From a marketing standpoint,the more innovative the product:

A) the more are the customers that are comfortable with such products.
B) the slower the sales of that product.
C) the lesser the importance of relative advantage of that product over others.
D) the more is the possibility of immediate profits for that product.

Question 42

_____ often represents an owner's last major return from a firm and a key pool of money for retirement or further businesses.

A) Transfer
B) Harvest
C) Franchising
D) Consolidation

Question 43

Which of the following is a characteristic of the growth stage of the product life cycle?

A) During this stage,acceptance of imitative products increases rapidly while it drops for innovative products.
B) Prices of products in this stage tend to rise as production becomes more efficient.
C) Prices of products in this stage tend to drop as competition decreases.
D) Sales and profits during this stage grow at higher rates than at any other part of the product life cycle.

Question 44

Royal Twirl,a coffee roasting and distribution company,has observed that its sales are high,but growth has slowed down.The company decides to introduce a variant for the health-conscious coffee-drinkers which claims to help them reduce weight by increasing their metabolism.In which of the following stages is Royal Twirl?

A) Introduction stage
B) Growth stage
C) Maturity stage
D) Decline stage

Question 45

Which of the following statements points out the similarity between a product life cycle and a service life cycle accurately?

A) The ease of making on-the-run changes for products and services is the same.
B) Both products and services feature have an equal possibility of extending the life cycle.
C) Both products and services will take a little time to attract customers.
D) The ease of eliminating the decline stage of both products and services is similar.

Question 46

Which of the following terms refers to the recovery of value through the sale of a firm or its assets?

A) Harvest
B) Invest
C) Transfer
D) Franchise

Question 47

During the _____,acceptance of the product (whether innovative or imitative)increases rapidly.

A) growth stage
B) emergence stage
C) decline stage
D) introduction stage

Question 48

Which of the following is the best strategy for Silken Glow to follow to retain market share for the long term?

A) Show how well the shaver co-exists with other products the customer owns.
B) Allow sales and profits to drop temporarily.
C) Have new ideas in the pipeline now and get them ready for commercialization.
D) Produce more shavers as the demand from new users is expected to rise.

Question 49

Which of the following events precedes the maturity stage of the product life cycle?

A) The product starts incurring heavy losses.
B) Rapid growth begins to slow down.
C) Production becomes less efficient.
D) Acceptance of the product decreases rapidly.

Question 50

Which of the following is an example of a product reaching the decline stage?

A) Customers switching from CRT television sets to flat panel television sets
B) Decrease in demand for carbonated drinks
C) Falling demand for ice cream in the cold season
D) Decrease in prices of electronic goods during a sale

Question 51

Which of the following inferences can be made from the life cycle model of business?

A) Resource maturity is the first stage in the life cycle of most of the small businesses.
B) Much of the firm's development as a business is predictable within some broad terms.
C) Most of the small businesses go through the takeoff stage.
D) The study of the life cycle model of business shows that the jump from the success stage to the resource maturity stage is impossible.

Question 52

Which of the following statements describes the introduction stage of the product life cycle accurately?

A) All products survive the introduction phase of the product life cycle.
B) This stage of the product life cycle comes immediately prior to the maturity stage.
C) Providing samples or demonstration opportunities hinders the acceptance of the product during this phase.
D) Products that are successfully revised move on to the growth stage.

Question 53

In which of the following stages do businesses try to cut costs and pare back their product lines?

A) Introduction stage
B) Growth stage
C) Maturity stage
D) Decline stage

Question 54

Most small businesses never go through the _____ stage.

A) takeoff
B) resource maturity
C) emergence
D) survival

Question 55

In which of the following stages do sales level off,and profits follow suit?

A) Introduction stage
B) Growth stage
C) Maturity stage
D) Decline stage

Question 56

Which of the following is the best strategy for Silken Glow to follow to retain market share for the short term?

A) Show how easy the shaver is to use.
B) Show how well the shaver co-exists with other products the customer owns.
C) Advertise how the shaver makes women's lives better.
D) Offer a coupon or rebate with every pack of the shaver.

Question 57

Which of the following stages involves working extensively with potential sources of funding and other key resources,as well as working with markets outside and employees within the firm?

A) Survival
B) Resource maturity
C) Existence
D) Takeoff

Question 58

Which of the following is a feature of maturity-stage products?

A) Price competition starts to drop.
B) Manufacturers find ways to cut costs or introduce new features.
C) Competitors wait to see if the product is a threat and has staying power before they act.
D) Products begin to gain customer acceptance.

