Small Business Management
Final Exam Questions
Course Introduction
Small Business Management provides students with a comprehensive understanding of how to start, operate, and grow a small business successfully. The course covers essential concepts such as business planning, financing, marketing strategies, legal and regulatory requirements, human resource management, and sustainable growth techniques tailored to small enterprises. Students will analyze real-world case studies, develop practical skills in decision-making and problem-solving, and learn how to identify opportunities and manage risks unique to small businesses. The course aims to equip future entrepreneurs and small business managers with the foundational knowledge and tools needed to navigate the dynamic business environment.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 5th Edition by Bruce R. Barringer
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15 Chapters
1124 Verified Questions
1124 Flashcards
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Chapter 1: Introduction to Entrepreneurship
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) Entrepreneurs are usually moderate, rather than high, risk-takers.
A)True
B)False
Answer: True
Q2) Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Stephanie a level of income that is similar to what she would earn in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an example of a(n) ________ firm.
A) salary-substitute
B) entrepreneurial
C) quality-of-life
D) lifestyle
E) industry-standard
Answer: A
Q3) Entrepreneurs are motivated primarily by money.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Recognizing Opportunities and Generating Ideas
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) A common way that gaps in the marketplace are recognized is ________.
A) by observing changing environmental trends
B) by recognizing problems that need to be solved
C) via studying industry reports
D) when people become frustrated because they can't find a product or service that they need and recognize that other people feel the same way
E) via combined focus groups and brainstorming sessions
Answer: D
Q2) Brad Johnson is starting an upscale men's clothing store in a mall near Seattle. He wants to open his store during the time period in which a business like his can realistically enter the new market. Brad is trying to open his business while the ________ is open.
A) safe harbor
B) window of opportunity
C) portal of entry
D) doorway of opportunity
E) safety zone
Answer: B
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Chapter 3: Feasibility Analysis
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Sample Questions
Q1) The two primary issues to consider in organizational feasibility analysis are management prowess and ________.
A) market timeliness
B) concept testing
C) resource sufficiency
D) target market attractiveness
E) total startup cash needed
Answer: C
Q2) A feasibility analysis is an assessment of a potential product or service idea rather than a potential business.
A)True
B)False
Answer: False
Q3) Organizational feasibility analysis is conducted to determine whether a proposed business venture has sufficient management expertise, organizational competence, and resources to successfully launch its business.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Developing an Effective Business Model
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75 Flashcards
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Sample Questions
Q1) Jamie Finch is crafting the business model for her fashion design firm. She just completed the section that describes how her firm plans to compete relative to her rivals. Jamie just completed the ________ portion of her business model template.
A) operations
B) core strategy
C) resources
D) strategic plan
E) tactical strategy
Q2) In the terminology of the Barringer/Ireland Business Model Template, a firm's ________ structure describes the most important costs incurred to support its business model.
A) expense
B) cost
C) budget
D) overhead
E) outflow
Q3) What is the difference between standard business models and disruptive business models? Include examples of both in your answer.
Q4) Describe the Barringer/Ireland Business Model Template and discuss its purpose.
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Chapter 5: Industry and Competitor Analysis
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75 Flashcards
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Sample Questions
Q1) A fragmented industry is an industry that is experiencing slow increases in demand, numerous repeat customers, and limited product innovation.
A)True
B)False
Q2) In the context of competitor analysis, ________ competitors are companies that are not yet direct or indirect competitors but could move into one of these roles at any time.
A) stable
B) roundabout
C) impending
D) approximate
E) future
Q3) A competitive analysis grid is a tool for organizing the information a firm collects about its competitors.
A)True
B)False
Q4) A comparison analysis is a detailed evaluation of a firm's competitors.
A)True
B)False
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Chapter 6: Writing a Business Plan
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Sample Questions
Q1) A(n) ________ is a graphic representation of how authority and responsibility are distributed within a company.
A) organizational chart
B) personnel chart
C) human resources chart
D) administrative chart
E) directional chart
Q2) A competitor analysis, which is a detailed analysis of a firm's competitors, should be included in the market analysis section of its business plan.
A)True
B)False
Q3) According to the textbook, a 2010-2012 study of 350 entrepreneurs found that of those that had successful exist, only about ________ started with a business plan
A) 10 percent
B) 15 percent
C) 20 percent
D) 30 percent
E) 40 percent
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Chapter 7: Preparing the Proper Ethical and Legal Foundation
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Sample Questions
Q1) The vast majority of corporations in the United States are public corporations.
A)True
B)False
Q2) Large firms like Apple, Facebook, General Electric, and Microsoft, that trade on organized stock exchanges, are ________.
A) limited partnerships
B) limited liability companies
C) subchapter S corporations
D) C corporations
E) general partnerships
Q3) It is important for an entrepreneur to select an attorney as late as possible when developing a business venture.
A)True
B)False
Q4) A subchapter S corporation combines the advantages of a partnership and a C corporation.
A)True
B)False
Page 9
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Chapter 8: Assessing a New Venture's Financial Strength and Viability
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Sample Questions
Q1) Describe the difference between historical and pro forma financial statements.
Q2) The Savvy Entrepreneurial Firm feature in Chapter 8 focuses on a scenario involving the selection of a new CEO for New Venture Fitness Drinks. The lesson learned from the feature was ________.
