Small Business Final Exam Flashcards
Writing a business plan is largely a process of:
research, revision and rewriting.
The most common problem when writing a business plan is:
overcoming procrastination.
Entrepreneurship is best defined as:
risking time and money to make a profit.
It is best to have a partner whose personality is:
complimentary to yours.
The term micro-enterprise usually refer to a business that has fewer than:
5 employees.
Compared to the general population, successful entrepreneurs tend to be:
more confident in their abilities to influence their own futures.
Which of the following is a source of primary marketing research information?
A questionnaire or survey.
The first research priority for a new business is to determine
market potential.
Cash that owner takes out of the business for his/her peronal use is called:
Owners draw.
The Financial Statement that shows the financial position of a company at a particular moment in time is the:
balance sheet.
Liabilities are:
legal debts.
The break-even point is where:
a company’s expenses are covered, a company starts to make a net profit, the income from sales is equal to all of a company’s costs and expenses.
Supporting material included in a business plan appears in the:
appendix.
The majority of dissatisfied customers:
do not complain to the service provider, tell numerous others about the problem, can be kept as customers if the problem is resolved.
The pricing strategy of a business should be based on:
a break even analysis.
True/False: All business plans follow the same 5 section model.
False
True/False: The skills and traits that employers are looking for and the skills and traits needed to own a business are virtually identical.
False
True/False: If the owner of a sole proprietorship is killed, the “business” no longer exists as a legal entity.
True
True/False: The greater the variety of potential customers that a new business has, the easier it is to identify the target market.
False
True/False: A new business must make sales projections for at least five years.
False
True/False: “Competitive” pricing means pricing lower than your competition.
False
True/False: Advertising and marketing are the same thing.
False
True/False: It costs five times more to get a new customer than to keep an existing customer.
True
True/False: “Cold calling” refers to approaching customers with whom there has been no previous contact.
True
True/False: Sales “objections” are often raised by a prospect to avoid having to make a decision.
True
True/False: Equipment or materials you already own and will use in your business, are considered to be part of the start up costs of the business.
True
True/False: A corporation may be registered with either the federal government or a provincial government.
True
True/False: Bookkeeping and accounting are interchangeable terms.
False
True/False: Almost all businesses have some seasonal fluctuation in sales.
True
A business where the owner is officially a “legal shareholder” is called a:
corporation.
The simplest and cheapest legal form of business registration is a:
sole proprietorship.
Businesses similar to your own, in terms of size, location, services and the customers they are pursuing would be classified as:
direct competition.
People or businesses ‘most likely’ to purchase your product or service are known as your:
target market.
Effective marketing delivers a strong message using an appropriate:
medium.
By deducting your personal liabilities from your personal assets you determine your:
net worth.
The M in SMART goals stands for:
measurable.
A “profitable” business can still go bankrupt because of problems with:
cash flow.
When business revenue equals business expenses, the company has reached the:
break even point.
Assets pledged to secure a loan are known as:
collateral.
True/False: It is much easier to lower your price than it is to raise your price.
True.
Name the funding sources:
Personal Resources Love Money Government Programs Financial Institutions Partners and/or Investors Alternate Sources
What is the most common method of financing a micro business?
Personal resources.
The best funding comes from the:
positive cash flow.
Rolling profits back into the business can reduce or even eliminate the need to seek:
funding from outside sources.
Love money is from:
friends and family.
True/False: You should write up a basic agreement outlining the terms and conditions of this funding and have all relevant parties sign it.
True.
True/False: It is a popular misconception that there are hundreds of government programs out there throwing money at new business start ups.
True.
True/False: Financial institutions are primarily interested in the owner/operators ability to repay the loan.
True.
True/False: The majority of small business loans do not require personal guarantees from business owners.
False.
True/False: The higher the risk, the higher the interest rate.
True
What are the 5 C’s of Credit
Character Capacity Collateral Capital Credit History
Having partners and/or investors are referred to as
equity financing.
True/False: Partnerships, in any form, are the riskiest of new business start up formats.
True
No partnership, under any circumstances, should begin operation without a written:
partnership agreement.
