1. The location of the business is especially important for what type of start-up businesses?
a. service?
b. manufacturing?
c. retail?
d. computer-based service
2. The limited liability company is most like a/an:
a. S-corporation ?
b. master partnership ?
c. sole proprietorship ?
d. general partnership
3. Which of the following is true about choosing a limited liability company form of ownership?
a. It is inexpensive, easy to form, and covered by little regulation due to its newness. ?
b. It has no disadvantages except its newness. ?
c. It's an excellent conversion vehicle for existing businesses that are suffering from double ?taxation but problematic for sole proprietorships. ?
d. It is ideal for a new company but difficult to convert to with an existing company.
4. Typically, the franchiser controls are very tight on what the franchisee:
a. sets in terms of retail pricing and hours of operation. ?
b. does in terms of who they hire as employees. ?
c. sales in terms of the product or service they offer. ?
d. does with his/her net profits after fees and taxes are paid.
5. The recommended steps when buying a business are:
a. analyze your skills and abilities
b. explore a variety of financing options
c. investigate the potential acquisitions
d. all of the above
6. Using the discounted future earnings approach, the buyer estimates
a. the company's net income for the several years
b. the company's net income for the next six months
c. the company's net income for several years and then discounted back to the present value
d. the company's net asset for several years and then discounted back to the present value
7. Potential investors tend to believe that if an entrepreneur can't develop a good plan:
a. then the entrepreneur is just like the majority of entrepreneurs and will probably do quite well
b. he/she probably lacks the discipline to run a business
c. he/she is probably the action-oriented sort of person they need running a business
d. he/she needs to hire a consultant to write the plan for him/her
8. Defining the target market's potential and describing its characteristics is part of the:
a. marketing strategy portion of the business plan
b. competitive analysis
c. description of the product line
d. business strategy section of the business plan
9. An explanation of how the product will be distributed is contained within the:
a. business strategy section of the business plan
b. description of the product line
c. marketing strategy portion of the business plan
d. competitive analysis
Unit 2 Examination
10. A description of the key factors that will dictate the success of your business quality, price competitiveness, etc. should be contained in the ________ section of the business plan.
a. executive summary
b. market analysis
c. description of the business
d. competitor analysis
11. The marketing plan should include certain key objectives, such as:
a. determining product costs through market research
b. determining what costing strategies to use
c. pinpointing the specific target markets a small business will serve
d. discovering what the company's ETDB index is
12. A demographic trend is like a train for the small business owner in that:
a. the small business will be "run over" if it doesn't get out of the way and try to work with the "spin-offs" from the trend
b. he/she needs to catch it and ride it to wherever it is going
c. he/she needs to discover where it is going early and decide whether or not to get on board
d. it is a slow process that is easily caught at several points, and the small business owner
has lots of time to consider his/her options
13. To build an effective customer service program, it is important to:
a. swiftly discipline employees who mistreat customers
b. offer low prices
c. train key employees to watch for and intervene when there are problems let managers wait on d. customers occasionally
14. The cost of marketing a product is highest in the:
a. saturation stage
b. introductory stage
c. growth and acceptance stages
d. maturity stage
15. The choice of advertising medium is primarily determined by:
a. what media the competition uses
b. the unique selling proposition and budget
c. the target audience and the message
d. what media the industry focuses on
16. Radio:
a. can reach nearly any target market
b. is the one medium that customers spend the most time paying attention to
c. is the most expensive advertising medium in terms of relative costs
d. is very susceptible to "zapping"
17. When pricing products, it is important to remember that:
a. pricing is more an intuitive than a quantitative process
b. a customer orientation in price setting is most important
c. there is an ideal price that customers will pay for a given product or service
d. once the acceptable price range is found, prices should not be changed again
18. ABC manufactures computer hardware. The marketing executives, in order to increase the market share, forced a business to accept a suggested retail price and not to sell the items below the stated price. This is a violation of what?
a. As long as the manufacturer offer rebates, they can do whatever they want.
b. This practice violates the Fair Price Protection Act
c. This practice violates the Sherman Antitrust Act.
d. There is no violation. The manufacturer has the rights to tell a business at what price they
should resell the computer.
19. In regards to strategies for E-success, which goal(s) of e-commerce are no different from traditional off-line businesses?
a. boost profits
b. improve efficiency
c. to increase sales
d. all of the above
7) A SCOR filing has a number of advantages to it, such as the fact that:
it can be used by partnerships
there is no requirement for an audited financial statement if the offering is under $500,000
a company may raise between $3 and $5 million per year
it is recognized in every state
13) When a small business is refused a loan because it is not profitable and deemed a poor credit risk, the owner can usually turn to ________ as a source of short-term funds.
a. venture capital companies
b. trade credit
c. loans from insurance companies
d. stockbrokers
14) A federally-sponsored program which offers loan guarantees to create and expand businesses in areas with below-average income and high unemployment is called:
a. the Farmers Home Administration
b. the Economic Development Administration c. SBIC
d. the Small Business Administration
15) Grants to small businesses, made to strengthen the local economy in cities and towns that are considered economically distressed, are made by:
a. the Farmers Home Administration
b. a local development company
c. the Economic Development Administration
d. the Department of Housing and Urban Development
16) When a bank makes enough good SBA-guaranteed loans to become a ________ lender, the SBA promises a faster turnaround time for the loan decision-typically 3 to 10 business days.
a. LDC
b. certified c. preferred d. qualified
17) A Section 504 program has three types of lenders involved:
a. a local development company, the SBA, and a commercial finance company. b. a bank, the SBA, and a certified development company.
c. the SBA, a private placement, and an SBIC.
d. HUD, a bank, and an economic development company.
18) The average interest rates on SBA-guaranteed loans is:
a. prime-plus-2-percent
b. 2 percent
c. 7 percent
d. prime-minus-2-percent
Unit 4 Examination
19) Factoring:
a. places the risk of uncollected accounts receivable on the small business owner
b. is a type of trade credit
c. is best used as a long-term source of capital
d. is a more expensive method of financing than borrowing from a bank
20) Which of the following characteristics for selecting a city would be of greatest interest to a retail store selling fine china and collectibles?
a. Transportation
b. Population trends
c. Public services
d. Zoning
21) One advantage to locating near competitors is found in the:
a. localize all similar businesses close to each other
b. the ability to in comparison shopping
c. to keep an eye on the competitor
d. make it easy for hiring
22) The best way to determine where to place merchandise, what a store's "hot" and "cold" spots are, is to:
a. simply observe customers in the store
b. conduct focus groups with former customers
c. hire a market research firm to study your business
d. conduct a kinesiology study
23) The value of the floor space in a retail store depends upon:
a. the merchandise in that area
b. the number of salespeople servicing the area
c. its proximity to aisles and entrances
d. the type of store and customer
Unit 4 Examination
24) What are two distinct factors are important for entrepreneurs analyzing the labor supply in a potential location?
a. Minimum wage in the area and the labor's level of education, training and experience.
b. Minimum wage and the number of workers available in the area.
c. Cost of transportation and minimum wage.
d. The number of workers available in the area and their level of education, training, and
experience.
25) Jim wanted to start an outside café in his neighborhood. When he started the construction, the building department made him to stop since he was not in accordance to the local zone. What would be the best option for Jim?
a. He should quit and consider another location.
b. Joe could appeal to the local zoning commission.
c. Joe should hire an attorney and sue the city for the money he has spent thus far.
d. He could have the subcontractors to complete the café at night so the building department
will not be around.