Canadian Entrepreneurship and Small Business Management 10Th Edition By Wesley Balderson – Test Bank

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Canadian Entrepreneurship and Small Business Management 10Th Edition By Wesley Balderson – Test Bank

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Chapter 02

The Small Business Decision

 

 

Multiple Choice Questions

1. Small businesses tend to be:
   A.labour intensive.
   B. capital intensive.
   C. balanced between labour and capital intensity.
   D. none of the answers are correct.

 

Difficulty: Medium
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-01 The Small Business Decision: Personal Evaluation

2. Which of the following is not an advantage of small business ownership?
   A.Independence
   B. Challenge
   C. Skill development
   D. More free time

 

Difficulty: Easy
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-02 Advantages of Small Business Ownership

3. The risks of self-employment include all but which of the following?
   A.Income uncertainty
   B. Work more than 9-5 schedule
   C. The business takes over the life of the owner.
   D. Guaranteed income

 

Difficulty: Medium
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-03 Disadvantages of Small Business Ownership

 

4. The primary reason most people start their own business is to:
   A.build for their family.
   B. earn large sums of money.
   C. use their skills/abilities.
   D. gain independence.

 

Difficulty: Easy
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-02 Advantages of Small Business Ownership

5. In which phase is entrepreneurship most important?
   A.Start-up process
   B. Hiring of key employees
   C. Maintaining a positive cash flow
   D. Building a sufficient customer base

 

Difficulty: Medium
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-01 The Small Business Decision: Personal Evaluation

6. The entrepreneurial start-up process begins with:
   A.a visit to the banker for start-up funds.
   B. a visit to the library for more information on the business.
   C. a visit to a business professor for advice.
   D. an innovative idea that is refined as the idea is thought through.

 

Difficulty: Easy
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-01 The Small Business Decision: Personal Evaluation

 

7. The ability to see, conceive, and create new and unique products/services is:
   A.innovativeness.
   B. risk-taking.
   C. product development.
   D. locus of control.

 

Difficulty: Easy
Learning Objective: 02-02 List the personal and organizational attributes of a successful small business owner.
Topic: 02-05 Personality Characteristics Required By Successful Entrepreneurs

8. Personal characteristics of successful entrepreneurs include:
   A.having a business degree.
   B. risk-taking and access to financial resources.
   C. perseverance.
   D. risk-taking and perseverance.

 

Difficulty: Easy
Learning Objective: 02-02 List the personal and organizational attributes of a successful small business owner.
Topic: 02-05 Personality Characteristics Required By Successful Entrepreneurs

9. Entrepreneurial traits include:
   A.developing strategy.
   B. being a team player.
   C. creativity.
   D. works through others.

 

Difficulty: Easy
Learning Objective: 02-02 List the personal and organizational attributes of a successful small business owner.
Topic: 02-05 Personality Characteristics Required By Successful Entrepreneurs

 

10. Profit Magazine found that owners of small- and medium-sized businesses on average worked:
    A.60 hours per week.
    B. 54 hours per week.
    C. 45 hours per week.
    D. 40 hours per week.

 

Difficulty: Medium
Learning Objective: 02-01 Discuss the advantages and disadvantages of business ownership as a starting point in making the small business decision.
Topic: 02-03 Disadvantages of Small Business Ownership

11. Even though they own their own businesses, entrepreneurs must still answer to:
    A.their boss.
    B. neighbours.
    C. customers and suppliers.
    D. no one.

 

Difficulty: Hard
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-07 Small Business Successes

12. Which of the following is not a primary cause of small business failure?
    A.Incompetence and inexperience
    B. Lack of financial capacity
    C. Floods and tornados
    D. Lack of understanding financial information

 

Difficulty: Medium
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-08 Small Business Failures

 

13. The major causes of business failure include:
    A.a manager not holding a business degree.
    B. growing too quickly.
    C. a type of small business.
    D. number of competitors.

 

Difficulty: Easy
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-08 Small Business Failures

14. Which of the following is not a characteristic of a successful small business?
    A.High operating expenses
    B. Alertness to change
    C. Ability to attract and hold employees
    D. Thoroughness with operating details

 

Difficulty: Medium
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-07 Small Business Successes

15. Which of the following is not an external shock that can negatively affect small business success?
    A.Downturn in the economy
    B. Loss of suppliers
    C. Poorly planned expansion
    D. Changes in interest or currency rates

 

Difficulty: Medium
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-08 Small Business Failures

 

16. Specific areas of managerial incompetence contributing to small business failure include:
    A.lack of financial skill.
    B. poor or non-existent management information systems.
    C. company management does not ask for help.
    D. all of the answers are correct.

