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07
Student: ___________________________________________________________________________
1. Entrepreneurship involves accepting the risk of starting and running a business.

True False
2. Entrepreneurship is another name for management.
True False
3. Entrepreneurs are less important now than in the past to the Canadian economy.
True False
4. Generation X people are not attracted to starting their own business.
True False
5. While entrepreneurs frequently earn significant profits for themselves, their impact on society is quite
small.
True False
6. Many business started by entrepreneurs have grown into major corporations employing thousands of
workers.
True False
7. Entrepreneurs are motivated by the desire to earn a profit.
True False
8. Entrepreneurs, like gamblers, enjoy taking risks.
True False
9. Most entrepreneurs prefer working for someone else.
True False
10. Most entrepreneurs are more interested in personal achievement than in organizational power.
True False
11. If you have managerial skills and leadership ability, you also possess the personality to be an
entrepreneur.
True False
12. Because of the stress of being in business for yourself, it's important that entrepreneurs have people
around them to help replenish their enthusiasm.
True False
13. Successful entrepreneurs rely on others for direction and support.
True False
14. Successful entrepreneurs accept the risk of failure.
True False
15. Entrepreneurs avoid risk and place a high priority on security.
True False
16. It is important for an entrepreneur to be highly energetic.
True False
17. Potential entrepreneurs would be well advised to ask questions.
True False
18. An entrepreneurial team is a group of experienced managers who share the same skills and abilities.
True False
19. There are over 900,000 self-employed women in Canada as of 2008.
True False
20. Entrepreneurial teams combine the creative marketing and production ideas of a group of experienced
people.
True False
21. Successful entrepreneurial teams struggle to blend creative business skills with production and marketing
skills.
True False
22. It is estimated that 46% of SMEs have some degree of female ownership.
True False
23. Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their
businesses.
True False
24. The most important difference between entrepreneurs and micropreneurs is the focus placed by
micropreneurs on balancing the demands of work and family.
True False
25. The primary concern of micropreneurs is to balance the risk of starting your own business with the desire
to build a powerful organization earning significant profits.
True False
26. Micropreneurs are home-based business owners.
True False
27. Micropreneurs are motivated by a desire to have both a satisfying family life and rewarding work.
True False
28. Advancements in computer technology put home-based businesses at a disadvantage.
True False
29. Many micropreneurs operate home-based businesses in the service industry.
True False
30. Corporate downsizing reduces the opportunities for home-based businesses.
True False
31. Society is much more accepting of home-based entrepreneurs than in the past.
True False
32. Opponents of home-based businesses successfully lobbied Parliament to reduce the tax deductions
available for home offices.
True False
33. Successful micropreneurs require self-discipline to separate work from family responsibilities.
True False
34. The purpose of Industry Canada's SME Research and Statistics web site is to allow researchers to share
data they have collected on small business in Canada.
True False
35. Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating
in residential areas.
True False
36. One advantage enjoyed by home-based businesses is the relative ease in attracting new customers.
True False
37. Small businesses have not significantly participated in web-based online sales.
True False
38. The Internet provides an important opportunity for entrepreneurs.
True False
39. Web-based businesses avoid the risk of failure faced by traditional startup businesses.
True False
40. An intrapreneur is the creative person who starts and manages a nonprofit organization.
True False
41. Creative people working as entrepreneurs within a large organization are called intrapreneurs.
True False
42. Entrepreneurial spirit is unique to a small business environment.
True False
43. Large organizations encourage intrapreneurship as a strategy to improve their profitability through new
products.
True False
44. Business incubators provide assistance to established companies attempting to generate foreign sales.
True False
45. The goal of an incubator is only to ensure that the small business survives the start-up period.
True False
46. There are over 1,400 business incubators in North America.
True False
47. The Canadian government views entrepreneurship as a result of an individual's self-motivation. The
government, therefore, can do very little to encourage an individual to become an entrepreneur.
True False
48. Web-based business is always a fast road to success.
True False
49. The management of a nonprofit organization is much the same as the management of small and large
businesses.
True False
50. To be classified as a small business, a firm must have no more than 100 employees.
True False
51. A small business must be independently owned and operated.
True False
52. Medium-sized businesses have between 50-499 employees.
True False
53. About 86% of Canadian exporters are small businesses.
True False
54. Small businesses employ about 1 million individuals in Canada.
True False
55. Most small businesses are foreign-owned and managed.
True False
56. 98% of businesses in Canada have fewer than 100 employees.
True False
57. Small business employs 48 percent of the total private labour force.
True False
58. Large firms have a greater ability to provide personalized, fast response customer service than do small
business organizations.
True False
59. Big businesses don't serve all the needs of the market.
True False
60. The principles of managing vary according to the size of the business.
True False
61. Small businesses can be found in the service sector.
True False
62. Small businesses often can provide more personalized customer service than bigger rivals.
True False
63. Small businesses are not usually found in the farming sector.
True False
64. Maria has just completed her business degree. Her best job search strategy would be to concentrate on
looking for work with a major corporation.
True False
65. Renee, a manager at a small manufacturing firm, has offered to help manage a local branch of the
YMCA. Unfortunately, Renee will find that the skills acquired managing a small business will not be
useful in managing a nonprofit organization.
True False
66. The most common small business failures occur in businesses that are the easiest to start.
True False
67. Many small businesses list managerial incompetence as one of their biggest causes of failure.
True False
68. About 50% of businesses that enter the marketplace survive for one full year.
True False
69. Bad luck is the most often reported cause for small business failure.
True False
70. The easiest businesses to start also have the least growth potential and the greatest failure rate.
True False
71. Traditionally small business statistics classified the retirement of an owner of a sole proprietorship as a
business failure.
