Question 1

Business ________ buy and sell businesses for a fee,in essence serving as a matchmaker.

Accepted Answer

A) Brokers 
B) Agents 
C) Contacts 
D) Managers 
E) Consultants 
A) Brokers 
B) Agents 
C) Contacts 
D) Managers 
E) Consultants A

Question 2

All of the following can help reduce your learning curve except ________.

Accepted Answer

A) Having transferrable skills from prior experience that fit the business 
B) Seeking out employment in the type of company you want to purchase 
C) Volunteer activities 
D) Read books about the industry 
E) All of the above can reduce your learning curve. 
A) Having transferrable skills from prior experience that fit the business 
B) Seeking out employment in the type of company you want to purchase 
C) Volunteer activities 
D) Read books about the industry 
E) All of the above can reduce your learning curve. D

Question 3

Friends and family are not viable sources for leads on existing businesses that might be for sale.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following may not be an undisclosed issue when buying a business?

Accepted Answer

A) The current owner is in poor health. 
B) Dissatisfied customers 
C) Failure to keep up with market trends 
D) Patents are no longer valid. 
E) Equipment is obsolete. 
A) The current owner is in poor health. 
B) Dissatisfied customers 
C) Failure to keep up with market trends 
D) Patents are no longer valid. 
E) Equipment is obsolete.

Question 5

________ is/are a source for leads regarding businesses for sale.

Accepted Answer

A) Your current employer 
B) Customers 
C) Suppliers 
D) Competitors 
E) All of the above 
A) Your current employer 
B) Customers 
C) Suppliers 
D) Competitors 
E) All of the above

Question 6

________ is not a sign of potential problems when practicing due diligence.

Accepted Answer

A) Inconsistent information 
B) Refusal to provide contact names 
C) Hesitancy to open up to questions 
D) Conflicting information 
E) Accurate information 
A) Inconsistent information 
B) Refusal to provide contact names 
C) Hesitancy to open up to questions 
D) Conflicting information 
E) Accurate information

Question 7

Typically,you will have to secure more capital to buy a business than to start one up because you are paying for the ________.

Accepted Answer

A) Established customer base 
B) Supplier relationships 
C) Skilled employees 
D) All of the above 
E) None of the above 
A) Established customer base 
B) Supplier relationships 
C) Skilled employees 
D) All of the above 
E) None of the above

Question 8

It is ________ to buy a going concern for less than it would cost to start a similar company.

Accepted Answer

A) Possible 
B) Impossible 
C) Likely 
D) Improbable 
E) Definite 
A) Possible 
B) Impossible 
C) Likely 
D) Improbable 
E) Definite

Question 9

Although buying a business has many advantages that may translate into market benefits,you will also take over its challenges and problems.

Accepted Answer

A) True 
 B)False

Question 10

Records of information that a buyer should request and review during due diligence include all of the following except ________.

Accepted Answer

A) Tax returns for the previous three to five years 
B) Bank deposit tickets for the past two years 
C) Employee records and turnover history for five years 
D) Supplier lists and references 
E) Personal correspondence 
A) Tax returns for the previous three to five years 
B) Bank deposit tickets for the past two years 
C) Employee records and turnover history for five years 
D) Supplier lists and references 
E) Personal correspondence

Question 11

Decision-making criteria and priorities when searching for an existing business include ________.

Accepted Answer

A) Industry 
B) Geography 
C) Size 
D) Life cycle 
E) All of the above 
A) Industry 
B) Geography 
C) Size 
D) Life cycle 
E) All of the above

Question 12

An overly eager seller,or a price that sounds too good to be true,is never a sign that the opportunity actually is too good to be true.

Accepted Answer

A) True 
 B)False

Question 13

Becoming a successful entrepreneur is a process that can be simplified and accelerated by purchasing an operating business.

Accepted Answer

A) True 
 B)False

Question 14

Two primary risks start-ups face are ________.

