Deck 9: The Location Plan

Question 1

A business based in the owner's home does not need to consider local zoning ordinances because owners can do whatever they want with their property.

Answer 1

False

Question 2

The Internet has impacted small businesses using an e-commerce business model by bringing new technology to the management of customer service.

Answer 2

True

Question 3

Canning machines and auto assembly line machinery are examples of special-purpose equipment.

Answer 3

True

Question 4

Purchasing used equipment is acceptable as long its use does not send the wrong message to a customer.

Question 5

For many entrepreneurs, choosing a location for a small business is a one-time decision - made only when the business is first established or purchased.

Question 6

One advantage B₂C businesses have over traditional retailers is that they can quickly change product mixes and prices, as well as the appearance of the online store.

Question 7

While one of the six key factors in determining a good business location may be more important in a given situation, each factor will always have some influence.

Question 8

Manufacturing equipment can be categorised as general-purpose and special-purpose.

Question 9

B₂C start-ups offer two advantages over brick-and-mortar retailing - speed of access and transaction.

Question 10

Customer accessibility is vital in industries in which the cost of shipping the final product is high relative to the product's value.

Question 11

All other factors being equal, retail and services businesses will find little advantage in selecting a location near the centre of the market.

Question 12

A brick-and-mortar store is actually a general term that refers to a retail outlet dealing in building supplies.

Question 13

Sometimes an attorney can insert special clauses into a lease agreement that will allow the lessee to exit the agreement under certain circumstances.

Question 14

The primary factor in determining the location for a saw mill would probably be proximity to the market.

Question 15

E-commerce can provide a benefit to small businesses by compressing the sales cycle and easing cash flow difficulties.

Question 16

If the cost of shipping the finished product is high, the factory should probably be located near a source of raw materials.

Question 17

To maximise sales and profits, a discount shoe store should create an atmosphere similar to higher price point shoe stores as the customers will expect the same atmosphere.

Question 18

Because B₂B success stories generally receive more publicity than B₂C ventures, the potential for B₂C opportunities are overlooked.

Question 19

A home location is still almost always considered a temporary situation until the business grows.

Question 20

Many entrepreneurs recognise the value of talking to local realtors to determine site availability and appropriateness.

Question 21

Which statement is true about location decisions?

A)Franchisers assist entrepreneurs with location decisions.
B)Location decisions have a temporary effect on business operations.
C)Location decisions should be made independently of consumer needs.
D)The location decision is equally critical to all types of businesses.

Question 22

Customer accessibility is the most critical factor in evaluating a specific site for a:

A)clothing manufacturer.
B)drugstore.
C)plumber.
D)software development company.

Question 23

Connie can locate her business in any state regardless of its weather because she sells:

A)air conditioners.
B)outdoor swimming pools.
C)consumer yard irrigation systems.
D)mattresses.

Question 24

Online businesses that begin as a part-time venture enjoy a lower risk of failure.

Question 25

Many entrepreneurs start their online businesses as a part-time venture.

Question 26

Basic considerations that enter into the selection of a location for a manufacturing business normally include:

A)availability of raw materials.
B)customer accessibility.
C)neighbourhood conditions.
D)income taxes.

Question 27

A person who is selling product on eBay is using a B₂C model.

Question 28

The transaction based model is the least complex type of website.

Question 29

The role of a website can range from merely offering content and information to enabling complex business transactions.

Question 30

Arthur's business needs a physical building.Arthur's most important decision will be:

A)where to locate.
B)how much to spend.
C)whether to rent or own.
D)whether to build or purchase an existing structure.

Question 31

It is possible for an entrepreneur to do business over the Internet without either a website or storefront.

Question 32

Barnard is ready to look for a site for his new business.To help him in his search he should:

A)contact a local real estate agent.
B)check property for sale ads in the local newspaper.
C)check into site selection software.
D)check with the local small business development office.

Question 33

Renee plans to open a gift shop in a tourist location.She will rely heavily on walk-in customers to support her business.Renee will need:

A)a point-and-click facility.
B)a bricks-and-clicks facility.
C)a brick-and-mortar facility.
D)a professionally developed website.

Question 34

Zoning ordinances:

A)may limit what type of business can be located on the property.
B)will prevent commercial signs.
C)typically will allow parking of customers but not employees.
D)All of the above statements are true about zoning ordinances.

Question 35

Bettina has found a relatively inexpensive building that is a converted service station.Before she signs the lease, she should ask:

A)How is the location zoned?
B)What happened to previous businesses at that location?
C)What are the real estate taxes on the property?
D)Is street parking allowed?

Question 36

Which statement is true concerning business environment conditions for a new business?

A)State governments will help new business by levying taxes.
B)Determining the zoning is important as it may limit a company's operations.
C)Many states offer location incentives to attract jobs to very stable areas.
D)Finding an area that has a low cost of living means a low standard of living for employees.

Question 37

A content-based website provides only the history of an organisation along with a physical address and phone numbers.

Question 38

Blogs and podcasts are among the emerging options for an online presence.

