Deck 5: Small Business, Entrepreneurship, and Franchises

Question 1

To qualify as a small business, a manufacturing plant can employ no more than ____ people.

A) 500
B) 1,000
C) 2,000
D) 3,000
E) 3,500

Answer 1

A

Question 2

A company generally needs more than ____ employees in order to be considered large.

A) 50
B) 100
C) 300
D) 500
E) 1,000

Answer 2

D

Question 3

Personal Wellness
Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness.
Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing.
Refer to Personal Wellness.Personal Wellness can be classified as operating in what type of industry?

A) Service
B) Production
C) Manufacturing
D) Distribution
E) Wholesaling

Answer 3

D

Question 4

A small business is all of the following except

A) independently owned.
B) operated for profit.
C) dominant in its field.
D) difficult to manage.
E) demanding of the owner's time and attention.

Question 5

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
Refer to Mc-King Chicken.Which of the following would not be an advantage of a franchise?

A) He gains fast and well-controlled distribution.
B) He has more capital available to expand.
C) Outlets are maintained and operated according to a set plan.
D) He has the opportunity to start a business with limited capital.
E) Success will cause another outlet to be opened nearby.

Question 6

Personal Wellness
Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness.
Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing.
Refer to Personal Wellness.A business plan should answer all of the following questions except

A) "Which accounting firm will audit the company?"
B) "What exactly is the nature and mission of the new venture?"
C) "Why is this new enterprise a good idea?"
D) "How much will the new venture cost?"
E) "What are the entrepreneur's goals?"

Question 7

To qualify as a small business, an agricultural company's maximum annual receipts must be no more than

A) €500,000.
B) €9 million.
C) €800,000.
D) €1 million.
E) €750,000.

Question 8

Which of the following organisations would be considered a small business?

A) Producer of semiconductors with 2,000 employees
B) Wholesaler with 50 employees
C) Retail clothing store chain with annual sales of €26 million
D) Construction company with average annual receipts of €32 million
E) Farmer with annual receipts of €10 million

Question 9

Personal Wellness
Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness.
Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing.
Refer to Personal Wellness.What is the least likely reason that Personal Wellness would possibly fail?

A) Capital
B) Employees
C) Management
D) Money
E) Planning

Question 10

Michael Tucker operates Tucker Farms in northern France.Last year, his annual receipts were just under €750,000.According to the Small Business Administration, Tucker Farms is a

A) small business.
B) medium-sized business.
C) large business.
D) franchise.
E) joint venture.

Question 11

Personal Wellness
Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness.
Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing.
Refer to Personal Wellness.In preparing the business plan, Angela would have incorporated all of these components except

A) company and industry descriptions.
B) an exit strategy.
C) government regulations.
D) benefits to the community.
E) a marketing plan.

Question 12

What is the primary reason that so many new businesses fail?

A) Owner does not work hard enough
B) Mismanagement resulting from lack of business know-how
C) Low employee quality for new businesses
D) Lack of brand-name recognition
E) Inability to compete with well-established brand names

Question 13

To qualify as a small business, a retailing establishment may not exceed annual sales of

A) €1.2 million to €4 million.
B) €2.6 million to €5 million.
C) €3 million to €6 million.
D) €7 million.
E) €12.5 million.

Question 14

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
Refer to Mc-King Chicken.The international agency advising Mc-King would have made which of the following recommendations?

A) Be aware that less money is needed to fund international operations.
B) Remember that strong local management is needed to keep an international franchise going.
C) Plan for the local competition to be weak.
D) Assume that customers everywhere need or want what the franchise offers.
E) Expect hiring, training, and marketing practices to be identical in all countries.

Question 15

Personal Wellness
Angela has been working for a local small business called Personal Wellness for the last three years.It is a retail business that sells sporting goods equipment.When she started her job, she noticed several things as causes of the business not doing as well as the owners were expecting.Angela has been thinking of starting her own small business because she feels she has learned a great deal through working for Personal Wellness.
Due to her education, attention to detail, and organisation skills, Angela's manager asked her to create a business plan for Personal Wellness.The manager hoped that this plan would help organise, structure, and focus the business.As part of the plan, Angela suggested that Personal Wellness contact a group of senior and graduate students to provide management counselling for the company as she is concerned that her leaving the company may be detrimental to the slow, but forward, progress that the company is making and her connection with the owners is strong.Angela's most immediate concern is keeping the business from failing.
Refer to Personal Wellness.When Angela suggested that the company contact a group, what type of group was she referring to?

