ESB Pre-test

A head chef conducts a survey of other restaurants in the area. The chef notices that most customer complaints primarily come from takeout orders being delayed. The chef believes that having a short-order cook dedicated to preparing carryout orders will make his restaurant the fastest and most dependable place for takeout customers.

By spending scarce resources on hiring a short-order cook, what competitive advantage factor is the chef trying to achieve at his / her restaurant?

• quality

• service

• selection

• location

What is considered to be a primary risk for an entrepreneur who is launching a start-up company?

• high tax brackets

• personal financial insecurity

• inability to get required government approvals

• globalization of production

What is a key benefit buying an existing small business versus launching a start-up?

• Easier to finance a business purchase than a business start-up

• centralized buying power

• access to management training

• easier to change an existing small business than a business start-up

A travel agent wants to start-up a new travel company. He pays a market research company to survey 100 frequent affluent vacation travelers about luxury travel options. The market research responses:

· 50% would book hotels (additional customer expenditure would be $400; agent commission is 10%)

· 20% would book sight-seeing trips (additional customer expenditure would be $100; agent commission is 8%)

· 30% would book air flights (additional customer expenditure would be $400; agent commission is 6%)

· 60% would book rental cars (additional customer expenditure would be $200; agent commission is 12%)

Which luxury travel service would contribute the most to the profitability of the start-up business?

• hotels

• air flights

• rental cars

• sight-seeing trips

A new auto mechanic business wants to grow revenues. What are marketing methods that promise to create new customers?

Pick the two best answers.

• sending discount coupons to car owners who live within 5 miles of the shop

• giving current customers a loyalty discount

• offering car washes on Saturdays, whether the car is being serviced or not

• giving current customers free service when they refer two new paying customers

A fitness trainer is presenting a business plan for a new studio to investors. The trainer envisions a studio with equipment and features that will meet the needs of customers with a variety of personal and work schedules.

What studio feature would appeal to customers with demanding schedules?

• Providing 24 hour member access

• Adding digital marquee at gym entrance

• Selling workout clothes in new onsite shop

• Developing nutrition website for customers

When an entrepreneur convinces outside investors to contribute equity to the new venture, which is true?

• Investors have no say in the management or direction of the business

• Dividend payments must be made, but only based on the seasonal sales of the business

• The business will not have to take out any loans – investors contribute all the funds the enterprise will need

• Investors do not earn a return (dividends or increased stock price) if the business does not make a profit

What is a consequence for a real estate agent who violates confidentiality by discussing the client's personal income after work at a party?

• forfeiture of commission

• probable loss of current and future clients

• seizure of client documents

• this would be frowned upon, but not a cause for real concern

A mechanic is opening a new business and needs to hire employees. Select the correct placement of these tasks for this process in order.

• write the job profile, post the advertisement, identify the skills needed, review qualifications of applicants

• post the advertisement, review qualifications of applicants, write the job profile, identify the skills needed

• write the job profile, identify the skills needed, post the advertisement, review qualifications of applicants

• identify the skills needed, write the job profile, post the advertisement, review qualifications of applicants

The owner of a growing landscaping company with 30 employees has decided to outsource the payroll and payroll-related functions of the business.

Which responsibility would be included in this outsourcing?

• Benefits administration

• positioning the company

• identifying new customers

• analyzing markets for expansion