 

Difficulty: Easy
Learning Objective: 02-03 Explain the reasons some businesses succeed and others fail.
Topic: 02-08 Small Business Failures

17. Entrepreneurial skills are required to:
    A.maintain a business.
    B. start a business.
    C. solidify existing operations.
    D. sell the business.

 

Difficulty: Easy
Learning Objective: 02-04 Identify the differences between an entrepreneur and a manager.
Topic: 02-10 Entrepreneurial Skills

18. Managerial traits include:
    A.creativity.
    B. skills in several functional areas.
    C. Innovativeness.
    D. risk-taking.

 

Difficulty: Easy
Learning Objective: 02-04 Identify the differences between an entrepreneur and a manager.
Topic: 02-11 Managerial Skills

19. In which situation would it be the most appropriate to utilize managerial skills?
    A.Generating ideas
    B. Maintaining control of operations
    C. Generating solutions to problems
    D. Adding new products to the line

 

Difficulty: Medium
Learning Objective: 02-04 Identify the differences between an entrepreneur and a manager.
Topic: 02-11 Managerial Skills

 

20. Managerial skills are required to:
    A.expand product lines.
    B. start a business.
    C. develop new ideas.
    D. maintain a business.

 

Difficulty: Easy
Learning Objective: 02-04 Identify the differences between an entrepreneur and a manager.
Topic: 02-11 Managerial Skills

21. Which of the following is not an entrepreneurial trait?
    A.Flexibility
    B. Innovativeness
    C. Teamplayer
    D. Independence

 

Difficulty: Easy
Learning Objective: 02-04 Identify the differences between an entrepreneur and a manager.
Topic: 02-10 Entrepreneurial Skills

22. Which of the following is not one of the Ten Commandments for intrapreneur success?
    A.Share credit wisely
    B. Come to work each day willing to be fired
    C. Ask for resources before asking for advice
    D. Honour your sponsor

 

Difficulty: Medium
Learning Objective: 02-05 Discuss entrepreneurial development in large businesses.
Topic: 02-12 Entrepreneurial Success in Large Businesses

23. The primary motives of an intrapreneur are:
    A.Independence, ability to advance, and gain corporate rewards.
    B. promotion and other traditional corporate rewards such as office, staff, and power.
    C. independence, opportunity to create, and money.
    D. recognition, staff, and promotion.

 

Difficulty: Medium
Learning Objective: 02-05 Discuss entrepreneurial development in large businesses.
Topic: 02-12 Entrepreneurial Success in Large Businesses

Chapter 04

Organizing a Business—The Business Plan

 

 

Multiple Choice Questions

1. Starting a business from scratch may be chosen by an entrepreneur because:
   A.it provides a sense of satisfaction.
   B. it is the most likely strategy to lead to success.
   C. customers are often sympathetic to such start-ups.
   D. there is lots of government funding for this strategy.

 

Difficulty: Easy
Learning Objective: 04-01 Describe the advantages and disadvantages of organizing a business from scratch compared with purchasing a business or becoming a franchisee.
Topic: 04-01 Getting Started: Establishing the Business

2. Starting a business from scratch can:
   A.reduce the usual risks inherent in a new business.
   B. is a proven model for surviving the first few years of operation.
   C. result in the least amount of start-up costs.
   D. requires a significant personal investment of money from the entrepreneur.

 

Difficulty: Easy
Learning Objective: 04-01 Describe the advantages and disadvantages of organizing a business from scratch compared with purchasing a business or becoming a franchisee.
Topic: 04-02 Advantages of Organizing a Small Business from Scratch

3. Organizing a new business from scratch:
   A.eliminates the need to do significant market research.
   B. often fails because of the lack of historical information.
   C. is a good strategy for eliminating risk.
   D. often overcomes the new owner’s uncertainties.

 

Difficulty: Easy
Learning Objective: 04-01 Describe the advantages and disadvantages of organizing a business from scratch compared with purchasing a business or becoming a franchisee.
Topic: 04-03 Disadvantages of Organizing a Small business from Scratch

 

4. When a competent feasibility study has been done by a new business owner:
   A.it is possible to eliminate uncertainties.
   B. starting a business from scratch is the most appropriate strategy.
   C. demand after start-up is likely to be sufficient.
   D. some uncertainties will always remain.

