Deck 5: Considering Small Business Entrepreneurship and Franchises

Question 1

Although Tamara currently has just one pet-grooming store, she wants to validate the business model and prove it can be profitable. Once she has done that, her larger plan is to franchise the idea across the country. This relates to which of the following entrepreneurial characteristics?

A) confidence
B) internal drive
C) vision
D) tolerance for uncertainty

Answer 1

C

Question 2

Approximately how many businesses are there in Canada?

A) 960,000
B) 5.32 million
C) 1.17 million
D) 10.85 million

Answer 2

C

Question 3

Which of the following describes an individual's desire to create a new business?

A) the entrepreneurial spirit
B) the desire for ownership
C) self-determination
D) the laissez-faire spirit

Answer 3

A

Question 4

Of all the businesses in Canada, approximately what percentage are considered big businesses, like General Motors or Ford?

A) 9.7%
B) 4.3%
C) 0.3
D) 2.4

Question 5

Internal drive, one of the characteristics of entrepreneurs, relates to which of the following?

A) thinking strategically and creatively and effectively managing the details required to make their vision a reality
B) being comfortable knowing that success isn't guaranteed and failure is common
C) the desire to control one's own destiny, which serves as motivation, and the belief that this control can help them take action to overcome setbacks
D) putting in long hours to make their business dreams come true

Question 6

Small businesses make up what percent of all exporters?

A) 35.5%
B) 75.5%
C) 87.5%
D) 25.0%

Question 7

Small businesses represent what percent of all firms with employees?

A) 50%
B) 75.6%
C) 90.5%
D) 97.9%

Question 8

One of the reasons why Steve Jobs was a successful entrepreneur was his ability to take his ideas and turn them into actual products. His innovative and creative ideas and ability to excite others about the potential of these ideas relate to which of the following entrepreneurial characteristics?

A) energy
B) vision
C) tolerance for uncertainty
D) confidence

Question 9

Susan believes that circumstances pretty much determine her opportunities and whether she'll succeed. Susan lacks which characteristic of a successful entrepreneur?

A) energy
B) internal drive
C) vision
D) tolerance for uncertainty

Question 10

Glenn quit his 9-to-5 job to start his own construction business. Although he typically works 10-12 hours a day to get everything done, he doesn't mind and feels great doing it. This relates to which of the following entrepreneurial characteristics?

A) confidence
B) energy
C) internal drive
D) vision

Question 11

Melinda's floral business has suffered a few setbacks in the last year, but she's convinced she can control her own destiny and make the business successful. This relates to which of the following entrepreneurial characteristics?

A) energy
B) internal drive
C) vision
D) tolerance for uncertainty

Question 12

Who typically manages small businesses?

A) relatives
B) professional managers
C) the people who start and own them
D) the board of directors

Question 13

Which of the following is revealed by studies about entrepreneurship?

A) Canadians are the least entrepreneurial country in the world.
B) Canadians are second in the world in early-stage entrepreneurial activity.
C) Teenagers are more entrepreneurial than adults in Canada.
D) People become entrepreneurs only when there are no other employment options.

Question 14

Entrepreneurs willingly put in long hours making their business dreams come true. This relates to which of the following entrepreneurial characteristics?

A) confidence
B) energy
C) external drive
D) vision

Question 15

Small businesses represent the majority of companies in which of the following industries?

A) auto manufacturing
B) construction
C) airlines
D) utilities

Question 16

An entrepreneur needs the ability to act decisively and be a leader of the business. This relates to which of the following entrepreneurial characteristics?

A) confidence
B) internal drive
C) vision
D) tolerance for uncertainty

Question 17

Eric knows there is no guarantee his new green energy firm will succeed, but he quits his day job to start the new business anyway. This relates to which of the following entrepreneurial characteristics?

A) confidence
B) energy
C) internal drive
D) tolerance for uncertainty

Question 18

Kim Nguyen is a sole proprietor planning to open a home décor boutique selling imports from around the world. Like most small businesses, this new business will likely be managed by which of the following?

