Question 1

Dana is thinking about starting her own graphics design business but is keenly aware of the fact that she lacks much business experience.A friend has suggested that she consider going to work for someone else in the same type of business before going out on her own.Which of the following would best describe this advice?

Accepted Answer

Working for someone else in the same field can be a good idea as it allows you to learn and gain experience without taking on the risk of starting your own business. However, staying in this position for too long can lead to getting too comfortable and not following through with plans to start your own business.

Question 2

What have Steve Jobs,Ray Kroc,and Walt Disney all experienced?

Accepted Answer

Steve Jobs, Ray Kroc, and Walt Disney all experienced failures early in their careers, which ultimately led to their success as entrepreneurs. Jobs was fired from Apple before returning to lead the company to greater success, Kroc had multiple failed businesses before turning McDonald's into a global phenomenon, and Walt Disney faced bankruptcy and rejection before creating some of the most beloved and successful animated films and theme parks in history.

Question 3

What are small segments within a market that can offer profit potential to entrepreneurs who know how to serve them?

Accepted Answer

Market niches are small segments within a market that have specific needs or preferences, and entrepreneurs who know how to serve them can offer specialized products or services that meet those needs. This can lead to a more devoted customer base and higher profit potential, as the business can differentiate itself from competitors by offering unique value to a specific group of customers. Focus groups and market nodes are not necessarily related to market segmentation, and demographic segments may be too broad to offer unique profit potential.

Question 4

Which of the following is a significant drawback of getting into business by entering into a franchise arrangement?

Accepted Answer

One significant drawback of getting into business by entering into a franchise arrangement is the ongoing royalty payment that the franchisee has to make to the franchiser. This can significantly reduce the profits of the business and make it more difficult to succeed financially. Option A is incorrect because the initial cost of most well-known franchises is usually expensive, not inexpensive. Option B is incorrect because it is generally more difficult to get out of a franchise arrangement than other forms of business ownership due to contractual obligations. Option D is incorrect because franchisees have less independence and flexibility compared to owners who start a business from scratch, as they are bound by the rules and regulations set by the franchiser.

Question 5

Which of the following is the best description of a typical business plan for a small business?

Accepted Answer

A business plan is a formal document that outlines the company's goals and objectives, and provides detailed plans for achieving those goals. It typically includes market research, financial projections, and a description of the company's products or services. A small business plan can range from 25-50 pages in length.

Question 6

What does a look at survival rates for small businesses over their first 10 years show?

Accepted Answer

Survival rates for small businesses typically show a higher rate of failure in the initial years, particularly the first five years, after which the rate of failure tends to slow down.

Question 7

What is a possible drawback to buying an existing business?

Accepted Answer

Buying an existing business means that you will inherit whatever problems and mistakes the previous owner made. This can be a significant drawback as it may require a lot of effort and investment to fix these issues, which can impact the overall profitability of the business. A and D are not necessarily true, as buying an existing business can actually provide a more stable foundation and lessen the risk of failure. B may be a drawback, but it is not necessarily a significant one if the legal transfer is handled correctly.

Question 8

For individuals starting a small business,which of the following best describes writing a business plan?

Accepted Answer

Writing a business plan is not always necessary for every small business, especially if they do not require external financing. However, for those that do need to secure loans or investments, a well-crafted business plan is essential. It demonstrates to potential financiers that the business has a clear direction and strategy for achieving its goals.

Question 9

Barnie has been a very successful sales rep for a big corporation and has managed to save up a large sum of money.He's tired of working for the big company and is wondering if he should sink his savings into a new business.He is willing to work hard and has very good people skills.But he hasn't been able to develop a good business concept from scratch.He also realizes that he doesn't have strong financial skills and might need some training and assistance in this area.Which of the following would best describe someone like Barnie?

Accepted Answer

Barnie's lack of a strong business concept and financial skills could be mitigated by franchising, which offers a proven business model and support from the franchisor. This would allow him to use his people skills and entrepreneurial drive while still having structure and guidance. Option A is not relevant to this scenario as there is no indication that Barnie has an issue with locus of control. Option C is too extreme and dismissive; there are many small business opportunities that may suit Barnie's needs. Option D is not ideal given Barnie's lack of a strong business concept and financial skills; it would be risky to start from scratch without proper knowledge and planning.

Question 10

A business plan should include which of the following topics?

Accepted Answer

The answer of A business plan should include which of...

