Canadian Entrepreneurship And Small Business 9th Edition – Test Bank

 

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Sample Questions

c4

Student: ___________________________________________________________________________

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

 

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

 

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

 

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

 

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

 

6.   Writing a business plans 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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.                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

 

14.                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

 

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

 

16.                A saturation index refers to
A. the number of units of product 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 product in retail outlets
D. the age and history of a product

 

17.                The following advice is offered to new entrepreneurs
A. it is good business to risk your own savings
B. assume that you could possibly lose at least half of your personal investment in a business
C. if you are very confident of your likely success, don’t be distracted by thoughts of losing it all
D. don’t risk more than you can afford to lose

 

18.                Business owners would consider incorporation mostly because
A. they wish to limit liability
B. it presents a more sophisticated looking image
C. they are confused by partnership arrangements
D. it makes them feel successful from the beginning

 

c5

Student: ___________________________________________________________________________

1.   It is argued in the text that the most significant advantage of buying a business is
A. it has already been registered with the authorities
B. it has inventory
C. it has an established image and track record
D. to avoid being sued

 

2.   According to the text, most businesses that are for sale
A. are only marginally successful
B. have valuable locations to transfer to a new owner
C. provide a steady base on which to expand
D. have a solid banking arrangements in place

 

3.   Goodwill
A. is the process of extending credit to needy customers
B. measures the added value in a product
C. always exist so long as a business operates
D. is essentially a business’s favourable reputation

 

4.   Common sources of businesses for sale include
A. supermarket ad boards
B. trade journals
C. yellow pages (hard copy or web based)
D. FAQ pages

 

5.   If a business is not listed as being for sale
A. its privacy should be respected
B. then it won’t be for sale
C. it’s not worth investigating it
D. a prospective purchaser can ask the owner if they would be interested in selling

 

6.   Government Departments
A. are not likely to be aware of business for sale
B. are never connected with individual businesses
C. may be aware of businesses for sale
D. often act as brokers in connecting purchasers and sellers of businesses

 

7.   Industry analysis may not be required if
A. a buyer has considerable experience in the industry
B. the cost to do so would be prohibitive
C. there is no information readily available
D. the industry is not dominated by one large business

 

8.   When purchasing a business, non-liquid assets
A. should be considered not to have any value
B. should be subjected to an independent appraisal
C. should by ignored for business planning purposes
D. should be valued at 20% of total fixed assets

 

9.   Strong customer relations is usually an indictor
A. of a market with few competitors
B. of a high demand product or service
C. of good management and employees
D. of low pricing

 

10.                Market value is
A. the price where demand and supply meet
B. the lowest amount that a seller will accept in the market
C. the average of the three most recent sales transactions in an industry
D. the net realizable value of a business’s fixed assets

 

11.                The times earnings method is also called
A. productivity velocity method
B. return on investment accelerator
C. efficiency measure
D. the price-earnings ratio

 

12.                An offer to purchase will most likely be made
A. to the seller’s CEO
B. by the buyer or through a realtor or lawyer
C. by the buyer’s banker on behalf of the buyer
D. anonymously (until accepted)

 

13.                One of the attractive benefits of being a franchisee is
A. future income is a high certainty
B. it can replace a lost job
C. there is no need to learn about an industry in depth
D. the total freedom of owning your own business

 

14.                According to research traditional franchise businesses include
A. hotels
B. construction
C. retailing
D. soft drink companies

 

15.                The fastest growing sector in the Canadian economy is
A. the service sector
B. the professional sector
C. the manufacturing sector
D. the import/export sector

 

16.                Under a franchising arrangement
A. a franchisor owns an outlet
B. both the franchisor and the franchisee operate an outlet
C. a franchisee owns an outlet
D. a franchisee develops the best system for their outlet

 

17.                ________ is a type of franchise
A. Manufacturer-retailer
B. Wholesaler-retailer
C. Retailer-service depot
D. Franchise developer

 

18.                A franchise system can best be characterized as
A. a voluntary chain
B. a money making machine
C. a business excellence strategy
D. an approach to market dominance

 

19.                Established franchises can provide
A. guaranteed cash flow
B. franchisee success
C. instant brand recognition
D. healthy opportunities for franchisee creativity

 

20.                Franchisee training is most likely to involve
A. internet research
B. personal industry reading
C. competitor research
D. site visits

 

21.                Potential franchisees will usually have to provide
A. the names of relatives who have succeeded in business
B. collateral
C. a current health certificate
D. their work history