A) Strategic institute
B) Small-business institute
C) HR institute
D) Management institute
E) Business institute

Question 16

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
Refer to Mc-King Chicken.Which of the following would be an advantage for Brian?

A) Guidance from the franchisor
B) Franchise holders paying for their security
C) Disagreements increasing
D) Contract disputes
E) The franchisor maintaining a great deal of control

Question 17

Mary's cleaning business has several customers but is not dominant in its field.This is an example of a(n) ____ business.

A) Entrepreneurship
B) Unsuccessful
C) Small
D) manufacturing
E) large corporate

Question 18

Approximately how many businesses are there in a large nation?

A) 960,000
B) 11.8 million
C) 27.5 million
D) 1.05 billion
E) 4 billion

Question 19

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
Refer to Mc-King Chicken.When Brian opens the Mc-King Chicken restaurant in his town, he would be known as the

A) franchisor.
B) franchising.
C) franchise.
D) franchisee.
E) franchises.

Question 20

Mc-King Chicken
Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant.
Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided it would go ahead with its decision to expand internationally.
Refer to Mc-King Chicken.The international agency advising Mc-King would have recommended that it do all of the following except

A) understand the laws and regulations governing franchising in each country.
B) understand that management must be from the home country to teach the new employees the way things are done.
C) thoroughly research the competitive situation.
D) check trade laws before buying a franchise in another country.
E) find out what support the franchisor offers in each country.

Question 21

Businesses such as flower shops, restaurants, bed and breakfasts, and automobile repair are good candidates for entrepreneurs because they

A) do not require any skills.
B) are the most likely to succeed.
C) can obtain financing easily.
D) require no special equipment.
E) have a relatively low initial investment.

Question 22

Nathan's business constructs storage sheds for new housing developments as requested by the builders.Nathan's business would best be classified as a

A) service business.
B) retailer.
C) distribution business.
D) production business.
E) wholesaler.

Question 23

Production industries make up approximately what percentage of all small businesses?

A) 5
B) 10
C) 19
D) 31
E) 41

Question 24

Which of the following is the most likely example of a production industry?

A) Wholesale outlet
B) Retail outlet
C) Financial enterprise
D) Subassembly plant
E) Transportation company

Question 25

Which of the following would most likely be classified as a distribution industry?

A) Subassembly plant
B) TV repair shop
C) Insurance agency
D) Grocery store
E) Medical office

Question 26

Price Waterhouse, a large accounting firm, would be most properly classified in the ____ industry, whereas a grocery store such as Kroger would be included in the ____ industry.

A) distribution; production
B) service; distribution
C) production; service
D) service; production
E) distribution; service

Question 27

Of the small businesses in the distribution industry, nearly three-quarters of them are involved in

A) wholesaling.
B) purchasing.
C) service.
D) retailing.
E) communications.

Question 28

Which of the following is not considered a category in the distribution industries?

A) Manufacturing
B) Wholesaling
C) Retailing
D) Transportation
E) Communications

Question 29

Approximately what percentage of the jobs in the UK do small businesses provide?

A) 5 percent
B) 10 percent
C) 30 percent
D) Over 50 percent
E) Nearly 90 percent

Question 30

Joe decides to start his own business designing websites for other businesses.Joe's business would be classified as a

A) distribution business.
B) retailer.
C) production business.
D) wholesaling business.
E) service business.

Question 31

The main reason there are fewer production industries than distribution or service industries is that

A) there are few things production industries manufacture.
B) production industries have no market.
C) production industries need a large initial investment.
D) there is little chance for profit in production industries.
E) few people want to work in production industries.

Question 32

According to a recent survey, approximately what percentage of all new businesses can be expected to survive their first ten years?

A) 16
B) 23
C) 31
D) 46
E) 52

Question 33

Service industries account for ___ percent of all small businesses.

A) 29
B) 29
C) 48
D) 58
E) 66

Question 34

Dana owns and operates a catering business.This is an example of a

A) distribution business.
B) production business.
C) service business.
D) retailer.
E) manufacturer.