 

Difficulty: Medium
Learning Objective: 04-01 Describe the advantages and disadvantages of organizing a business from scratch compared with purchasing a business or becoming a franchisee.
Topic: 04-03 Disadvantages of Organizing a Small business from Scratch

5. A new business ______ has start-up problems.
   A.rarely
   B. only sometimes
   C. always
   D. never

 

Difficulty: Medium
Learning Objective: 04-01 Describe the advantages and disadvantages of organizing a business from scratch compared with purchasing a business or becoming a franchisee.
Topic: 04-03 Disadvantages of Organizing a Small business from Scratch

6. Writing a business plan is essential for:
   A.both raising money and assisting with day-to-day management.
   B. raising money.
   C. managing the new business.
   D. attracting reliable suppliers.

 

Difficulty: Medium
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-05 The Small Business Plan

 

7. A business plan helps to:
   A.attract customers.
   B. generate growth.
   C. direct retail store layout.
   D. keep business growth on course.

 

Difficulty: Medium
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-05 The Small Business Plan

8. Business plan formats and emphasis:
   A.are standard.
   B. vary depending on the use.
   C. reflect the adequacy of funding.
   D. define success.

 

Difficulty: Easy
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-06 Writing the Plan

9. It is recommended that business plans:
   A.should be written by an outside consultant.
   B. should be adapted from existing successful business plans.
   C. should only be used when required by lenders.
   D. should be written by the entrepreneur.

 

Difficulty: Easy
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-06 Writing the Plan

10. It is advisable to:
    A.work on a business plan based on intuition.
    B. draft sections of a business plan as information becomes available.
    C. plan the preparation of your business plan.
    D. work on a business plan in its entirety at once.

 

Difficulty: Hard
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-06 Writing the Plan

 

11. The executive summary:
    A.is primarily for investors.
    B. is primarily for management.
    C. is primarily for lenders.
    D. is primarily for employees.

 

Difficulty: Medium
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-06 Writing the Plan

12. A business plan is of value to:
    A.start-ups.
    B. both start-ups and established businesses.
    C. established businesses.
    D. new business owners.

 

Difficulty: Medium
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-05 The Small Business Plan

13. An analysis of competitors in a marketing plan would:
    A.consider suppliers’ needs.
    B. be written for investors.
    C. assess legal restrictions.
    D. determine who the competitors are.

 

Difficulty: Medium
Learning Objective: 04-02 Discuss the importance of formulating and following a business organizational plan.
Topic: 04-06 Writing the Plan

14. Some well-known investors insist on business owners:
    A.with relevant industry experience.
    B. with engaging personalities.
    C. who are well funded.
    D. who are younger than 55.

 

Difficulty: Hard
Learning Objective: 04-03 List the essential components of a small business plan.
Topic: 04-10 Describe The Management Team

 

15. A business plan should include:
    A.location impact on industry history.
    B. product failure statistics.
    C. social media contact information for management.
    D. industry growth trends.

 

Difficulty: Hard
Learning Objective: 04-03 List the essential components of a small business plan.
Topic: 04-07 Components of the Plan

16. New laws can mostly negatively:
    A.impact management passion.
    B. influence customer attraction.
    C. affect proposed marketing practices.
    D. change product usefulness.

 

Difficulty: Hard
Learning Objective: 04-03 List the essential components of a small business plan.
Topic: 04-12 Plan the Marketing Approach

17. A saturation index refers to:
    A.the number of units of products owned by customers in the trading area.
    B. the ratio of competing retail sales to competing retail space.
    C. the frequency with which customers encounter products in retail outlets.
    D. the age and history of a product.

 

Difficulty: Medium
Learning Objective: 04-03 List the essential components of a small business plan.
Topic: 04-13 Describe the Selection of the Location

18. The personnel plan would include the:
    A.plan for hiring, training, and managing those who will work in the business.
    B. computer systems that would contain job descriptions.
    C. accounting system that contains payroll information.
    D. renovation required for physical facilities.

 

Difficulty: Medium
Learning Objective: 04-03 List the essential components of a small business plan.
Topic: 04-16 Plan the Personnel