Small Business Final Review

Flashcard maker : Lily Taylor
An entrepreneurial career can provide an exciting life and substantial rewards while also helping the welfare of society
According to the text the term entrepreneur refers to small business founders only
A primary reason for becoming an entrepreneur is to create a product or service that makes the world a better place.
A large percentage of small business owners cite their desire to their own boss as the man resource of their previous employers.
Persons who leave an undesirable work to go into business for themselves is an entrepreneurial refugee.
A refugee is a person who tried being an entrepreneur and failed and sought refuge in corporate employment.
small entrepreneurial firms cannot hold their own or gain an edge over successful firms
small firms have a great disadvantage when it comes to competing based on customer service.
many entrepreneurs are innovators.
paternalism is distinguishing characteristic between artisan and opportunistic business.
although the timing may vary for individuals the ideal age for starting is 35-50
false 25-35
most entrepreneurs are high risk takers
it is futile for small business to attempt to develop strategies that offer a company more exposure to mature businesses
new ventures are more often financed mostly with a founders personal savings rather than a plan provided by a venture capitalist.
many entrepreneurs are people of principle and integrity regulates their quest for profits
small businesses that practice skimming of income are acting unethically and illegally
temptations and pressures act to unethically are thought to be greater in big business than in small business
the essence of ethical relativism is captured in the following statement: when in rome do as the romans
Judeo-Christian values have traditionall been left in churches and have no impact on the marketplace
the goodwill gained from benefiting the community may be worth more than it’s cost
the BBB is a government agency that encourages ethical business practices
in most cases environmentalism have contributed to the profitability of small firms
the interest of small business owners and environmentalists are not always in conflict
the ethics resource center has adapted a 6 step process to help small businesses se issues more clearly and make better, more ethical decisions.
which statement is an example of an economic trend?
the federal reserve announces that it will decrease the interest rate charged.
substitute products
are usually cheaper than the products they can replace.
A SWOT analysis can be described best as:
a concise overview of the firms strategic situation.
generally speaking a strategy is:
an action plan that guides resource investments
the two board strategies for building a competitive advantage are the _______ strategies
cost based and differentiation based
a differentiation based strategy requires that a firm
emphasize the uniqueness of its product or services.
Mark is the owner of Delectable delights a specialty store offering chocolates candies and all these goodies. After a recent analysis of the competitive environment, Mark concluded that three distinct consumer segments exist for his products A,B,and C consumers. In an effort to maximize the effectiveness of its strategy, mark has decided to focus on fulfilling the needs of A consumers. He is employ a ______ strategy
Which action is a cause for erosion of all small firms focus strategy:
the focus strategy is imitated
an entrepreneur would choose a franchise over an independent startup most likely because of the:
probability of success.
the cost of a franchise may include
a one time federal franchise tax
an entity or individual granted the right to conduct business according to specified methods and terms of another party is known as
A legal agreement between two parties in a franchise arrangement is referred to as a
franchise contract
an entity or individual that grants another party the right to conduct business according to specified methods and terms is known as a
the rights conveyed by a franchising agreement are referred to as
the franchise
products and trade name franchising is best illustrated by the system offered by
exom mobil
business format franchising is best illustrated by the system offered by
A subway franchise located inside a subway is called_______ franchising
in what way is a franchisee’s control over the business greatly reduced?
the franchisee is bound by the terms the franchise contracts.
the disclosure statement provided to a prospective franchisee must contain all correct information except:
strategic plans for future
one of the most important features of the franchise contracts is the provision related to
termination and transfer of the franchise
steve, harry and chris who own and run a family auto parts stor are having bad times during a downturn in the local economy to help the store stay alive they agree to each take 25% reduction in salary for a year this is an example of
an important advantage of a family business
A founders core values may become part of the family business culture because:
others in the firm absorb traditions and values established by the founder
Patricia a non family employee of a family business is concerned with competing family members for future career opportunities. to protect her interests she should
ask that the owner clarify the extent of opportunities considering her skill sets.
what are 3 basic objectives of a business plan
identify the nature and the content of the business
to outline the approach the entrepreneur plans to use to do well
to recognize factors that will determine whether or not the venture will be successful
prospective investors have one goal what is it.
to maximize potential return on an investment through cash flows that will be received while minimizing the risk they’re taking
are investors more product or market oriented and why?
market oriented, realizing that most patented inventions never earn a dime for the inventors.
what is a subscription
a customer pays a fixed amount for services.