A) Kim Nguyen
B) her friends
C) a professional manager
D) her family

Question 19

Brandon's mom always knew he would make a great entrepreneur. Even before he founded his successful construction business, he had several other small businesses. They didn't work for one reason or another, but he learned from each failure and never gave up on his dream of owning his own company. Which of the following characteristics did Brandon's mom see in him?

A) internal drive
B) tolerance for uncertainty
C) confidence
D) energy

Question 20

What was the net employment change generated by small business from 2005 to 2015?

A) 17%
B) 57%
C) 87%
D) 100%

Question 21

Josh lost his job after 20 years as a successful marketing specialist. Because Josh has a strong internal drive, he opened a marketing consulting firm and ended up making more money than he did as an employee. This is an example of which factor contributing to high levels of entrepreneurship?

A) limited funding
B) advances in technology
C) downsizing and outsourcing
D) innovation

Question 22

Ten years ago when Anisa started a small business, it cost $10,000 to design and launch her website-and it didn't even have e-commerce capability. Now, she is able to launch an online store for less than $100 per month. Which factor contributing to entrepreneurship does this exemplify?

A) culture of entrepreneurship
B) advances in technology
C) downsizing and outsourcing
D) patents

Question 23

Government agencies such as the Business Development Bank of Canada provide information, advice, and even funding to Canadian start-ups. This is an example of which factor contributing to high levels of entrepreneurship?

A) culture of entrepreneurship
B) rapid job growth at large companies
C) advances in technology
D) downsizing and outsourcing

Question 24

The number of programs in entrepreneurship that colleges and universities offer has increased dramatically in Canada. This is an example of which factor contributing to high levels of entrepreneurship?

A) downsizing and outsourcing
B) innovation
C) advances in technology
D) culture of entrepreneurship

Question 25

Which of the following describes penicillin, airplanes, and air-conditioning?

A) invented in the nineteenth century
B) created through government-sponsored research
C) created by individual inventors and small companies
D) created by large corporations

Question 26

What is one distinction that defines a small business?

A) it must operate only in one location
B) its revenue must be $1 million or less
C) it has 100 employees or fewer
D) it is not dominant in its field

Question 27

The fact that today small businesses have access to government resources and advice from experts that may have been unavailable 20 years ago is an example of which factor contributing to entrepreneurship?

A) culture of entrepreneurship
B) outsourcing
C) downsizing
D) advances in technology

Question 28

Popular Canadian television shows like Dragons' Den celebrate the entrepreneurial spirit. What does this exemplify?

A) advances in technology
B) innovation
C) a culture of entrepreneurship
D) funding

Question 29

In Canada, it can take just a few days and less than a couple hundred dollars to start a business. What does this exemplify?

A) a culture of entrepreneurship
B) advances in technology
C) innovation
D) a characteristic of entrepreneurs

Question 30

Cecil recently lost his job as a Human Resources recruiter. But he now has a freelance contract to help his former employer recruit employees-and it pays him more than what he earned as an employee at the company. This is an example of which factor contributing to high levels of entrepreneurship?

A) limited funding
B) rapid job growth at large companies
C) advances in technology
D) downsizing and outsourcing

Question 31

The fact that insulin and power steering both originated with individual inventors and small companies is testimony to the power of small businesses as providers of which of the following?

A) employment
B) competition
C) technical innovation
D) quality

Question 32

George goes to a large college in Alberta. He notices that there is always a long line at the hotdog stand and that there are limited healthy options at his school. He has an idea that if he could set up a stand that sold healthy sandwiches and salads he could make a lot of money. He has student loans from the government to help pay for tuition and is not a business major. What is the biggest obstacle that he will face in opening up his stand?

A) lack of business knowledge
B) limited ability to raise capital
C) difficulty in hiring workers
D) developing a business plan

Question 33

Which of the following is true about small businesses?