Question 39

For small service or retail businesses, the top priority in location decisions is:

A)personal preference.
B)resource availability.
C)customer accessibility.
D)environmental conditions.

Question 40

Site-related factors that should be taken into consideration when selecting a manufacturing location include:

A)future advertising costs.
B)access to key suppliers.
C)raw material availability.
D)customer accessibility.

Question 41

Helen is planning to open a high-fashion clothing store for young professional women.Which descriptor is the most important consideration for the fixtures?

A)Economical
B)Elegant
C)Feminine
D)Practical

Question 42

An advantage for choosing a hometown as a location for a new business venture include the fact that:

A)the entrepreneur knows the landmarks around his or her home community.
B)credit can be established more easily.
C)friends and relatives line up new customers.
D)the reduced risk.

Question 43

Annie is starting her photography business and is locating it in her family home.Which aspect is critical in the balance between her business and her family?

A)Making sure family members don't spoil the image of the business when clients arrive.
B)Having a professional studio area that is separate from the family area.
C)Shielding her family from the business taking over the home.
D)All of the above statements are true.

Question 44

Donavan has pre-school children.He might choose to work from home:

A)so he can have more quiet time.
B)so he can spend more time with his family.
C)because he shies away from contact with outsiders.
D)because he has read horror stories about daycare centers.

Question 45

Tracy is looking for a building for her shoe store.A major consideration would be:

A)the building should have a welcoming exterior.
B)the building should be on one level.
C)the building should accommodate the growth she anticipates in the next five years.
D)the building should be located in a shopping mall.

Question 46

A good reason for relocating a typical manufacturing business is to:

A)stabilise income taxes.
B)increase customer traffic.
C)be closer to raw materials.
D)provide free-flow space.

Question 47

Facilities that rent shared space, services and management only to new businesses are called:

A)industrial parks.
B)community development centres.
C)shopping centres.
D)business incubators.

Question 48

Why are petrol stations frequently located at the interchanges of national highways?

A)The site provides easy access to raw materials.
B)The site is easy to find at night.
C)The site provides tax incentives because many are in rural areas.
D)The site provides easy access to both customers and transportation.

Question 49

Daniel is writing the location plan for his business plan.He should be sure to include his requirements for office equipment because:

A)this is the largest expense he will have for his start-up.
B)he does not plan to work from home.
C)it is important to present the proper image to his clients.
D)the cost for this equipment needs to be included in his financial plan.

Question 50

An important advantage an entrepreneur gains by leasing rather than buying a facility is:

A)receipt of an investment tax credit.
B)a decrease in investment risk.
C)a decrease in the amount of promotion required.
D)a customised layout.

Question 51

Daisy is planning a clothing manufacturing company.When selecting the location for her production facility, Daisy will want to consider:

A)ease of access to her customers.
B)ease of access to transportation.
C)availability of suitable labour.
D)ease of access to raw materials.

Question 52

An example of special-purpose equipment for a carbonated beverage company is:

A)a refrigerator that keeps the product at the appropriate temperature.
B)a bottling machine that adjusts pressure for different flavours.
C)an assembly line moving the beverages to the loading dock.
D)a mixer that combines the ingredients in the proper order.

Question 53

David is considering starting his business in his hometown, hoping that:

A)he can get a more favourable tax treatment.
B)he does not have problems with zoning laws.
C)his friends and family will use his service and encourage others to follow suit.
D)his short commute will help reduce costs.

Question 54

Juanita is considering locating her a consulting business in her home.Which consideration is the greatest challenge?

A)The increased time needed to get the business running.
B)Her business image may not be perceived as highly as a brick-and-mortar business.
C)The higher cost she may face for equipment and technology.
D)The decreased time she will have with friend.

Question 55

For many new businesses, the most important reason to lease rather than buy a facility is:

A)avoidance of a large cash outlay.
B)freedom in modifying the building.
C)avoidance of interest payments.
D)avoidance of liability lawsuits.

Question 56

Jenny just completed her residency and is ready to open her medical office.The image her office should convey is:

A)trendy, minimalist, futuristic with bold colours and modern art.
B)old-fashioned, dark, sombre with dark colours and heavy furniture.
C)solid, trustworthy, confident with neutral colours and comfortable furniture.
D)light-hearted and whimsical with pastel colours and playful art.

Question 57

Robert is contemplating building an aluminum smelting plant.The ratio of bauxite, the raw material from which aluminum is extracted, to aluminum is two to one.It takes two tons of bauxite to produce one ton of usable aluminum.Where should Robert locate his smelting plant?

A)Close to his customers.
B)Close to the bauxite mine.
C)Close to transportation.
D)Close to an area with a suitable labour supply.

Question 58

Using special-purpose equipment in the manufacturing process can result in:

A)increased operator errors.
B)higher costs of processing.
C)a rise in accident rates.
D)greater output per machine-hour of operation.

Question 59

Businesses that operate in the home:

A)can increase profits by decreasing costs.
B)require customer traffic.
C)are called family businesses.
D)are less common today than they were 10 years ago.

