SMALL BUSINESS MANAGEMENT EXAMS UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

SMALL BUSINESS MANAGEMENT EXAMS UPDATED
ACTUAL QUESTIONS AND CORRECT ANSWERS

Question:
1. Lack of marketing experience is one of the major problems faced by small business owners. True False
Answer:
False

Question:
2. Scenario 1-2. Franky Ferguson has just reached a turning point in his business. He can no longer retain
quality employees because he cannot meet his payroll, he does not have an adequate cash flow to pay his
current bills, and he is three months behind in his loan payment to the bank. He must close the doors of this
business.In Scenario 1-2, which of the following are areas should Franky have worked on in order to help
ensure the success of his business?
managing finances applied for credit for short-term financing increased his advertising budget laid off
some employees
Answer:
managing finances

Question:
3. According to the Small Business Administration, 50 percent of all small businesses are home based.
True False
Answer:
True

Question:
4. Most small businesses use market research as the primary means of learning about customers. True
False
Answer:
False

Question:
5. Creative destruction refers to the failure of small businesses due to fault of their own. True or false
Answer:
False

Question:
6. Interest in entrepreneurship on campuses is high, with almost 2,000 colleges offering courses on the
subject. True False
Answer:
True

Question:
7. Until the early 1800s, much of the U.S. economy was based on agriculture. True False

, Answer:
True

Question:
8. An entrepreneur faces which of the following environmental forces?
fighting government regulations hiring and retaining employees identifying product opportunities dealing
with vendors and suppliers
Answer:
identifying product opportunities

Question:
9. Which of the following behaviors was not cited as being included in most definitions of an
entrepreneur? controlling innovation creation risk assumption
Answer:
controlling

Question:
10. Personal characteristics vary as a business evolves from one stage to another. True False
Answer:
true

Question:
11. The foundation on which all other goals and strategies are based is a ______. mission statement list of
company goals statement of intentions code of ethics
Answer:
mission statement

Question:
12. The level of social responsibility that has historically been the focus of business is ______. economic
legal philanthropic ethical
Answer:
economic

Question:
13. Which level of social responsibility is concerned with a business doing well without the expectation of
anything in return? legal obligations economic responsibility ethical responsibility philanthropic goodwill
Answer:
philanthropic goodwill

Question:
14. A business plan says nothing about the level of financial and professional knowledge a potential small
business owner has acquired. True False
Answer:
false