Question 1

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Accepted Answer

A) True 
 B)False

Question 2

When comparing small businesses to their larger competitors, it is clear that:

Accepted Answer

A)   bigger is always better.
B)   small firms can always outperform big firms on a level playing field.
C)   small firms often can offer more personalized customer services than big firms.
D)   small firms are slower to respond to opportunities than are large firms.E) A) and C)
F) None of the above

Question 3

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their:

Accepted Answer

A)   collateral.
B)   credit history.
C)   previous business success.
D)   integrity and sound business idea.E) All of the above
F) B) and D)

Question 4

As a young boy, Drew remembers his grandfather telling him, "Son, if you can find something you like to do, and somebody is willing to pay you to do it, well, that's the secret to a great life." The way Drew saw it, this was his big break. For the past five years, he split his time between school and working for a local tree farm/nursery business. The owner recently announced he was ready to retire. As Drew began creating a business plan, he contemplated what the business might be worth. How much will he need to buy this business? For starters, Drew:

Accepted Answer

A)   needs to find a government database that outlines what nursery businesses are worth, on average, across the country.
B)   should speak with the current owner and determine the total value of assets (what the business owns) , its earning potential, and its unique advantage.
C)   will want to determine the assessed value of the acreage that the business owns, and then bid competitively.
D)   needs to understand that it's difficult to buy an existing business, rather than start your own. The key will be to meet with the company's accountant, and explain your interest. The accountant will have all the answers.E) A) and B)
F) B) and D)

Question 5

Big businesses do not serve all the needs of a market.

Accepted Answer

A) True 
 B)False

Question 6

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:

Accepted Answer

A)   charge an interest rate that is much higher than any other lender.
B)   not be interested in the management of the business.
C)   expect an ownership stake in the company in exchange for financial backing.
D)   demand that the money be repaid within 90 days or less.E) None of the above
F) A) and B)

Question 7

Venture capitalists prefer investing in smaller start-up businesses in order to reduce their overall risk.

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)   provide venture capital funds for aspiring small businesspeople.
B)   visit high schools to advise students who are thinking about starting their own business.
C)   help in the research and development of new products for entrepreneurs to market.
D)   provide consulting services to small businesses for free.E) A) and D)
F) A) and C)

Question 9

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Accepted Answer

A) True 
 B)False

Question 10

Many more new entrepreneurs are turning to crowdfunding sites, like Kickstarter, to raise funds for their endeavors.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following best describes the difference between an intrapreneur and an entrepreneur?

Accepted Answer

A)   Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses.
B)   Intraprenuers are practical while entrepreneurs are creative.
C)   Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business.
D)   Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the management of all areas of a business.E) C) and D)
F) All of the above

Question 12

John, James, and Frank wanted to open J2F Sports Bar that offers unique brands of beer, weekend entertainment, and a limited menu. In one of the preliminary meetings, James presented a list of reasons that small businesses fail. Although many of the ideas on this list were applicable to many types of business, one challenge pertained specifically to the restaurant and bar business. The challenge he referred to was:

Accepted Answer

A)   underestimating how much time it will take to build a market.
B)   borrowing money without planning just how and when to pay it back.
C)   carrying habits of personal extravagance into the business.
D)   some of the easiest businesses to start have the least growth prospects and greatest failure rates.E) B) and C)
F) C) and D)

Question 13

Enterprise zones are:

Accepted Answer

A)   government-owned properties that are available for entrepreneurial ventures at a reduced cost.
B)   similar to incubator facilities but strictly run by city and state governments.
C)   blighted areas that contain toxic materials making them unsuitable for business operations.
D)   specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.E) All of the above
F) A) and D)

Question 14

When starting a small business, it's important to remember:

Accepted Answer

A)   an affinity for taking large amounts of risk is the critical factor in achieving small business success.
B)   doing things differently from previous entrepreneurs is the real key to success.
C)   learning from others and gaining relevant business experience improves the odds for success.
D)   to avoid burn-out, limit the number of hours you work each week as you adapt to the rigors of self-employment.E) A) and B)
F) B) and C)

Question 15

The principles of management of a large business are similar to the principles of management of a small business.