Question 60

Harry is starting a business where he restores homes built before 1900 and is purchasing used equipment, specifically lathes, planning mills and drill presses.This equipment is would be an example of what type?

A)Special-purpose
B)Product-layout
C)General-purpose
D)Automated

Question 61

The major difference between the information-based model and the content-based model is:

A)the presence of ads in the content-based model.
B)the ability to contact the site developer in the information-based model.
C)the presence of an order-processing feature in the information-based model.
D)the ability for the visitor to post comments on the content-based model.

Question 62

E-commerce refers to:

A)B₂B models of doing business.
B)the facilitation of business by making initial contact by electronic means.
C)the buying and selling of products or services over the Internet.
D)a form of business that involves online trades and auctions.

Question 63

Rachel is starting a daycare at her home in a suburban area.Which professional should she contact first before starting?

A)The city's planning and zoning board to make sure she can have a business in the home.
B)Her finance consultant to determine if she can claim a tax deduction for the business.
C)Her insurance agent to increase the policy for coverage on the equipment and business activities on site.
D)All of the professionals are equally important and should be contacted before she starts the business.

Question 64

Sites such as eBay and Bidstart.com derive most of their revenues from:

A)banner ads.
B)listing fees and commissions on sales.
C)corporate sponsors.
D)investors.

Question 65

Jeff's Website Design and Data Storage deals directly with corporate customers online and builds websites and data storage to specifications after an order is placed.By reducing the business's storage and carrying costs, this example illustrates that B₂B businesses can create:

A)greater efficiency in their operations.
B)greater efficiency in their buying and selling.
C)synergies between buying and selling.
D)market reach through e-commerce.

Question 66

For small businesses, the Internet tends to blur ____ boundaries.

A)industry
B)geographic
C)skill-dependent
D)technological

Question 67

John created Acme Online to allow paper suppliers to compete for manufacturers' orders over the Internet in live auctions.This model would best be described as:

A)B₂B.
B)B₂C.
C)C2B.
D)C₂C.

Question 68

A variation of the content model is sometimes called the ____ model.

A)electronic
B)emerging
C)information
D)transaction

Question 69

Steve started a web-based business offering a mechanism for buying and selling antiques.He has set up his company using the ____ model.

A)transaction-based
B)content-based
C)information-based
D)premium-based

Question 70

The basis of eCRM is a:

A)focus on customisation.
B)conscientious work force.
C)flexible distribution system.
D)consumer-centric data warehouse.

Question 71

ShoeBiz produces shoes that until recently have been available only at the most exclusive stores.ShoeBiz decided to create its own website and sell directly to the consumer.This strategy is known as:

A)intermediation.
B)disintermediation.
C)disinterment.
D)dismantling the distribution chain.

Question 72

Melissa would like to reduce the number of phone calls she gets from customers who want to place orders.Which model would best work for Melissa?

A)The information-based model.
B)The content-based model.
C)The transaction-based model.
D)The customer relationship-based model.

Question 73

Amazon.com represents the classic ____ organisation.

A)B₂B
B)B₂C
C)C₂C
D)Auction site

Question 74

Hilda decided to create an Internet site to complement her bricks-and-mortar store:

A)to allow her customers to preview her products before coming to her store.
B)to attract customers from outside her local area.
C)to keep up with the competition.
D)to reduce her overall expenses.

Question 75

Reliable Construction created a website to post photos of some of their completed projects and display their address and phone number along with a list of the types of projects they can complete.Reliable has used the ___________ model.

A)transaction-based
B)content-based
C)information-based
D)customer-relationship-based

Question 76

Charmaine has never bought anything from an online seller.Many others feel the same way.A frequent reason for their reluctance is:

A)they have had a bad online purchase experience in the past.
B)it is difficult to predict how much time it will take to ship the product.
C)websites are difficult to navigate.
D)they are reluctant to purchase a product without first seeing it.

Question 77

In the B₂B model, the customers are:

A)businesses.
B)other consumers.
C)franchisees.
D)auction participants.

Question 78

Gary uses the family room of his home for his business.The children share his computer for their homework and games.The family room also contains the TV and homework space for the children.The SARS is likely to disallow his deduction for this space because:

A)a separate space must be clearly set aside for the sole use of the business.
B)his business did not generate enough income to qualify as a real business.
C)no deduction is allowed for space in the home used for a business.
D)The SARS designates any home-based business as a hobby and hobby expenses are not deductible.

Question 79

Jason has neither a website nor a storefront.Instead, he lists his products for sale on a site that provides customers with the ability to list products for potential buyers.Jason is using a ______ site.

A)C₂C
B)C2B
C)B₂C
D)B₂B

Question 80

How does electronic commerce benefit small businesses?

A)Small businesses are often more "tech savvy" allowing quicker adoption of innovations.
B)Large businesses may not push the consumer towards the Internet resulting in small businesses being able to gain customers.
C)E-commerce allows small businesses to expand beyond local markets without having to make a large investment.
D)The government has committed significant resources to encourage small businesses to adopt an e-commerce business model.