Key Concept Quiz


1	When starting from scratch, one generally opts for greater independence in the establishment and operation of the business.
		A)	True
		B)	False


2	Franchising generally provides the highest level of independence and lowest level of risk for the new business owner.
		A)	True
		B)	False


3	The importance of __________ was the most significant lesson that Heidi Lang learned from establishing her trendy photo frames business.
		A)	Securing start up financing
		B)	Designing a unique product
		C)	Developing a business plan
		D)	Properly identifying the target market


4	A business plan should, at the very least, include:
		A)	The entrepreneur's security/collateral position
		B)	Cash flow statement
		C)	A detailed implementation plan
		D)	All of the above


5	The _________ provide(s) an overview of the plan and is mainly for the benefit of outside users:
		A)	Business objectives
		B)	Finance discussion
		C)	Table of contents
		D)	Personnel section


6	Jane Armstrong is starting her own business. Why should she first consider developing a detailed business plan?
		A)	It provides a blueprint which can assist in meeting business goals
		B)	It is required by almost all potential lenders/investors
		C)	A and B
		D)	None of the above


7	The business objective is a general statement outlining the organization's future direction in terms of the market, environment, strengths and management goals.
		A)	True
		B)	False


8	The most effective business objectives are:
		A)	Specific and Quantitative
		B)	General and long-term in nature
		C)	Qualitative and have a broad focus
		D)	None of the above


9	Uncontrollable factors may affect the marketing of a business' product or service and may include:
		A)	Existing or pending legislation
		B)	New Technology
		C)	Cultural norms of the market
		D)	All of the above


10	The essential elements of the marketing program in the business plan include the product or service, the distribution system, promotion and the facility location.
		A)	True
		B)	False


11	Alana Dunn is interested in determining the extent of competition of tow locations she is considering starting her business. She used the saturation index to calculate the level of retail competition. The saturation for each of the locations is as follows: Location A: 50 Location B: 25 Using the above saturation index, which location is most favorable for Ms. Dunn's new business start up:
		A)	Location A
		B)	Location B
		C)	Both are ideal
		D)	Both are unfavorable


12	Which of the following should be planned before the opening of the business?
		A)	Planning the accounting and bookkeeping systems
		B)	Determining the financial evaluation of operations
		C)	Establishing capital requirements and feasibility projections
		D)	All of the above


13	Limited liability is a major advantage of a sole proprietorship.
		A)	True
		B)	False


14	In a _____________ one or more partners has limited liability in exchange for not participating in the day-to-day operations of the business.
		A)	Sole proprietorship
		B)	General partnership
		C)	Limited partnership
		D)	Corporation


15	The success of Three Blondes and a Brownie can be attributed to:
		A)	The expertise that each partner brought to the business
		B)	The women's decision to incorporate their company
		C)	The dissolution of the original partnership
		D)	None of the above

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