Entrepreneurship and Small Business Pre-Test - ESB

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 of 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 on-site 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. Place the tasks for this process in order from first to last.

• Write the job profile

• Post the advertisement

• Identify the skills needed

• 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