 

22.                A proven franchise offers
A. greater opportunity and more freedom
B. small market share and weaker competition
C. lower risk and higher financial investment
D. higher returns and reduced employee turnover

 

23.                Of the following elements, a potential franchisor should be concerned most about
A. supply chains
B. renewal and termination terms
C. hours of (business operation
D. future Canadian/US dollar exchange rates

 

24.                Franchises with territorial protection
A. are the most desirable
B. are increasing in frequency
C. are generally not possible
D. are illegal due to non-competition laws

 

25.                Becoming a franchisor
A. is a retirement strategy
B. is a way of reducing one’s management pressures
C. is inevitable in a successful business
D. is a form of entrepreneurship

 

26.                Secret shoppers
A. refers to customers who pretend not to be interested in making a purchase
B. means asking someone else to make your purchase in their name
C. is a strategy used by some franchisors
D. are used in by government agencies to detect tax fraud

 

27.                Future growth of franchising will
A. reduce employment numbers
B. make competition more difficult for small businesses in certain industries
C. result in less competition
D. lead to more monopolies

 

c7

Student: ___________________________________________________________________________

1.   A marketing plan is not
A. a generalized document
B. a guide for implementing marketing decision making
C. based on a collection of marketing details for future planning
D. an annually prepared document

 

2.   Most successful marketing plans are based on
A. the entrepreneurs commitment to the product
B. secondary and primary marketing research data
C. financial resources
D. a scattergun approach

 

3.   The marketing plan should be prepared _______ production or manufacturing decisions are made
A. after
B. at the same time as
C. before
D. without regard to when

 

4.   Marketing plans should
A. be developed from scratch each year
B. be repeated without being redrawn if they have worked well
C. be based on proven business intuition
D. provide for continuity from annual plan to annual plan

 

5.   A marketing system is
A. different then a marketing plan
B. the process by which you prepare a marketing plan
C. the same as the marketing plan
D. has more to do with business management than with marketing itself

 

6.   In connection with marketing, an owner manager
A. can do nothing to alleviate the consequences of certain external and uncontrollable factors
B. can do some things to effectively respond to certain external and uncontrollable factors
C. is rarely subject to uncontrollable factors
D. can monitor uncontrollable factors so as to avoid them

 

7.   The text identifies four important marketing variables. They are:
A. product, price, place, promotion
B. preferences, policies, placement, price
C. positives, promotion, preconditions, population
D. price, promotions, priorities, place

 

8.   Situation analysis refers to
A. where a business is likely to be in the near future
B. were a business is currently
C. where a business fits relative to its competition
D. where a business has been

 

9.   A company’s mission
A. outlines its position in society
B. describes the nature of the business
C. explains what profit levels the owner hopes to accomplish
D. reflects what customers want

 

10.                Psychographic segmentation
A. is based on psychological wellness in the target market
B. is based on personality types
C. requires psychological testing of customers
D. is based on buyer behavior

 

11.                a market segment that produces the most revenue
A. is the key to maximizing profits
B. is the most difficult to access
C. does not necessarily produce the most profit
D. produces the most loyal customers

 

12.                Consumers looking for lasting values and tangible benefits are most likely to be
A. in their 20’s
B. teenagers
C. seniors
D. non-existent

 

13.                CRM stands for
A. Customer Retention Methods
B. Customer Recall Monitoring
C. Customer Relationship Metrics
D. Customer Relationship Management

 

14.                Generally, it is recognized that
A. new customers are better sources of revenue than existing customers
B. it costs a business more to attract than to retain a customer
C. retaining customers can be more costly than attracting a new one
D. new customers and existing customers represent the same financial considerations

 

15.                The text recommends that chances of retaining a customer depend primarily on
A. relating to customers without change so long as it seems to be working
B. offering services that seem to be relevant to the market
C. sticking with existing business practices
D. customer satisfaction with the business

 

16.                Before developing a marketing strategy, goals and objectives should be
A. creative and broadly defined
B. consistent with the owners’ wishes
C. realistic and specific
D. subjected to ongoing and continuous revisions

 

17.                Marketing strategy and action decisions address the question
A. what is our favorite way to market?
B. what are our goals?
C. who is our target market?
D. how do we get there?

