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The statement of purpose in a business plan should be:
No more than one or two paragraphs
The appendix to a business plan would likely include
A copy of the owner's resume
What type of business is the plan that manufactures polo clothing
Manufacturing business
Lexi decides to open a shoe store. She is operating a _____ business
Retailing
Things that a person owns are called:
Assets
The list of people who receive salary or wage payments from a business is called a
Payroll
The ____ is a financial statement that shows how much money is available to pay bills
Cash flow statement
Cash sales and cash payments received from customers on their credit accounts are recorded in the
Cash receipts journal
Credit card fraud is an example of
Human risk
___ is not one of the basic strategies for dealing with risk
Denying the risk exists
An insurance agent may not
Earn greater commissions for less claims on policies sold
___ is not a risk associated with doing business in another country
Insurance
Product characteristics that will satisfy consumer needs are called:
Features
Establishing informal ties with people who can help your business grow is called:
Networking
Conducting a risk assessment does not involve:
Designing a plan to cover risks
An entrepreneur will not use _____ for recruiting:
Freelancers provide specialty services to businesses:
On an hourly or by the job basis
Family medical leave act of 1993 requires businesses with more than fifty employees to provide employees up to ____ months of unpaid leave if a serious health condition affects the employee, the employee's child, or the employee's parent or spouse
3
Payroll income taxes must be paid ____ by the employer
Quarterly
Every month businesses must pay sales taxes to the
Local and state gov
Income tax in the US is a ____ tax
Progressive
_____ state that a worker at a union company does NOT have to join the union or pay union dues to keep his/her job
Right-to-work laws
Union efforts to force employees to hire more workers than demanded for the task is referred to as:
Featherbedding
The biggest disadvantage of public relations is the:
Difficulty to predict and control
ADA was enacted to prevent discrimination when hired based upon:
Disabilities
______ is the process of growing more ethically mature
Moral development
_____ is the practice of advertising a product at a low price while intentionally stocking only a limited number in hopes of luring shoppers to buy more expensive items
Bait and switch
Immediate transfer of ownership of goods from a seller to a buyer for a price is called a:
Sale
_____permits a party to a contract to recover money or property given to the other party
Restitution
Co-ownership of property without the right of survivorship is called:
Tenancy in common
A business plan is
A selling document
In writing a business plan, an entrepreneur should remember that
Certain features will be appealing to investors, while others are distinctly unappealing
Which of the following groups would be most interested in a business plan for a new venture?
Bank executives
A business plan should generally include financial projections of the proposed business for the first
3-5 years
Investors are likely to consider a new business proposal unfavorable if it
Focuses on the product or services
It is most important that the marketing plan
Identifies user benefits
In a business plan, the competition would be discussed in the
Management plan
Ideally, investors like a business plan that shows evidence of
A well-balanced managerial team
In a business plan, the facilities and location of the proposed venture are described in the
Operating plan
The marketing plan should follow the establishment of user benefits and document the existence of
Customer interest
A poorly conceived business concept
Cannot be rescued by a well written business plan
Plans that appeal to investors are
Market-oriented
John Halloran is a prospective entrepreneur who has just presented his business plan to an investor, enthusiastically pointing out the unique features of a new invention he is promoting. The most likely question in the investor's mind is:
What is the market demand for the product?
In the context of planning a business, an operating model can be viewed as:
A methodology that describes the way every aspect of the business is to be run
Investors who read business plans are thought of as
One-minute investors
Which of the following is not directly involved in a firm's management of its working capital?
Fixed assets
Excess cash should be
Invested
Which of the following is sometimes called "near cash"?
Accounts receivable
Inventory is called an evil because it
Ties up funds that are not actively productive
Assuming that cash is available, payment for an account payable with terms of 3/10, net 3 should be made on day
10
In making capital budget decisions, small business owners tend to rely, to a significant extent, on
Intuition
When a small business sells its accounts receivable to a finance company, this is called
Factoring
Failure to take cash discounts from suppliers
Typically makes a big difference for a small business, since a business benefits by use of suppliers money
One of the factors that influences the choice between debt and equity is the
Degree of control the owners hope to retain
When it comes to financing a company, a banker looks at two kinds of assets
Those founded upon past performance and those depending on future performance
Issuing stock rather than increasing debt does not
Reduce financial risk
One of the major sources of gaining startup capital for an entrepreneur is through
Commercial banks
Equity investors can not demand more than
What is earned
Equity investors can not demand more than
What is earned
The federal government provides small funds to small business through
The small business administration
The assets most commonly used for security by asset-based lending companies are
Equipment and buildings
A loan covenant is very likely to require
A fixed business strategy
Venture capitalist companies
Provide investment support to young companies
US business have recently shifted their focus toward an orientation
Consumer
A firm's marketing mix consists of ________________ activities
Product pricing promotion and distribution
Primary data collection methods are often classified as
Observational or questioning
In order to be appropriately considered a market a group of customers or potential customers must have
Purchasing power
Which of the following statements about a sales forecast is true
It is an essential part of a business plan
A ___________ estimates how much of a product or service will be purchased within a market over a defined period of time
Sales forecast
Entrepreneurs should base their market assessments, production schedules, inventory policies, and personnel decisions on
Sales forecast
Jackie Jones, an owner of a computer software shop, is developing warranty and repair policies for her business. What area of the marketing strategy is she addressing?
Total product or service
A characteristic of FICA is that
It has 2 components made up of social security and medicaid
A corporation
Is chartered under state laws
Which of the following legal forms or organization allows owners to contribute no capital, but still play a part in managing the business and sharing of the profits?
Partnership
In the event of corporate failure, which of the following types of stock can be treated as an ordinary tax-deductible loss
Section 1244 stock
S corporations are taxed as
Partnerships
To be eligible to be an S corporation a firm must
Have no non-resident alien stockholders
Unlimited liability for business debts is imposed on
Sole proprietors
A form filled out by an employee that provides the information needed to determine the proper amount to withhold from your paycheck is a
Form W4
The amount you earn after taxes are withheld is your
Net income
Skimming is an unethical business practice involving
Failure to report all income on tax returns
Temptations to act unethically are such that small business are
As vulnerable as large firms
One function of the Better Business Bureau
Provide customers information about local companies
There is a limit to the possible social responsiveness of small businesses because they must
Make a profit to survive
Environmentalism possesses the greatest threat to
Iron foundries
Consumerism affects small businesses most directly in the area of
Product safety
A small manufacturer is concerned about a possible cost disadvantage cause by expensive environmental requirements. She should realize that her firm's competitive position is best served by restrictions posed by
federal legislation
Bait-advertising attempts to
Lure customers with the intention of selling them a different product
A ______ is a word, letter, or symbol associated with a specific company or product
trademark
small businesses can protect their tangible assets by means of any of the following except
formal redress