Question 59

Which of the following statements points out the difference between a product life cycle and a service life cycle accurately?

A) It is easier to extend the life cycle of a service than to extend the life cycle of a product.
B) Service changes can be done relatively more quickly than changes in products.
C) Services do not go through the growth stage.
D) It is possible to eliminate the decline stage of a product but it cannot be done for a service.

Question 60

Which of the following is true regarding the introduction stage of the product life cycle?

A) Traditional marketing techniques raise profits at the start more than they do at later stages.
B) The risks from competition in the introduction stage are generally high.
C) Most small businesses can only afford to launch a product on a small scale,so profits are not likely when a product emerges into the market.
D) Imitative products have a hard time gaining customer acceptance as customers are comfortable with innovative products.

Question 61

In a _____ the assets of a firm are sold to another business,with the proceeds used to pay off the firm's remaining debts,and perhaps leaving the owner some small profit.

A) workout
B) sell off
C) pass off
D) succession

Question 62

Transfer is that endgame strategy in which:

A) the owner closes down a business.
B) ownership is moved from one person or group to another.
C) value is recovered through a sale of a firm or its assets.
D) the last major return from the firm is pooled for retirement.

Question 63

Which of the following is a type of termination that is employed when the entrepreneur feels that the business was less than successful,usually because of the result of poor use of the firm's assets combined with an unsatisfying business experience?

A) Bankruptcy
B) Walkaway
C) Sell off
D) Workout

Question 64

Grantor retained annuity trusts are used in:

A) tax management.
B) liquidity enhancements.
C) estate freezes.
D) walkways.

Question 65

A transfer that happens when the owner realizes there is little chance of being able to sell the firm and gives the firm to someone as a gift,without compensation is called _____.

A) workout
B) sell off
C) pass off
D) succession

Question 66

A transfer method describing the first-time public sale of a stock listed on a public stock exchange is called a(n):

A) IPO.
B) ESOP.
C) consolidation.
D) termination.

Question 67

In the hierarchy of business outcomes,the worst possible outcome is:

A) sell off.
B) pass off.
C) walkaway.
D) bankruptcy.

Question 68

A business termination in which the entrepreneur ends the business with its obligations met is called a:

A) sell off.
B) workout.
C) pass off.
D) walkaway.

Question 69

Which of the following is a form of business termination that uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets?

A) Bankruptcy
B) Sell off
C) Walkaway
D) Workout

Question 70

When one firm absorbs another through purchase,it is called a(n):

A) merger.
B) acquisition.
C) transfer.
D) termination.

Question 71

Which of the following is a type of termination?

A) IPO
B) Workout
C) Pass off
D) Sell off

Question 72

A transfer method in which a small firm is bought by a larger firm for the purpose of quickly growing the larger firm is referred to as:

A) IPO.
B) ESOP.
C) consolidation.
D) termination.

Question 73

A(n)_____ is a formalized legal method to transfer some or all of the ownership of a business to its employees.

A) IPO
B) ESOP
C) consolidation
D) termination

Question 74

Sue,the owner of a small business which bakes and sells homemade butter cookies,plans to close down the business and leave the country.If Sue arranges to pay off all debts after the business is officially closed,which of the following methods of business termination is being used here?

A) Walkaway
B) Bankruptcy
C) Estate freeze
D) Workout

Question 75

In a successful walkaway:

A) contracts,leases,and the like are in effect.
B) employees are let go as they find other jobs.
C) ongoing lawsuits consume money and time.
D) assets or inventory are available.

Question 76

Tax management:

A) focuses on generating cash to cover likely estate taxes.
B) focuses on minimizing estate tax payments.
C) focuses on transferring assets to heirs when the asset costs are low.
D) focuses on giving the firm as a gift to someone who will keep the business a going concern.

Question 77

An endgame strategy in which the owner closes down a business is called:

A) IPO.
B) ESOP.
C) consolidation.
D) termination.

Question 78

Which of the following is a type of transfer?

A) Liquidation
B) Workout
C) Walkaway
D) Pass off

Question 79

_____ is an estate planning strategy which focuses on generating cash to cover likely estate taxes.

A) Liquidity enhancement
B) Tax management
C) Estate freeze
D) Transfer

Question 80

The popular name for a Chapter 13 bankruptcy in which a bankrupt firm continues to operate while paying off debts identified by the bankruptcy trustee is _____.

A) liquidation
B) amortization
C) reorganization
D) depreciation