 

18.                Marketing action and strategy decisions budgets
A. are useful in preparing the business’s financial plan
B. are free standing
C. are unrelated to other budgets in the business
D. define borrowing needs

 

19.                Weak signals from a monitoring process
A. should be tracked until the end of the budget period
B. should lead to modification in the existing marketing effort
C. should lead to increase borrowing
D. should result in terminations of poorly performing employees

 

20.                Well prepared, marketing plans
A. should succeed as planned
B. are not possible
C. will likely not succeed exactly as expected
D. will result in respectable profits

 

21.                Product deficiencies often result from
A. rushing the product to market
B. corporate sabotage
C. poor consumer education
D. unacceptably low pricing

c10

Student: ___________________________________________________________________________

1.   Entrepreneurs are typically
A. strongest in marketing
B. weakest in production management
C. equally talented in production, marketing and financial management
D. weaker in areas of marketing and financial management than in managing the production process

 

2.   The owner-manager’s task is to
A. maximize production to utilize 100% of the business’s capacity
B. produce goods as quickly as possible
C. organize production so as to produce goods efficiently
D. ensure that production satisfies its customers’ demands

 

3.   TQM is
A. a small business certification of environmental compliance
B. a philosophy of management
C. a process of technical quality methodology
D. a traditional method of product pricing

 

4.   ISO 9000 is
A. an effective marketing tool
B. is a cost cutting strategy
C. a regulatory standard for global shipping practices
D. is an International Scheme of Organization for owner managed businesses

 

5.   Management must make sure that physical facilities
A. do not harm their public image
B. are efficient and up to date
C. match their competitors’ facilities
D. provide pleasant work space

 

6.   The interior layout of facilities can
A. dictate marketing strategies
B. determine staffing needs of the financial management area
C. impair the budget process
D. greatly enhance productivity

 

7.   Which of the following site factors are of minimum importance for a manufacturing business?
A. setback AND window space
B. space AND access
C. frontage AND access
D. building exteriors AND floor space

 

8.   which of the following site factors are of critical importance for a service business?
A. parking AND configuration
B. surroundings AND stairways
C. utilities AND expansion potential
D. age AND expansion

 

9.   Compared to product layouts, process layouts usually
A. are used in single product manufacturing environments
B. are more modern
C. are more expensive and require more management time to ensure efficiency
D. result in greater sales of product

 

10.                Process layout are based on the premise that
A. it is more efficient for product moves back and forth to processes
B. it is more efficient for processes to move back and forth to product areas
C. segregating processes is more important than outsourcing
D. outsourcing processes is more cost effective than purchasing equipment for use in house

 

11.                Product layout provides for economies of
A. scale and labor
B. volume and production
C. time and space
D. cost and time

 

12.                Production processes move to the product in
A. process layout
B. fixed position layout
C. small factories
D. high tech industries

 

13.                Different areas in a retail store
A. should be equally accessible
B. differ from one another in terms of productivity
C. are more or less comfortable for customer shopping purposes
D. all contribute equally to income

 

14.                Free flow layout refers to
A. a layout that gives customers more time to browse
B. retail stores that do not charge for shopping carts
C. a layout strategy often used in car dealerships
D. a design strategy that is available for free to down load from the internet

 

15.                For purposes of layout guidance
A. service firms are considered to be manufacturing operations with a retail customer base
B. service firms can be classified into a standard format
C. service firms mostly use the free flow strategy
D. service firms tend to be so diverse it is not possible to provide standard information

 

16.                Retail store product placement requires
A. determining profit contribution and customer preferences
B. charging premiums to suppliers
C. ranking profitability and identifying high traffic areas
D. municipal guidance by way of safety by laws

 

17.                In a small business, inventory management is important because
A. generally there are limited economic resources
B. customers will stop coming in to make purchases if inventory is not well managed
C. otherwise employees will not be happy
D. inventory variety is usually the key to success

 

18.                Order lead time refers to
A. the length of time before needing to reorder inventory items
B. the length of time taken to process an order and transport the item(s)
C. the length of time before a customer wishes to have goods delivered
D. the length of time before competitors begin to stock a specialty item

 

19.                A-B-C Analysis refers to
A. an inventory analysis systems that tracks Alternative Buying Choices
B. management’s analysis of Active Buying Customs in their industry
C. Activity Based Cost allocation in a retail store
D. an inventory management system which evaluates the efficiency with which products A, B and C are managed

 

20.                Shrinkage describes
A. reducing inventory levels due to sales without replacement of stock
B. decreasing purchasing power of sales dollars
C. loss of inventory
D. increasing inadequacy of floor space as volume increases