Accepted Answer

A) True 
 B)False

Question 16

Most entrepreneurs are more interested in personal achievement than in power.

Accepted Answer

A) True 
 B)False

Question 17

Small Business Administration loans help firms finance their domestic operations. These funds however, cannot be used to finance exports since the money is provided by U.S. taxpayers.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?

Accepted Answer

A)   It's all about profits, and the chance to make a lot of money.
B)   It's about independence and the opportunity to share in the American dream.
C)   It's about power and fame.
D)   It's about a lot of things, but it does not include personal achievement.E) All of the above
F) A) and B)

Question 19

One of the best places for young entrepreneurs to start shopping for an SBA loan is a(n) :

Accepted Answer

A)   Small Business Development Center.
B)   financial institution specializing in business loans.
C)   college or university financial aid office.
D)   website for the Venture Capitalists Association.E) B) and D)
F) All of the above

Question 20

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

A)   find it difficult to remove family members from positions, even if it is not good for the business.
B)   find it difficult to retrain Kate for the job, and even though his business is losing opportunities, he will stay the course.
C)   know that profit margins have declined, but he doesn't care.
D)   have a bigger picture of things, and not feel the need to respond to a family member's request.E) B) and D)
F) A) and B)

Exam 6: Entrepreneurship and Starting a Small Business

Big businesses do not serve all the needs of a market.

Correct Answer
verified

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

Correct Answer
verified

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Correct Answer
verified

The principles of management of a large business are similar to the principles of management of a small business.

Correct Answer
verified

One of the best places for young entrepreneurs to start shopping for an SBA loan is a(n) :

Correct Answer
verified

Venture capitalists prefer investing in smaller start-up businesses in order to reduce their overall risk.

Correct Answer
verified

Correct Answer
verified

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their:

Correct Answer
verified

Correct Answer
verified

Most entrepreneurs are more interested in personal achievement than in power.

Correct Answer
verified

When comparing small businesses to their larger competitors, it is clear that:

Correct Answer
verified

Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?

Correct Answer
verified

Small Business Administration loans help firms finance their domestic operations. These funds however, cannot be used to finance exports since the money is provided by U.S. taxpayers.

Correct Answer
verified

Enterprise zones are:

Correct Answer
verified

Many more new entrepreneurs are turning to crowdfunding sites, like Kickstarter, to raise funds for their endeavors.

Correct Answer
verified

When starting a small business, it's important to remember:

Correct Answer
verified

Correct Answer
verified

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Correct Answer
verified

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:

Correct Answer
verified

Which of the following best describes the difference between an intrapreneur and an entrepreneur?

Correct Answer
verified

Exam 6: Entrepreneurship and Starting a Small Business

Big businesses do not serve all the needs of a market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Correct AnswerverifiedShow Answer

The principles of management of a large business are similar to the principles of management of a small business.

Correct AnswerverifiedShow Answer

One of the best places for young entrepreneurs to start shopping for an SBA loan is a(n) :

Correct AnswerverifiedShow Answer

Venture capitalists prefer investing in smaller start-up businesses in order to reduce their overall risk.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Most entrepreneurs are more interested in personal achievement than in power.

Correct AnswerverifiedShow Answer

When comparing small businesses to their larger competitors, it is clear that:

Correct AnswerverifiedShow Answer

Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?

Correct AnswerverifiedShow Answer

Small Business Administration loans help firms finance their domestic operations. These funds however, cannot be used to finance exports since the money is provided by U.S. taxpayers.

Correct AnswerverifiedShow Answer

Enterprise zones are:

Correct AnswerverifiedShow Answer

Many more new entrepreneurs are turning to crowdfunding sites, like Kickstarter, to raise funds for their endeavors.

Correct AnswerverifiedShow Answer

When starting a small business, it's important to remember:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In order to better serve their customers, small business owners should avoid delegating authority to their employees.

Correct AnswerverifiedShow Answer

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:

Correct AnswerverifiedShow Answer

Which of the following best describes the difference between an intrapreneur and an entrepreneur?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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