A) compare a firm's financial ratios against its primary competitors and industry norms to fairly assess how well a firm is performing financially
B) income statements are more effective in assessing how well a firm is performing financially than are balance sheets and statements of cash flow
C) the most powerful instrument for understanding how well a firm is performing financially is the statement of cash flows
D) ratio analysis is ineffective
E) look at multiple years of an income statement rather than a single year to fairly assess how well a firm is performing financially
Q3) Describe the purpose of the income statement, the balance sheet, and the statement of cash flows.
Q4) Describe each of the four primary financial objectives of firms.
Q5) What is ratio analysis? Why is it important?
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Chapter 9: Building a New-Venture Team
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Sample Questions
Q1) An advisory board can be established for general purposes or can be set up to address a specific need.
A)True
B)False
Q2) SCORE is a for-profit organization that provides consulting services to small businesses.
A)True B)False
Q3) It is generally believed that new ventures started by an individual have an advantage over those started by a team.
A)True
B)False
Q4) Consultants fall into two categories-paid consultants and consultants who are made available for free or at a reduced rate through a nonprofit or government agency.
A)True
B)False
Q5) What is the difference between a heterogeneous and a homogeneous founding team? Which type of team has the advantage?
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Chapter 10: Getting Financing or Funding
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Sample Questions
Q1) What is a business angel? Describe the prototypical business angel. How much money do business angels typically invest in a single company?
Q2) The three primary reasons startups need funding are ________.
A) cash flow challenges, capital investments, and lengthy product development cycles
B) business research, cash flow challenges, and costs associated with building a brand
C) bonuses for members of the new venture team, attorney fees, and lengthy product development cycles
D) attorney fees, capital investments, and marketing research
E) bonuses for members of the new venture team, marketing research, and personnel costs
Q3) The SBIR and STTR programs provide entrepreneurs access to mentors, advisors and potential investors rather than cash.
A)True
B)False
Q4) Why do most firms need funding? Provide a brief explanation of each reason.
Q5) What is an elevator speech? How did it get its name?
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12
Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) What is a brand? How does a new firm develop a brand?
Q2) Katherine Ford is thinking about starting a computer company. After doing some research, she has decided that the computer industry can be divided into the following product categories - handheld computers, laptops, tablet computers, PCs, work stations, minicomputers, mainframes and super computers. She is now trying to decide which product category she is the most interested in competing in. The process that Katherine is going through is called market ________.
A) splitting
B) subdividing
C) segmentation
D) dividing
E) separating
Q3) In cost-based pricing, the list price is determined by estimating what customers are willing to pay for a product and then backing off a bit to provide a cushion.
A)True
B)False
Q4) What is an exclusive distribution agreement? Why do firms enter into exclusive distribution agreements with other firms?
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13
Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) The Savvy Entrepreneurial Firm feature in Chapter 12 focused on provisional patent applications. The main point of the feature is to illustrate that filing a provisional patent application effectively takes ________.
A) substantial financial resources
B) a substantial commitment of time and effort
C) very little effort
D) some finesse
E) substantial expertise
Q2) Which of the following are the four key forms of intellectual property protection?
A) Patents, copyrights, trademarks, and trade secrets
B) Discoveries, covenants, trademarks, patents
C) Patents, official documents, copyrights, inventions
D) Discoveries, Internet domain names, innovations, trademarks
E) Convents, inventions, opportunities, and copyrights
Q3) The average time for the approval of a patent is approximately seven months.
A)True
B)False
Q4) What is a copyright? What is protected by a copyright?
Q5) What is a trademark? Why are trademarks important?
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) Moral hazard means that as the number of employees a firm needs increases, it becomes increasingly difficult for it to find the right employees, place them in appropriate positions, and provide adequate supervision.
A)True
B)False
Q2) Do most firms want to grow or are they reluctant to grow? What are the advantages of growth?
Q3) What is the organizational life cycle and why is it important?
Q4) According to the textbook, the toughest decisions regarding business growth are made in the ________ stage of the organizational life cycle.
A) introduction
B) early growth
C) continuous growth
D) maturity
E) decline
Q5) A business's early growth stage is generally characterized by increasing sales and heightened complexity.
A)True
B)False
Page 15
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) The ________ is the company that owns the intellectual property. The ________ is the company purchasing the right to use it.
A) endorsee; endorser
B) licensor; licensee
C) licensor; endorsee
D) endorser; endorsee
E) licensee; licensor
Q2) In regard to acquisitions, many firms have found that the process of assimilating another company into their current operations is relatively easy and is not disruptive to the current operations of their firm.
A)True
B)False
Q3) Work that is done for a company by people other than the company's full-time employees is referred to as ________.
A) insourcing
B) farming-out
C) personnel extension
D) outsourcing
E) capacity enhancement
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Page 16
Chapter 15: Franchising
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Sample Questions
Q1) Franchisees are often required to pay into a national or regional advertising fund, even if the advertisements are directed at goals other than promoting the franchisor's product or service.
A)True
B)False
Q2) Which of the following is not an advantage of buying a franchise?
A) A proven product or service within an established system
B) Franchisor ongoing support
C) Availability of financing
D) Potential for business growth
E) Duration and nature of the commitment
Q3) Which of the following is not an industry in which business format franchises predominate?
A) Soft drink bottlers
B) Business services
C) Hotels and motels
D) Quick service restaurants
E) Automotive service and repair
Q4) List and explain three of the common misconceptions about franchising.
Q5) How can a person tell if franchising is right for them?
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