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definition of small business marketing
business activities that direct the creation development and delivery of a bundle of satisfaction from the creator to the targeted user.
describe the differences between actual core and augmented product
core: simple solution : something to hold money
actual: the actual product: wallet
augmented: supped up product: purse
3 differencing marketing philosophies
product oriented: product of the single most important part of the business
sales oriented: focusing on the purchasing product and achieving sales goals is first priority.
4 elements that make up the marketing mix
product, place, promotion price
(distribution activities)
define market and the 3 elements that it consists of
market: a group of customers who have purchasing power.
1.) customers
2.) purchasing power
3.) unsatisfied needs
2 major segmentation variables:
benefit variables: specific characteristics that distinguish market segments according to the business sought by customers
demographic variables: specific characteristics that describe customers and their purchasing power
advantages of LLC
Liability protection it affords
what types of business must put customer access first
selling to end users of product
retail customer
what is a business incubator
a facility that rents space to new businesses or to people wishing to start businesses
why aren’t firms cash flow equal to its profits
you have to make sure you check the balance sheet. you my have money left in accounts recievable that hasn’t been collected yet.
what is the basic equation for a balance sheet?
total assets= debt + ownership equity
as sales increase what will typically increase
assets requirements
what is a term loan?
set for a couple of year.
car loan between 3-5 years
what is the definition of CRM
customer relationship management. it is a world wide business strategy designed to optimize profitability and customer satisfaction by focusing on specific customer groups.
what are four options available to a customer who is dissatisfied.
publically obtain legal action against business
privately complain to business
stop buying
do nothing
describe the data needed for a customer profile
transaction, customer contacts, descriptive information, responses to marketing stimuli
4 stages in the correct order consumer decision
needs recognition, information, purchase decision, post purchase
two basic influences on consumer behavior.
1.) psychological: needs, perceptions, motivations, attitude
2.) sociological: cultures, social class, reference groups, opinion leaders
what is a sustainable competitive advantage? example.
a value creating position that is like to endure overtime. (KFC- colonels recipe)
difference between brand mark, brand image and brand name:
brand mark- tangible nike swoosh
brand make – tangible Walmart
brand image- intangible: nike athlete just do it.
how does social class influence buying behavior?
peer pressure expectation of society
Holly wood amusement, a small independent movie theater decreased its price for admission from 10 to 9 dollars before the price drop they only sold 1000 tickets a month now they are selling 1500 a month this theater faces _______ demand for its tickets
elastic demand
demand for a product typically:
decreases as prices increases.
what is a product
a total bundle of satisfaction whether it service good or both offered to consumers in an exchange transaction
what is the difference between a trademark and a copyright
trademark: coca cola: red color bottles
copyright: bovies
what is trade dress:
what the employees will always wear and what they must be known for. ex: Target : Red Shirt Khakis
the major objective of a firm in granting credit is
make sakes
Hillary wants to purchase a refrigerator on credit, if she uses an installment plan what will occur
a down payment will be required
a trade credit bill of 80,000 with terms sale of 2/5 net 30 means the buyer saves______ if the buyer paid within the discount period
know the break even equation to solve this with these numbers $3000 a month, 12000 per month for the building
one of the largest expense categories for most businesses is
which source of employees do small business owners say accounts for most of their business are
The American with disabilities act the number to remember is
15 and resonable
new employees benefit most from orientation when it is given
during the first two or three days on the job
small firms give employees a share of ownership in the business through
employee stock ownership plans
which item plays the central role in attracting and motivating employees
the civil rights act applies to any employer of
15 or more people

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