Question 35

Ben has been thinking about going into business.However, he has discounted entering automobile manufacturing because it

A) requires little skill and knowledge.
B) is not a part of the production industry.
C) requires huge investments in machinery and equipment.
D) is unprofitable.
E) requires by law a corporate form of business.

Question 36

The industry concerned with the movement of goods from producer to consumer is

A) service.
B) distribution.
C) production.
D) agriculture.
E) wholesaling.

Question 37

Businesses are generally placed into three broad categories: service industries, production industries, and ____ industries.

A) financial
B) manufacturing
C) distribution
D) transportation
E) retailing

Question 38

Megan's business sells souvenirs and craft items to tourists on a beach.This is an example of a ____ business.

A) Service
B) communication
C) production
D) distribution
E) wholesaling

Question 39

Distribution industries account for approximately what percentage of all small businesses?

A) 20
B) 25
C) 33
D) 55
E) 70

Question 40

Which of the following would least likely be started as a small business?

A) Flower shop
B) Restaurant
C) Electricity company
D) Landscaping business
E) Furniture repair store

Question 41

An individual's desire to create a new business is referred to as

A) the entrepreneurial spirit.
B) the desire for ownership.
C) self-determination.
D) self-evaluation.
E) the laissez-faire spirit.

Question 42

Janis starts a small quilting and embroidery business.She purchases a technologically advanced quilting machine and an embroidery machine for a combined €25,000.Her monthly payments on the equipment are €500, but she has only one client at this time.Janis is facing a potential

A) inventory flow problem.
B) cash-flow problem.
C) competitive advantage.
D) overexpansion problem.
E) advertising issue.

Question 43

The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of

A) employment.
B) competition.
C) technical innovation.
D) capital.
E) quality products.

Question 44

In the 1970s, Steve Jobs and Steve Wozniak, the founders of Apple Computer, Inc., were creative, free-spirited individuals who decided that being corporate underlings was not what they wanted from a career.They had an innovative idea for a product and desired to create their own business based on this idea.All of the following are factors that could have led them to go into business except

A) the independence.
B) the willingness to find and accept a challenge.
C) the desire to determine their own destiny.
D) the low risk and high rewards inherent in entrepreneurship.
E) entrepreneurial spirit.

Question 45

Which of the following is not a reason for starting a small business?

A) Desire to determine one's own destiny
B) Willingness to find and accept a challenge
C) Desire for a guaranteed financial return
D) Desire for independence
E) Desire to create a new business

Question 46

By age 26, Tom was a plant manager in the snack-foods division.By 33, he headed the division, one of the most profitable in the corporation.Eventually, however, the company decided to move its corporate offices.Although he loved the job and thought the work was great, Tom's lifestyle was awful.He was on the road so often that he was giving up much of his family life.Tom had also become disenchanted with corporate life.He saw that the closer one got to the top, the more vulnerable one's position became.Thus, Tom left the corporation to start his own snack-foods company.His thoughts and actions most clearly reveal his

A) entrepreneurial spirit.
B) need for independence.
C) desire to determine his own destiny.
D) willingness to find and accept a challenge.
E) lack of self-confidence.

Question 47

A new small business, Underwater Wildlife, has opened to sell tours of underwater sites around the country and in South America.However, money has to be paid up front by the Underwater staff to book hotels and other travel arrangements before its clients have paid for the tours.That means Underwater is facing a potential

A) insurance difficulty.
B) cash-flow problem.
C) inventory-flow problem.
D) business plan crunch.
E) employee expansion task.

Question 48

Small businesses are typically managed by

A) relatives.
B) professional managers.
C) friends.
D) the people who start and own them.
E) a board of directors.

Question 49

Which of the following is the most likely example of a production industry?

A) Telephone company
B) Movie theaters
C) Financial enterprise
D) Subassembly plant
E) Transportation company

Question 50

All of the following are reasons people go into business except the

A) desire to create a new business.
B) willingness to accept a challenge.
C) guaranteed return on investment.
D) desire for independence.
E) desire to determine one's own destiny.

Question 51

Small businesses have traditionally added ____ new jobs to the economy.

A) more than their proportional share of
B) less than their proportional share of
C) very few
D) the highest paying
E) the vast majority of

Question 52

You have just opened a new small business.You're really happy to learn that studies show that small-business workers

A) don't really like bill collectors much.
B) are more innovative than workers in large businesses.
C) are especially good at handling inventories in the warehouse to avoid damage and spoilage.
D) design ad campaigns that work especially well on network television.
E) pay little attention to their salary levels compared to similar workers in small businesses.