Accepted Answer

A) Not finding a sufficient supplier and not being able to operate profitably 
B) Not finding a sufficient market and not being able to operate profitably 
C) Not finding a sufficient market and not being able to do accounting profitably 
D) Not finding sufficient advertising opportunities and not being able to operate profitably 
E) Not finding a sufficient market and not being able to price profitably 
A) Not finding a sufficient supplier and not being able to operate profitably 
B) Not finding a sufficient market and not being able to operate profitably 
C) Not finding a sufficient market and not being able to do accounting profitably 
D) Not finding sufficient advertising opportunities and not being able to operate profitably 
E) Not finding a sufficient market and not being able to price profitably

Question 15

Becoming a successful entrepreneur is a process that can be ________ and ________ by purchasing an operating business.

Accepted Answer

A) Simplified,accelerated 
B) Simplified,stunted 
C) Complicated,accelerated 
D) Convoluted,accelerated 
E) Simplified,enhanced 
A) Simplified,accelerated 
B) Simplified,stunted 
C) Complicated,accelerated 
D) Convoluted,accelerated 
E) Simplified,enhanced

Question 16

Sellers may be hesitant to disclose too much information to potential buyers.

Accepted Answer

A) True 
 B)False

Question 17

The offer price and the maximum amount you are willing to pay should encompass all of the financial factors you have identified.

Accepted Answer

A) True 
 B)False

Question 18

Discuss some of the reasons why buying an existing business would benefit you.

Accepted Answer

Acquiring an existing business can simpl

Question 19

Nonfinancial variables to consider in valuation include ________.

Accepted Answer

A) Market space 
B) Competitive environment 
C) Legal and regulatory status of the firm 
D) Customer goodwill 
E) All of the above 
A) Market space 
B) Competitive environment 
C) Legal and regulatory status of the firm 
D) Customer goodwill 
E) All of the above

Question 20

Buying into a business over time is an option that may permit a current owner to separate from a company over time,receive a stream of payments,and support customer loyalty.

Accepted Answer

A) True 
 B)False

Exam 3: Finding Opportunity in an Existing Business

Business ________ buy and sell businesses for a fee,in essence serving as a matchmaker.

All of the following can help reduce your learning curve except ________.

Friends and family are not viable sources for leads on existing businesses that might be for sale.

Which of the following may not be an undisclosed issue when buying a business?

________ is/are a source for leads regarding businesses for sale.

________ is not a sign of potential problems when practicing due diligence.

Typically,you will have to secure more capital to buy a business than to start one up because you are paying for the ________.

It is ________ to buy a going concern for less than it would cost to start a similar company.

Although buying a business has many advantages that may translate into market benefits,you will also take over its challenges and problems.

Records of information that a buyer should request and review during due diligence include all of the following except ________.

Decision-making criteria and priorities when searching for an existing business include ________.

An overly eager seller,or a price that sounds too good to be true,is never a sign that the opportunity actually is too good to be true.

Becoming a successful entrepreneur is a process that can be simplified and accelerated by purchasing an operating business.

Two primary risks start-ups face are ________.

Becoming a successful entrepreneur is a process that can be ________ and ________ by purchasing an operating business.

Sellers may be hesitant to disclose too much information to potential buyers.

The offer price and the maximum amount you are willing to pay should encompass all of the financial factors you have identified.

Discuss some of the reasons why buying an existing business would benefit you.

Nonfinancial variables to consider in valuation include ________.

Buying into a business over time is an option that may permit a current owner to separate from a company over time,receive a stream of payments,and support customer loyalty.

Entrepreneurs Recognize Opportunities

Franchising

The Business Plan: Road Map to Success

Creating Business From Opportunity

Exploring Your Market

Developing the Right Marketing Mix and Plan

Pricing and Credit Strategies

Integrated Marketing Communications

Marketing Globally

Smart Selling and Effective Customer Service

Understanding and Managing Start-Up, fixed, and Variable Costs

Using Financial Statements to Guide a Business

Cash Flow and Taxes

Financing Strategy: Debt, equity, or Both

Addressing Legal Issues and Managing Risk

Operating for Success

Location, facilities, and Layout

Human Resources and Management

Leadership and Ethical Practices

Franchising, licensing, and Harvesting: Cashing in Your Brand

Filters

Becoming a successful entrepreneur is a process that can be and by purchasing an operating business.