Small Business Management
Exam Questions
Course Introduction
Small Business Management explores the fundamental principles and practices required to successfully start, operate, and grow a small business. The course covers essential topics such as entrepreneurship, business planning, legal considerations, financial management, marketing strategies, and operational management specific to small enterprises. Students will analyze real-world case studies, develop a business plan, and gain practical skills in decision-making, leadership, and problem solving. Emphasis is placed on understanding the unique challenges faced by small business owners and cultivating the ability to adapt to dynamic market conditions.
Recommended Textbook
Entrepreneurship 9th Edition by Robert D Hisrich
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15 Chapters
1225 Verified Questions
1225 Flashcards
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Page 2
Chapter 1: Entrepreneurship and the Entrepreneurial
Mind-Set
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49 Verified Questions
49 Flashcards
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Sample Questions
Q1) Explain the McMullen-Shepherd Model.
Answer: 1.Model explains how knowledge and motivation influence two stages of entrepreneurial action.
2.Stage One is when the potential entrepreneur realizes an opportunity exists for someone.
3.Stage Two is when the potential entrepreneur decides whether or not the opportunity is right for them personally in terms of their skill,knowledge and motivation.
Q2) Role models can include family members as well as industry professionals.
A)True
B)False
Answer: True
Q3) The casual process of thinking starts with what one has and selects among possible outcomes.
A)True
B)False
Answer: False
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Page 3
Chapter 2: Entrepreneurial Intentions and Corporate
Entrepreneurship
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48 Verified Questions
48 Flashcards
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Sample Questions
Q1) Robert Mondavi came up with all of the following process innovations except:
A)steel fermentation tanks
B)vacuum corking of bottles
C)labels that indicated when the wine was cold
D)aging wines in new French oak barrels
Answer: C
Q2) Corporate ventures are totally independent units,hence the equity portion of the compensation is particularly difficult to handle.
A)True
B)False
Answer: False
Q3) Generally,independent,venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Entrepreneurial Strategy: Generating and Exploiting New Entries
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93 Verified Questions
93 Flashcards
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Sample Questions
Q1) Emerging industries are industries that have been around for years but are just starting to experience explosive growth.
A)True
B)False
Answer: False
Q2) Explain why an entrepreneur might adopt an imitation strategy.
Answer: Reduces the risk by:
-reducing research and development costs
-reducing customer uncertainty about the firm/established reputation
-established market demand
-protected name and products (IP)
-access to help with financial,marketing and managerial issues
Q3) When the window of opportunity is open,the environment is unfavorable for entrepreneurs to exploit a new product or enter a new market with an existing product.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Creativity and the Business Idea
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87 Verified Questions
87 Flashcards
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Sample Questions
Q1) The Gordon method,like most other methods,begins with group members not knowing the exact nature of the problem.
A)True
B)False
Q2) Reverse brainstorming is much like brainstorming except that:
A)criticism is not allowed.
B)the technique is based on finding solutions.
C)the group need not be careful to maintain good morale.
D)the process usually involves identification of everything wrong with an idea.
Q3) The entrepreneur should always design and build his own webpage to maintain strategic control.
A)True
B)False
Q4) Total internet spending was roughly _____ billion in 2011.
A)150
B)200
C)250
D)300
Q5) Give 5 examples of questions that could be asked using the checklist method.
Page 6
Q6) List,in order,the stages of the product planning and development process.
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Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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73 Verified Questions
73 Flashcards
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Sample Questions
Q1) All of the following is true of the General Agreement on Tariffs and Trade except:
A)it includes over 100 nations.
B)it reduces tariffs,subsidies,and import quotas.
C)it has extensive authority to enforce trade practices due to its voluntary membership.
D)it is one of the longest-lasting agreements on trade.
Q2) Explain the major factors an entrepreneur needs to consider in choosing the best distribution channel in a foreign country.
Q3) All of the following are government sources of information except:
A)Census reports
B)Export/Import Authority
C)NAICS and SIC
D)Hoovers
Q4) The Kaufmann foundation Provides resources for entrepreneurship education and research and lists the angel (private investor)groups throughout the United States.
A)True
B)False
Q5) List the seven various aspects of culture.
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Chapter 6: Intellectual Property and Other Legal Issues for the Entrepreneur
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76 Verified Questions
76 Flashcards
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Sample Questions
Q1) Licensing a trademark generally involves a franchising agreement.
A)True
B)False
Q2) It takes approximately ______ to obtain a trademark.
A)12 months
B)13 months
C)14 months
D)18 months
Q3) To prevent others from copying his or her ideas,the entrepreneur should not send drawings with the patent application.
A)True
B)False
Q4) The entire trademark registration process takes approximately:
A)7 months
B)13 months
C)18 months
D)2 years
Q5) Contracts for the sale of real estate must be in writing to be valid.
A)True
B)False
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Chapter 7: The Business Plan: Creating and Starting the Venture
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89 Verified Questions
89 Flashcards
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Sample Questions
Q1) Which of the following is not true about the operations plan portion of the business plan?
A)Only service businesses need an operations plan.
B)An operations plan describes the flow of goods and services from production to customer.
C)The role of technology in the business transaction process is discussed.
D)The shipping process and inventory control process can be discussed in this section.
Q2) The entrepreneur need not concentrate on environmental analysis since most of the external factors are generally uncontrollable.
A)True
B)False
Q3) Which U.S.Census publication gives statistics such as industry outputs,inputs,and operating data on manufacturing activity,by industry groups?
A)Service Annual Survey
B)Current Industrial Report
C)County Business Patterns
D)Annual Survey of Manufacturers
Q4) Explain the purpose and content of the executive summary of the business plan.
