1) Entrepreneurial education:

a. more courses are being offered in entrepreneurship
b. has become extremely popular
c. universities are not able to meet the demand
d. all of the above

2) Which of the following is not a common characteristic of entrepreneurs?
a. Desire for responsibility
b. High energy level
c. Preference for moderate risk
d. Business plan expertise

3) More businesses fail because of ________ than for any other reason.
a. poor choice of location
b. incompetent management
c. insufficient capital
d. theft by employees

4) Earl was a financial consultant who liked to work with his hands, especially in making furni-
ture. He quit his rat race financial job to start a small custom furniture business. After strug-
gling for several years, he closed it and went back to financial services. Earl discovered that
there was a big difference between making furniture for himself and running a customer furni-
ture manufacturing business. Tom s business failed because of:
a. an inability to access start-up capital
b. poor financial control
c. his lack of experience
d. uncontrolled growth

5) The key ingredient-the crucial element-to avoiding the failure of a new business is:
a. technical expertise regarding the product
b. the business plan
c. knowing the business
d. differentiating the business and product from the competition

Unit 1 Examination

41
BAM 418 - Small Business Management

6) A knowledge based business economy favors small business because:
a. information technology is driving cost of managing and transmitting knowledge lower
b. small businesses are more successful
c. the cost of managing and transmitting knowledge is very low
d. Both A and C

7) Copreneurs are:
a. business magazines targeted towards entrepreneurs
b. entrepreneurial couples who work together as co-owners of their business
c. personality traits of entrepreneurs
d. none of the above

8) The most important change due to expansion occurs in:
a. organizational structure
b. personnel assignments
c. managerial expertise
d. inventory and financial control procedures

9) Customer service, convenience, speed and quality are all examples of:
a. learning to manage people effectively
b. generating more revenue
c. setting your business apart from others
d. small businesses

10) How is the strategic planning process for small companies different from that for large companies?
a. It should be conducted by top management and provided to lower management.
b. The process should be informal and not overly structured a shirtsleeve approach. 
c. The planning horizon should cover at least five years into the future.
d. The process should begin with setting objectives and conclude with competitive analysis.

16) A partnership agreement sets how the partners will be compensated. Normally,
a. both general and limited partners are permitted salaries, but all silent or dormant partners
are compensated only by sharing in the profits.
b. partners are not entitled to salaries or wages, but are compensated by a share of the profits
of the business.
c. while the agreement establishes payout schedules, it does not spell out what constitutes
profit.
d. the general partner s salary is set at 2 times the salaries of the limited partners.

20) Shares the corporation itself owns are called:
a. preferred stock
b. common stock
c. treasury stock
d. bonds
21) In franchising, the reputation of the franchiser is dependent on:
a. the quality of the goods and services provided
b. the brand name recognition and appeal
c. their locations and popularity with the local customer
d. the rate of growth and the number of national outlets