Question 53

Kim Nguyen is planning to open a boutique stocked with exotic imports from around the world.Most probably, this new business will be managed by

A) Kim Nguyen.
B) her friends.
C) her relatives.
D) a professional manager.
E) her family.

Question 54

What is a common mistake that small-business owners make when their businesses begin growing?

A) They sell more goods and services.
B) They put too much money in advertising.
C) They move beyond their local area.
D) They overexpand without proper planning.
E) They invest too much of their own money.

Question 55

Mustaffah always knew he wanted to start his own business.He was very passionate and wanted to create something new.Mustaffah's primary motivation for starting his own business is

A) his need for independence.
B) his entrepreneurial spirit.
C) his desire to determine his own destiny.
D) the lack of good jobs in other companies.
E) his background with his family.

Question 56

Which of the following statements is not true about small businesses?

A) Small businesses provide technical innovation.
B) Small businesses create cyclical unemployment.
C) Small businesses provide employment.
D) Small businesses provide competition.
E) Small businesses fill the needs of society and other businesses.

Question 57

Imagine that you want to open your own small business.You will probably be most concerned with having

A) a lot of inventory in the warehouse on opening day.
B) a really good lawyer and an even better accountant.
C) the best Madison Avenue ad agency money can buy.
D) a good source of capital and good management skills.
E) a top-notch marketing consultant and a lot of inventory in the warehouse.

Question 58

Lauren starts a business that sells personal computers.Within the first year she discovers that computer technology becomes outdated very quickly, and she has not been able to sell her products for as much as she thought due to the passage of time.Lauren has mismanaged

A) inventory.
B) cash flow.
C) financing arrangements.
D) personnel.
E) money.

Question 59

Which of the following statements is true regarding the profitability of new businesses?

A) It may take several years for a new business to begin showing a profit.
B) Profitability is not an important issue for new businesses.
C) Most new businesses will turn a profit within the first year.
D) If a company does not show a profit within the first year, it will fail.
E) Most new businesses are highly profitable when they first start.

Question 60

New ways to do a job with less effort and at lower cost is the basic principle characterising the

A) increases in productivity for the past two hundred years.
B) great desire to be an entrepreneur.
C) motivation for owning a business.
D) American way of life.
E) way small businesses fill the needs of other businesses.

Question 61

John and Ruby Couch just opened a computer store in a small community.Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience-that is, marketing, finance, and personnel experience-in the computer-store business because

A) their business is unlikely to grow and earn large business profits.
B) the computer-store business is a fad.
C) management know-how is insignificant to small-business success.
D) small businesses survive large businesses by three years.
E) about two out of three small firms close within five years of their founding.

Question 62

A carefully constructed guide for the person starting a business is a(n)

A) business plan.
B) marketing plan.
C) organisational plan.
D) articles of business.
E) business budget.

Question 63

All of the following are advantages that small businesses have except

A) the ability to adapt to change.
B) personal relationships with their customers.
C) simplified record keeping.
D) independence.
E) greater potential for making a profit.

Question 64

Beau works for a small pest-control company that has a total of five employees.From his point of view, the primary disadvantage of a small business is the

A) risk of failure.
B) limited ability to raise capital.
C) limited potential for him to advance.
D) personal relationship with his employer.
E) complicated management structure.

Question 65

Victor owns his own motorcycle and ATV store.He notices that many of his customers talk about golf while in his store.He quickly adds golf carts and golf clubs to his merchandise selection.Rapidly adjusting to the needs of his customers is possible because small businesses

A) have personal relationships with their customers.
B) have the ability to quickly adapt to change.
C) are independent.
D) have simplified record keeping.
E) run the risk of failure.

Question 66

Mike's small company produces specialised hardware pieces.His industrial clients prefer to purchase these parts from Mike because

A) large companies do not manufacture small parts.
B) they cannot produce such high-quality parts.
C) it is cheaper to buy from Mike than to make the parts themselves.
D) large companies prefer to have less control over their operations.
E) buying from Mike will help increase their expenses for tax purposes.

Question 67

What is the main advantage of small business that helps retain effective employees who could earn more at a larger firm?

