Module 7: Entrepreneurship Practice Guide Exam Questions & Answers Graded A+.

You are president of a small business industry association that has been called to testify before the U.S. Congress. Due to budget constraints, there is fear that funding for the Small Business Administration (SBA) might be cut. Which of the following are facts about small business in the U.S. that you would use to argue against cuts to the SBA? Select all that apply. - correct answer b, c ,f b. Small businesses employ over 40% of high-tech workers. c. The vast majority of all firms with employees are small businesses, making them a huge source of jobs for our economy. f. Over 50% of net new jobs come from small businesses. Many corporations have chosen to downsize and outsource to remain profitable. As a result, many talented individuals have been forced to find other sources of employment. Corporate downsizing - correct answer b. has led to an increase in small business formation because corporations often have specialized needs that can be filled by former employees. Government policies, access to resources, and social attitudes can either support or hinder a culture of entrepreneurship. Categorize each example below as either supporting or hindering a culture of entrepreneurship by selecting the appropriate choice from the drop-down menu. - correct answer a. support b. hinder c. support d. hinder e. support f. support g. hinder Studies show that approximately 4% of those surveyed between the ages of 16 and 29 in the United States are self-employed. The percentage increases to 11% for those between the ages of 30 and 49; to 15% for those between the ages of 50 and 64; and to 25% for those 65 years of age and older. This is a good example of how small businesses contribute to our economy by providing _____. - correct answer employment You have decided to start a pet care business near your home. You are drafting a business plan to present to the bank when applying for a loan. For each task below, choose which part of the business plan is described. - correct answer a. marketing plan b. financial projections c. product description and market analysis d. operations plan You are opening a small appliance repair business to serve your local community. You need funds to purchase tools, testing equipment, and appliance repair manuals. You also need to lease and renovate a facility. Your likely source of funds for this start-up business is _____. - correct answer home equity loan a. During your performance review, you are asked about your goals at the company. You mention the desire to become a vice president someday. While it's true that very few employees from your level have ever risen to become a VP, you believe in your ability to overcome the odds and reach that goal. - correct answer Internal drive b. You are on a team that meets to solve a problem with the current marketing campaign. After reviewing various options, the team can't decide on the best way forward. You make a case for what you believe is the best solution by laying out the rationale and asking for support. The team agrees with you and elects you to lead implementation of that solution. - correct answer confidence c. Your company has been making the same product lines for years now, but you believe there are many opportunities for expanding the product mix and reaching out to entirely new markets. So, you put together a strategy document to share with your supervisor. - correct answer vision d. You have been staying late to finish up the latest product launch, but you feel great. It has been a dream of yours to see the company bring this new product to market. - correct answer energy CBRE is a large real estate company with offices all over the world. A key part of their marketing strategy is to hold networking events each month. Instead of managing these events themselves, CBRE outsources event planning and management to small, independent vendors in each city. Which of the following statements are true about CBRE's outsourcing strategy. Select all that apply. - correct answer a. It is likely less expensive to outsource the planning of local events than to have event planners on staff. b. Since all of these events are local, there is no real advantage to creating a large, centralized planning department at CBRE. Joe Beanne, of Cup of Joe Coffee Shop, is putting together a business plan and needs to know which of the following he should include as components of the plan? Select all that apply. - correct answer a. Joe sells coffee and donuts b. $30,000 is needed for renovations to the space he rents d. Will open by spring and will be profitable by year 2 e. There are a lack of coffee shops in the area It can be challenging for startups to access most outside sources of funding. You mentioned this when your good friend Colby confided in you that he really wants to finish school quickly so he can get on with his career as a music performer. But he needs about $50,000 to record his first album and go on a short tour to promote it. Colby mentions that in today's music industry, artists often make more from touring than from album sales - but the album is needed as a platform for promoting yourself as an artist. Colby's uncle has said that he might be willing to provide these funds if Colby can first show that there is a market for his work and that he can make a living at this venture. In other words, Colby must provide "proof of concept" before he's willing to invest. Select the items below that will help Colby provide proof of concept. Select all that apply. - correct answer b. Using social media, Colby promotes one of his songs and builds a list of more than 300 people who prepay for the album. c. Colby performs a concert at a local hangout, charging $10 per ticket and selling the place out. You have opened a small business that is now thriving to the point where expansion is possible. You project moderate, but steady, growth for the next several years. Which source of funding best fits your situation and needs? - correct answer d. bank loan Your family has owned an Italian restaurant since before you were born. In the last 5 years, your family has opened three new locations - all of which have been successful. Now your family is considering moving to a franchise business model. They ask you to specify how the franchise will be set up. You create an arrangement where there are many advantages for the franchisee. However, there is one tradeoff that could drive away potential franchisees. What is it? - correct answer a. The franchisee will cover the cost of remodeling the franchise location. You decide to leave your current job and open a picture frame franchise. The franchisor is rather large, with over 150 stores nationwide. In preparing to purchase the franchise, you recognize the need to set money aside for startup expenses. You will need to set aside money for which of the below items? Select all that apply. - correct answer a. The cost of purchasing framing materials to get started b. The cost of remodeling the facility that you have selected d. The payment of a franchise fee to the franchisor You developed a new social media service that revolutionizes how individuals interact with one another throughout the day. Within a year, this new business dominates the social media landscape and accumulates 400 million active users worldwide. You have been able to do this all with a dedicated staff of only 25 employees. Because your growth rate is so high, you'd like to avoid venture capital funding for now. You would rather get a loan for expansion and retain all of your company equity for when you go public. Your accountant tells you not to worry, because the Small Business Administration was created to help