A) Small businesses can be found in many industries.
B) Small businesses represent about 80% of the firms with employees.
C) Small businesses are found mainly in the hospitality industries.
D) Small businesses have a maximum of 25 employees.

Question 34

Sarah has what she thinks is a great idea for a small business. She has developed a new toy that her baby sister loves playing with. She has $10,000 in savings she can use toward the business. What is the first step she should take in launching her business in Canada?

A) try to get on the television show Dragons' Den
B) go to the Canada Business Network for advice
C) try to find an angel investor
D) take business courses

Question 35

Small businesses represent the majority of companies in which of the following industries?

A) retail trade
B) airlines
C) cable television
D) auto manufacturing

Question 36

Which of the following is one of the three factors contributing to high levels of entrepreneurship in Canada?

A) stagnant technology
B) limited funding
C) rapid job growth at large companies
D) advances in technology

Question 37

Approximately what percentage of private-sector employees work for small businesses?

A) 30%
B) 50%
C) 70%
D) 90%

Question 38

A 17-year-old high school student created an iPhone app that he sold to Yahoo for $30 million. His app, Summly, creates 400-character summaries of news articles sent to your phone. This is an example of which contribution that small businesses make to the economy?

A) technical innovation
B) providing employment
C) providing competition
D) spurring growth

Question 39

Mike's small company produces specialized hardware pieces. Why do his industrial clients prefer to purchase these parts from Mike?

A) large companies do not manufacture small parts
B) they cannot produce such high-quality parts
C) it is cheaper to buy from Mike than to make the parts themselves
D) large companies prefer to have less control over their operations

Question 40

Small businesses contribute what percentage to the GDP of their province?

A) 13%
B) 30%
C) 53%
D) 43%

Question 41

Which of the following groups has been at the forefront of Canada's surge in entrepreneurship?

A) immigrants
B) senior citizens
C) women
D) students

Question 42

Vanessa's business plan provides some initial evidence of market demand for the product she plans to sell. This information is most likely found in which section of her plan?

A) executive summary
B) product description and market analysis
C) marketing plan
D) financial projection

Question 43

A small, regional grocery chain based in western Canada is giving Walmart a run for its money. The chain of 50 stores is able to undercut Walmart on prices by buying directly from suppliers and is gaining market share from Walmart. This small grocery chain is testimony to the power of small businesses as providers of which of the following?

A) competition
B) employment
C) quality
D) technical innovation

Question 44

Often small firms seek to establish a particular niche in the market that closely serves the needs of certain customers. When a number of small businesses operate in this manner, it forces larger businesses to recognize and account for their influence on the market. This is an example of small businesses doing which of the following?

A) providing competition
B) providing technical innovation
C) creating jobs
D) avoiding downsizing

Question 45

Vanessa's business plan contains a breakeven analysis. This information is most likely found in which section of her plan?

A) executive summary
B) marketing plan
C) operations plan
D) financial projection

Question 46

A business plan is a tool that assists with which three basic purposes in a business?

A) planning, management, and communication
B) management, communication, and employment
C) planning, communication, and technology
D) management, communication, and technology

Question 47

The beginning of Vanessa's business plan contains a justification for why the business will succeed. What is this section called?

A) executive summary
B) market analysis
C) marketing plan
D) operations plan

Question 48

Before Tyler was approved to own a State Farm Insurance Agency, he had to submit a business plan that included a section detailing his plans for securing customers and promoting his agency. What is this section of the business plan called?

A) an operations plan
B) an executive summary
C) a marketing plan
D) financial projections

Question 49

In his business plan, Marco gives specifics on his facility requirements, including the square footage needed, types of machinery, and materials needed to produce his product. This information is found in which section of Marco's business plan?

A) marketing plan
B) financial projections
C) executive summary
D) operations plan

Question 50

A business plan can help the owner track, monitor, and evaluate the progress of the business, which makes it useful as which type of tool?

A) communication tool
B) planning tool
C) financial tool
D) management tool

Question 51

Vanessa's business plan contains her strategy for pricing the items in her store. This information is most likely found in which section of her plan?