A) Better pay and employee benefits
B) Ability to adapt to change
C) Simplified record keeping
D) Limited ability to raise capital
E) Personal relationships with employees

Question 68

The Hamptons enjoy owning and operating their own restaurant.They enjoy being the masters of their own destinies and closing down the restaurant for one week a year so that they can take a vacation.The Hamptons seem to enjoy which advantage of a small business?

A) Limited potential
B) Personal relationships with customers
C) Independence
D) Personal relationships with employees
E) Ability to adapt to change

Question 69

Penicillin, airplanes, and air conditioning were all

A) invented in the nineteenth century.
B) invented by Russians.
C) created through government-sponsored research.
D) created by individual inventors and small companies.
E) created by large corporations.

Question 70

A friend of yours has recently received his MBA.He wants to open his own business but feels that it might be too risky at this point in his career.As an SBA counselor, you are able to advise him and explain more clearly to him some of the advantages and disadvantages of starting a small business.Which of the following statements best represents something you might tell him?

A) Although opening a small business is risky, there is practically unlimited potential.
B) The cost of opening a small business is relatively low, and financing is easily obtained.
C) Record keeping will be complicated, and public disclosure of most transactions is required.
D) Small businesses foster personal relationships and offer flexibility and independence.
E) Opening a small business is especially difficult because there is little help available for those desiring to do so.

Question 71

Cindy compiles a business plan for a business she hopes to start.This plan should answer all of the following questions except

A) How much will the new business cost?
B) Why is this new business a good idea?
C) What are Cindy's goals for the business?
D) What is the nature and mission of the business?
E) How often will the business have a sale?

Question 72

Suppose that Diane plans to open a new, deluxe hamburger bar near your college.Her business plan most likely would not include

A) the nature and mission of her new business.
B) an explanation of why the new business is a good idea.
C) a detailed discussion of her goals.
D) an actual sample of the product.
E) an analysis of costs.

Question 73

Your friend, Shonta, started a graphic design firm about a year ago.The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding.Shonta does not see any problem because she thinks she can easily get all the money she will need from her local bank.What advice might you give her?

A) She is right-the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses.
B) She is crazybanks do not lend money to small businesses but only to well- known, well-established organisations.
C) She should sell her business immediately before it fails because most small businesses fail during the first five years.
D) She should not accept any new clients so that she can end the need to add additional equipment and employees.
E) She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses.

Question 74

The disadvantages of small businesses include all of the following except

A) limited potential for growth.
B) a high risk of failure.
C) no opportunity to support your family.
D) limited ability to raise capital.
E) limited advancement opportunities for employees.

Question 75

Large firms generally buy parts and assemblies from smaller firms because

A) doing so creates goodwill.
B) they are required to do so by government regulations.
C) they can control small businesses this way.
D) it is less expensive than making their own.
E) large firms want to keep small firms in business.

Question 76

In her small retail shop, Jocelyn knows most of her best customers by name and knows their preferences in clothing and shoes.This demonstrates which advantage of a small business?

A) Ability to adapt to change
B) Independence from customer's desires
C) Simplified record keeping
D) Personal relationships with customers
E) Small customer base

Question 77

Many small firms seek to establish a particular niche in the market, realising that they cannot afford to operate on a larger scale without exposing themselves to considerable risk of retaliation from larger companies.When a number of small businesses are operating in this manner, they are forcing the larger businesses to recognise and account for their influence on the market.In this way, small businesses are primarily

A) fostering competition.
B) providing technical innovation.
C) creating jobs.
D) satisfying the needs of other businesses.
E) avoiding competition.

Question 78

According to the Census surveys, about 50 percent of all new businesses begin with less than ____ in total capital.

A) €1,000
B) €25,000
C) €30,000
D) €50,000
E) €100,000

Question 79

Before seeking financial backing for his new business, Tyler puts together a concise document explaining the nature, mission, and goals of his new business and its expected costs and potential.Tyler has constructed a(n)

A) marketing plan.
B) organisational mission statement.
C) business policy.
D) business plan.
E) organisational guide.

Question 80

As a businessperson planning to open a new small business, you know that the business plan should not contain

A) a discussion of the nature and mission of the new business.
B) information about how much it will cost to open and operate the new business.
C) any mention of the businessperson's goals; financial institutions just aren't interested in these.
D) an explanation of why opening a business of this type makes good business sense.
E) pages and pages of detailed facts and figures.