Page 9
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Chapter 8: The Marketing Plan
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89 Verified Questions
89 Flashcards
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Sample Questions
Q1) SaleSpider.com was started by:
A)Russell Rothstein
B)Sergy Bryn
C)Mark Zuckerberg
D)Google
Q2) The marketing mix consists of the following variables: external environmental factors,internal environmental factors,and marketing strategy.
A)True
B)False
Q3) When making decisions about pricing strategy,the entrepreneur should consider only costs directly associated with the product and ignore overhead.
A)True
B)False
Q4) Give examples of what types of goals should be set in the goals and objectives section.
Q5) Focus groups should be led by the entrepreneur.
A)True
B)False
Q6) Identify the 4 major considerations in distribution channel selection.
Page 10
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Chapter 9: The Organizational Plan
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91 Flashcards
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Sample Questions
Q1) Investors usually insist that the management team not operate the business as a part-time venture.
A)True
B)False
Q2) The corporation has the most continuity of the forms of business.
A)True
B)False
Q3) In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions?
A)Sole proprietorship
B)Limited partnership
C)General partnership
D)Corporation
Q4) Shares of stock are issued to members of a limited liability company.
A)True
B)False
Q5) Sole proprietorships usually use a calendar year for tax purposes.
A)True
B)False
Q6) Discuss the six main functions of a board of directors.
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Chapter 10: The Financial Plan
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88 Flashcards
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Sample Questions
Q1) Which of the following would not be a current asset?
A)Certificates of deposit that mature in six months
B)Customer receivables
C)Cash
D)Supplier bills payable in thirty days
Q2) The indirect method of projecting cash flow is the most popular.
A)True
B)False
Q3) ______ is projected net profit calculated from projected revenue minus projected costs and expenses.
A)Pro forma Income
B)Gross profit
C)Net sales
D)Cost of goods sold
Q4) Large positive cash flows usually occur in the first months of a new venture.
A)True
B)False
Q5) Assets represent the net worth of the firm.
A)True
B)False
Page 12
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Chapter 11: Sources of Capital
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Sample Questions
Q1) Most R&D limited partnerships are not successful.
A)True
B)False
Q2) The Small Business 7(a)Guaranty program:
A)guarantees up to 50 percent of the amount loaned.
B)helps qualified small businesses obtain financing when they cannot obtain it through regular lending channels.
C)has a maximum loan amount of $10 million.
D)loans can be used only for machinery and equipment,and land and building.
Q3) Under the Small Business Technology transfer (STTR)program,federal agencies with budgets over $1 billion are required to set aside 0.3 percent for small businesses.
A)True
B)False
Q4) SBA 7(a)loans can be used for such things as equipment and land.
A)True
B)False
Q5) The SBA's Microloan program is their primary business loan program.
A)True
B)False
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Chapter 12: Informal Risk Capital, venture Capital, and Going Public
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) Venture capital firms expect returns in the range of:
A)15-20%.
B)25-35%.
C)40-60%.
D)100%.
Q2) The valuation approach that gives the lowest value of the business is the earnings approach.
A)True
B)False
Q3) Early-stage financing is usually the least costly type of financing to obtain.
A)True
B)False
Q4) The future earnings capacity of the company is the most important factor in valuation.
A)True
B)False
Q5) What are the three types of risk capital markets?
Page 14
Q6) List three reasons why a Business Angel may reject a proposal.
Q7) Discuss the informal risk-capital market and key characteristics of business angels.
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) Which principle requires the entrepreneur to focus on the most important issues,even when under pressure?
A)Principle of desire
B)Principle of reanalysis
C)Principle of effectiveness
D)Principle of prioritized planning
Q2) Product development strategies use customers' experiences to develop new products for existing customers.
A)True
B)False
Q3) The grocery and pharmaceutical industries have developed a computerized system to link chain members together and manage demand,distribution,and marketing.
A)True
B)False
Q4) Using a large proportion of part-time workers:
A)provides the firm with flexibility.
B)makes building organizational culture easier.
C)improves worker commitment to the organization.
D)increases the overall productivity of the organization.
Page 15
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Chapter 14: Accessing Resources for Growth From External
Sources
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90 Flashcards
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Sample Questions
Q1) Terminating a franchise results in more lawsuits than any other issue in franchising.
A)True
B)False
Q2) Most ventures that are up for sale have good to very successful profit records.
A)True
B)False
Q3) Popular reasons to merge include protection,diversification and survival.
A)True
B)False
Q4) If a franchise looks good as an investment,the entrepreneur may request a franchise package from the franchisor at no cost,which usually contains a draft franchise agreement or contract.
A)True
B)False
Q5) What are the 4 major factors in joint venture success?
Q6) When negotiating,the entrepreneur should make only one offer and stick to it.
A)True
B)False
Page 16
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Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the Venture
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Sample Questions
Q1) Suggestions for surviving bankruptcy include all of the following except:
A)focus efforts on preparing a realistic reorganization plan.
B)understand how protection against creditors works.
C)file only after cash runs out.
D)maintain good records.
Q2) About one third of all new start-ups fail in their first years.
A)True
B)False
Q3) The sale of the company to employees is an exit strategy.
A)True
B)False
Q4) One key advantage of an ESOP is that it enhances employee motivation.
A)True
B)False
Q5) Chapter 11 is the type of bankruptcy that results in:
A)extended time payments.
B)liquidation.
C)reorganization.
D)turn around time.
Q6) Identify and define the three major types of bankruptcy. Page 17
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Page 18