A) executive summary
B) product description and market analysis
C) marketing plan
D) operations plan

Question 52

Before seeking financial backing for his business, Tyler puts together a document explaining the goals, milestones, and projections for the business. What has Tyler constructed?

A) marketing plan
B) business policy
C) business plan
D) organizational guide

Question 53

In some industries there is little advantage to being big, meaning that large companies often do not serve customers in these industries. This is an example of how small business does which of the following?

A) provides competition
B) provides technical innovation
C) creates jobs
D) meets the needs of society

Question 54

Which of the following is a carefully constructed guide for the person starting a business?

A) business budget
B) marketing plan
C) article of business
D) business plan

Question 55

Vanessa's business plan includes details about facility requirements and her launch schedule. This information is most likely found in which section of her plan?

A) executive summary
B) marketing plan
C) operations plan
D) financial projection

Question 56

Vanessa's business plan outlines her start-up costs and cash flow forecasts. This information is most likely found in which section of her plan?

A) product description and market analysis
B) marketing plan
C) operations plan
D) financial projection

Question 57

Vanessa's business plan provides details about her management team and personnel needs. This information is most likely found in which section of her plan?

A) executive summary
B) marketing plan
C) financial projection
D) operations plan

Question 58

Vanessa's business plan emphasizes why her products are unique and what problem they solve in the market. This information is most likely found in which section of her plan?

A) executive summary
B) product description and market analysis
C) marketing plan
D) financial projection

Question 59

Before securing a loan for her small business, Janine submitted a business plan to the bank. She included a section that detailed sales estimates for the first two years, breakeven analysis, and plans for additional funding. These items were likely found in which section of Janine's business plan?

A) marketing plan
B) financial projections
C) executive summary
D) operations plan

Question 60

Vanessa's business plan discusses her strategy for distributing and promoting her products. This information is most likely found in which section of her plan?

A) executive summary
B) product description and market analysis
C) marketing plan
D) operations plan

Question 61

Ryan is an independent musician looking to finance a new holiday album. He has wide-reaching appeal with his soulful voice and expert guitar playing. He does not want to ask friends and family for money, as they have all given him money for previous albums. Which of the following should Ryan consider?

A) venture capital
B) angel investors
C) bank loan
D) crowdfunding

Question 62

Eric decides to open a small catering business to serve local businesses. Based on this information, what is his most likely source of funding?

A) personal funds, family, and friends
B) bank lending
C) angel investor
D) venture capital

Question 63

After graduating from college, Alyson and Salma started their own photography business. They currently hold photo shoots with clients at outdoor locations or in Salma's basement, where she has a small studio. Their business has grown substantially, and Alyson and Salma are looking to renovate a building in town, which will have two studios. In addition, they would like to hire another photographer. Alyson and Salma would likely seek funding from which of the following?

A) personal funds, friends, and family
B) an angel investor
C) a bank loan
D) venture capitalists

Question 64

Rizwan decides to purchase and operate a Subway restaurant. What is Rizwan's role in this scenario?

A) supplier
B) franchisee
C) licensor
D) franchisor

Question 65

Five friends from college have grown their mobile messaging business into a powerhouse with over 700 million users worldwide. They have received venture capital funding in the past but now need a much larger round of funding to fuel their high growth potential. What is their most likely source of funding?

A) personal funds, family, and friends
B) bank lending
C) angel investor
D) public stock offering

Question 66

Karl is interested in starting his own website design business. He has designed several websites for his friends, his service fraternity, and his sister's dance team. Karl needs some funding in order to advertise his business and purchase a new computer. Which of the following should Karl seek funding from?

A) venture capitalists
B) angel investors
C) friends and family
D) bank loan

Question 67

Lin has successfully launched his wireless speaker business, which is growing quickly. He would like to expand into overseas markets but was told by several banks that this idea was too risky. That may be fine, though, because, in addition to funding Lin would also like technical advice to help grow the business. What type of funding would best fit Lin's situation and needs?

