MGMT Chapter 1

What percentage of net new jobs do small businesses create annually?
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What percentage of net new jobs do small businesses create annually?
from 60 to 80 percent
The number of people who make small business their primary occupation is which of the following
12 million
Ronald Meese is the owner and operator of Meese Mining. To be considered a small business for crediting purposes, what is the maximum number of employees that Ronald can employ?
500
. Industry classification codes that are based on annual sales revenue or number of employers are abbreviated as
NAICS
The industry that employs the greatest number of people in small business is which of the following?
Services
What percentage of businesses in the service sector are small?
71%
William Smith works for an automobile company that generates an annual revenue exceeding $200 million, but accounts for less than one percent of the global automobile market. Based on this information, the company that William works for would be considered a
small business
Although Small Business Administration (SBA) standards allow up to 500 employees in some types of businesses, the most common limit is
100
Until the early 1800s, most goods were produced
by workers in their cottages
The term economy of scale refers to which of the following?
Decreasing costs through the productiantities
The marketing concept was a paradigm shift that involveda focus on consumer wants and needsWhat startup business of the 1960s used flatter organizational structure, improved customer service, and more flexibility to knock Sears out of its role of world's largest retailer?Wal-MartWhy has the number of students studying entrepreneurship increased so dramatically since the early 1970s?More small businesses are being formed and the cost of mistakes is higherWhat is the annual revenue currently generated by Hispanic-owned businesses?$222 billionSBA 8(a) certification provides preference in bidding on federal and state contracts towomen and minoritiesSince 2002, the share of women owning their own business increased by what percent?38John Deere relies on hundreds of vendors to produce component parts for its farm equipment. This illustrates which secret of small business success?A symbiotic relationship exists between small and large businesses.The chemical producer, Hoechst Celanese, found that diversity in the work force was particularly beneficial in which area?problem solvingSmall businesses are more able than big businesses to perform efficiently in which of the following areas?distributionWhich of the following are the inherent factors that work in favor of small businesses?ability to remain flexible and innovativeThe ability to offer greater value than one's competitors is called which of the following?competitive advantageThe stronger and more sustainable the competitive advantage a small business maintains, the better the chances ofwinning and keeping customersYou have a small business that offers printing services. One of the services you offer is a high-speed color copier. You are currently the only printing service in a tristate area that offers such a service. You currently havea competitive advantageLarge telecommunications companies have an incentive to improve existing lines of products and services to better serve their customers, rather than invent new products. This best demonstrates what aspect of innovation in business?Real innovation tends to come from independent inventors and small businesses.In order to take advantage of economies of scale, large businesses usuallydevote resources to produce large quantities of productsThe incentive for innovation of new ideas and products is generally strongest forsmall businessesInventing a new way to organize physical inputs to produce a product or service refers toprocess innovationLinda Waters, a chemical engineer at a large pharmaceutical company, has lead a team to develop a new drug that effectively treats the common flu faster than any other drug on the market. This is an example of what type of innovation.product innovationCreating a new way to organize a business's resources involvesmanagement innovationThe most common types of innovations produced by small business relate toservice and productsThe process of creative destruction involves which of the following?the replacement of existing products with new and better productsBig business competes based on mass production and, thus, lower prices. Small business can compete based onpersonalized services and productsAllen Campbell's small tire business has recently closed due to credit foreclosure. This is an example ofbusiness failureThe valuable skills and knowledge that employees of a business possess are collectively calledintellectual capitalThe lifeblood of any new small business is which of the following?cashThe most valuable asset a small business owner has isemployeesIntellectual capital is the skill and knowledge possessed bythe small business employeesA business failure occurs when a business closes for any of the following reasons excepta mergerThe most common cause of business failure islack of management experienceA common cause of business failure isindustry weaknessSam closed the doors to her home-based consulting company only two years after opening because she was tired of working 80-hour weeks. This is an example of which mistake leading to business failure?failing to understand the level of commitment requiredA business failure occurs when a businesscloses with financial losses to creditorsA partnership that is restructured or a business that moves to a new location is considered to be which of the following?business terminationAccording to the U.S. Census Bureau, approximately ______ of closed businesses were successful at the time of their closure.one-thirdWhich percentage of small businesses are actually forced out of business with financial loss to creditors?20 percentScenario 1-1. Larry Linsuine is thinking of marketing a new idea he has been using. After years of experience as a deer hunter, he has perfected a tree stand that gives him an added advantage in deer hunting. He calls his new tree stand The Tree Hugger. He has now begun the process of manufacturing his tree stands with 20 employees working out of his garage. His life savings have provided the equity for his operation. NARREND . In Scenario 1-1, what type of business is Larry beginning?small businessScenario 1-1. Larry Linsuine is thinking of marketing a new idea he has been using. After years of experience as a deer hunter, he has perfected a tree stand that gives him an added advantage in deer hunting. He calls his new tree stand The Tree Hugger. He has now begun the process of manufacturing his tree stands with 20 employees working out of his garage. His life savings have provided the equity for his operation. NARREND In Scenario 1-1, what advantage will Larry have over his competition with his new product?competitive advantageScenario 1-1. Larry Linsuine is thinking of marketing a new idea he has been using. After years of experience as a deer hunter, he has perfected a tree stand that gives him an added advantage in deer hunting. He calls his new tree stand The Tree Hugger. He has now begun the process of manufacturing his tree stands with 20 employees working out of his garage. His life savings have provided the equity for his operation. In Scenario 1-1, what will be the most difficult problem that Larry will encounter?obtaining sufficient cashScenario 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, the valuable skills and knowledge that Franky's employees possessed is known asintellectual capitalScenario 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, what is the primary reason Franky has failed?inadequate management