Question 11

Sal is thinking about starting a small business and is trying to assess the potential opportunities and threats associated with a new start-up.She's talked with friends and associates about her plans,and several have offered her opinions and advice.The comments of four friends are summarized below.Which of these statements would probably be the most helpful to Sal?

Accepted Answer

This advice is the most practical as it suggests a specific strategy for Sal to pursue. By targeting a market segment that larger companies overlook, Sal can find a niche and establish a customer base without having to compete directly with bigger players in the industry. The other options either provide unhelpful or potentially harmful advice. Option A underplays the importance of business skills and experience, which can be critical to success. Option B assumes that Sal's business is likely to fail, which could be demotivating, and emphasizes perseverance rather than strategic thinking or planning. Option C suggests that Sal should prioritize appearances over substance, which could lead to financial strain without delivering real value to customers.

Question 12

Which of the following is the federal government agency dedicated to maintaining and strengthening the national economy by aiding,counselling,assisting,and protecting the interests of small business?

Accepted Answer

Canada Business is the federal government agency dedicated to maintaining and strengthening the national economy by aiding, counselling, assisting, and protecting the interests of small business. The Federal Small Enterprise Resource Centre and National Center for Business Development do not exist in Canada, and the Federal Trade Commission is a United States agency.

Question 13

Which of the following is an advantage to buying an established business rather than starting from scratch?

Accepted Answer

Buying an established business provides the advantage of having a ready-made organizational structure in place. This can save time and money that would otherwise be spent building a structure from scratch. Existing bad debts (A) and bad relationships with customers and suppliers (D) can become a liability and require additional work to repair. The absence of working operating procedures (B) can be a challenge, but it is not necessarily an advantage of buying an established business.

Question 14

Which of the following best describes overhead costs for small businesses?

Accepted Answer

Overhead costs for small businesses are often lower than they are for big companies due to the fact that small businesses operate on a smaller scale and have less complex operations. This gives small businesses a competitive advantage in terms of cost management.

Question 15

What are Burger King,McDonald's,Wendy's,and Harvey's all examples of?

Accepted Answer

Burger King, McDonald's, Wendy's, and Harvey's are all examples of business franchising, where a company allows individuals or groups to use their brand name, products, and services in exchange for a fee and a percentage of profits.

Question 16

Who are the primary outside users of business plans?

Accepted Answer

Investors and lenders are the primary outside users of business plans as they need to assess the feasibility of investing or lending money to the business. Vendors and suppliers may also review business plans to evaluate the potential for future business partnerships, but they are not the primary outside users. Customers and small business administrators are internal users and not considered outside users of business plans.

Question 17

Mary Kate is a successful entrepreneur.Which of the following would best describe her?

Accepted Answer

Mary Kate's success as an entrepreneur suggests that she has confidence in her business ideas and is not deterred by doubts expressed by others.

Question 18

Cal is thinking about starting a small business and is trying to assess the potential opportunities and threats associated with a new start-up.He's talked with friends and associates about his plans,and several have offered him opinions and advice.The comments of four friends are summarized below.Which of these statements would probably be the most helpful to Cal?

Accepted Answer

Of the four statements, D is the only one that offers specific advice on how to manage the financial aspect of a new business venture. Starting a small business is always challenging, and it's important to have a clear understanding of the potential risks and difficulties involved. The advice to be cautious with spending and avoid making large purchases when finances are tight is sound and practical.

Question 19

Which of the following is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives?

Accepted Answer

A business plan is a formal document that outlines the core business objectives, strategies, and timelines for achieving those objectives. It is a comprehensive document that describes the business concept, market analysis, financial projections, marketing strategies, and operational procedures. It is an essential tool for any entrepreneur seeking funding, partnerships or strategic alliances. Option A is incorrect because the enterprise mission statement is a short statement that articulates the company's purpose and values. Option B is incorrect because there is no such document as an enterprise focus document. Option C is incorrect because the term "strategic business outline" is not a commonly used phrase in business.

Question 20

Which of the following is a drawback of becoming a small business owner by buying a franchise?

Accepted Answer

Buying a franchise comes with a significant initial purchase price, which can be a drawback for aspiring small business owners who may not have the funds readily available. While independence and creativity may be limitations of franchise ownership, they are not necessarily drawbacks. The success of the national chain can also impact the franchisee, which is contrary to option C.

Quiz 6: Small Business and Entrepreneurship: Economic Rocket Fuel