A) bank lending
B) angel investor
C) venture capital
D) public stock offering

Question 68

Sun-Hi would like to purchase an ice cream franchise. Which of the following is an advantage of purchasing the franchise as opposed to establishing a new business?

A) The franchise gives her control over the design of the business.
B) The franchise gives her use of an advertised brand name and marketing support.
C) The franchise gives her control over products offered to customers.
D) The franchise allows her to keep all profits.

Question 69

Piotr owns a successful technology security firm and is seeking venture capital funding to grow his business. Which of the following can be a downside to accepting venture capital funding?

A) giving majority ownership of company to investors
B) pressure on the company to deliver fast growth
C) tax implications on investments
D) a short-term loan repayment period

Question 70

Lina is struggling with the new clothing store she started from scratch. Had she purchased the clothing store franchise she had considered, what would the advantage have been?

A) She would have greater control over which products to offer.
B) She would have greater control over management and operational policies.
C) She would have the use of an advertised brand and marketing support.
D) She would have greater control over the design of her store.

Question 71

Hafiza considered purchasing a restaurant franchise but ultimately decided to create his own start-up from scratch. Which of the following is an advantage of establishing his start-up instead of purchasing the franchise?

A) The start-up allows him to keep all profits.
B) The start-up gives him tested and validated production methods.
C) The start-up provides him proven management systems.
D) Start-ups have higher success rates than franchises.

Question 72

Which of the following describes the role of the franchisee?

A) supplies the required training for the franchised business
B) supplies a known and advertised business name
C) supplies the required materials for the franchised business
D) supplies labour and capital and owns and operates the outlet

Question 73

Emma and Hailey have grown their subscription cosmetics business by 500% each of the last two years. They have the potential to rapidly grow much larger if they could get access to the right funding. They are talking to some firms that specialize in funding high-growth companies. Emma and Hailey realize the funding decisions made by these firms are highly competitive and selective. What type of funding are they pursuing?

A) bank lending
B) venture capital
C) public stock offering
D) angel investor

Question 74

The Martin family owns two Tim Hortons locations in Manitoba. The franchisor has announced that Tim Hortons will begin offering blended shakes in time for the busy summer season. This new menu offering requires franchisees like the Martin family to purchase expensive new equipment in order to make the blended shakes. This is an example of which trade-off of owning a franchise?

A) The franchisor must pay the franchise fee to get started.
B) The franchise agreement dictates every aspect of the business.
C) The franchisee must pay a certain percentage of profits to the franchisor.
D) The franchisor provides marketing materials for the new menu item.

Question 75

What is the most common source of small business financing?

A) bank lending
B) personal funds, family, and friends
C) angel investors
D) venture capital

Question 76

Tim owns a McDonald's franchise that is having some troubles. Where is Tim most likely to go for advice and guidance?

A) the franchisor
B) Better Business Bureau
C) restaurant consultants
D) Chamber of Commerce

Question 77

Which of the following is NOT a Canadian resource that helps entrepreneurs launch a business?

A) Futurpreneur Canada
B) Business Development Bank of Canada
C) Canada Small Business Financing Program
D) QuickStarter

Question 78

Daniella owns a 7-Eleven franchise. What is the primary disadvantage of owning a franchise for Daniella?

A) She gets control over the design of the business.
B) All profits stay within her business.
C) The franchise dictates every aspect of the business.
D) She may not find ways to improve operations.

Question 79

Zhang's taffy manufacturing company has grown slowly but steadily over the past five years. She now would like to expand by purchasing new equipment. What is her most likely source of funding?

A) bank lending
B) joint venture
C) venture capital
D) public stock offering

Question 80

Jean is about to purchase the franchise rights for a fitness facility. What is her key reservation about pursuing a franchise as opposed to opening her own gym from scratch?

A) a franchise gives her too much control over the business
B) Jean must pay a franchise fee to get started, along with a certain percentage of profits
C) a franchise provides her training and management advice
D) a franchise provides her marketing support and materials