True False
72. Your brother, a family dentist, has opened a new office in your home town. As a business student you
know that this type of business experiences both low failure and growth rates.
True False
73. The best way to learn about small business is to start your own.
True False
74. Individuals desiring to learn about small business operations would be well advised to learn from other
entrepreneurs.
True False
75. Many entrepreneurs got the idea for their own business from their experience of working for others.
True False
76. Since entrepreneurs are starting new businesses, experience gained from working for an established
business isn't particularly helpful.
True False
77. Corporate management has been the training ground for many new entrepreneurs.
True False
78. Offering to manage an established business offers experience to a would-be entrepreneur.
True False
79. There is no better way to learn about small business operations than to work for a small business
owner.
True False
80. Entrepreneurs are well advised to avoid starting businesses in the same market in which they were
previously employed.
True False
81. Carlos hopes to start his own business. He needs to avoid talking to other small business owners about his
plans because they might steal his ideas.
True False
82. Sharaf decided to work for a floral design shop before opening her own shop. She will find that this was a
waste of time as her work is used to make someone else successful.
True False
83. As an employee of a small business, DeMonte has observed the owner's desire to retire. Since DeMonte
would like to buy the business, he needs to determine how much the business is worth. In order to
determine a fair price for the business, DeMonte should add up the market value of all of the firm's
physical assets such as buildings, machinery, equipment, and inventory.
True False
84. The primary concerns of an entrepreneur starting a new business should be planning and financing.
True False
85. Poor management is the cause of the majority of small business failures.
True False
86. A business plan is necessarily a bit vague since it is prepared prior to the beginning of business
operations.
True False
87. A good business plan describes the nature of the proposed business, the target market, the competitive
advantages, and the qualifications of the owner(s).
True False
88. Bankers and investors require entrepreneurs to present a well-conceived business plan.
True False
89. In discussions with bankers, entrepreneurs should be prepared to personally guarantee the loan for their
business.
True False
90. An entrepreneur's personal financial position will have a minor impact on negotiations with bankers for a
small business loan.
True False
91. Getting a business plan into the hands of the right people is nearly as important as getting the right
information in the plan.
True False
92. The personal character of an entrepreneur is irrelevant to bankers when determining the credit worthiness
of a business loan.
True False
93. Since creating a "perfect business plan" is impossible, entrepreneurs should focus on the other tasks
needed to get their firm started.
True False
94. Identifying "poor management" as the cause of a small business failure likely includes poor employee
relations.
True False
95. Identifying "poor management" as the cause of a small business failure likely covers a variety of
problems.
True False
96. An effective business plan analyzes the competition and identifies the resources required to profitably
serve a target market.
True False
97. When writing a business plan, prospective entrepreneurs should remember to omit details regarding their
experience and education since investors are only interested in the proposed business.
True False
98. Aside from personal savings, the only other viable source of financing for an entrepreneur would be funds
available from friends and family.
True False
99. Credit owing to potential suppliers can be a source of financing for a new business.
True False
100.Angel investors are the government agencies that invest money in new companies before they go
public.
True False
101.Venture capitalists provide funds for startup businesses in exchange for part ownership in the new
firm.
True False
102.Provincial and local governments offer financing for a business.
True False
103.Venture capitalists provide funds for small businesses as part of their philanthropy programs.
True False
104.Venture capitalists may ask for a large stake in a new business.
True False
105.As a prospective entrepreneur, Kathryn considered a variety of financing sources. Her discussions with a
venture capitalist revealed that this type of investor expects to receive a significant ownership interest in
her firm.
True False
106.Success in running a business depends on knowing your customers, managing your employees, and
keeping efficient records.
True False
107.In the business world, a market consists of those people who only have a willingness to buy a particular
product.
True False
108.Attracting qualified workers presents a problem for small businesses since they usually offer less money,
fewer benefits, and less room for advancement than larger firms do.
True False
109.As their firms grow and prosper, busy entrepreneurs take pleasure in delegating authority to others.
True False
110.Studies show that seniority is the most important criteria when selecting employees for promotion to
management positions.
True False
111.Compared to employees of large businesses, small business employees are less satisfied with their work
because they see their jobs as less challenging.
True False
112.Hiring family members offers the best answer to the problem of attracting qualified employees.
True False
113.Questions about how much authority to delegate, and to whom, are easier issues for a family-run
businesses since they "can't fire family".
True False
114.Justin feels that his family run business will be more likely to avoid the problems many growing
businesses have with managing employees.
True False
115.Many small business owners report that the most important assistance they needed in starting and
managing their business involved accounting.
True False
116.Commercial loan officers and insurance agents offer expert assistance that can be valuable to small
business owners.
True False
117.Commercial loan officers serve as a resource for small business owners for information regarding risk
management.
True False
118.A business will profit from a presence on the Internet even if they do not sell products or services directly
from the Web.
True False
119.Most small businesses do not think internationally.
True False
120.Large multinational firms dominate the international market, leaving few opportunities for small
businesses.
True False
121.One advantage enjoyed by small businesses in international markets is that overseas buyers enjoy dealing
with individuals rather than large corporate bureaucracies.
True False
122.Most of the world's market lies outside of Canada.
True False
123.Exporting offers small businesses opportunities to reduce their dependence on domestic sales and extend
product lives.
True False
124.Small businesses can provide more personalized service than a large corporation when looking at selling
internationally.
True False
125.The Internet has slowed small businesses' participation in international markets.
True False
126.If a business chooses to create a site on the Internet, they should use the site to sell their product/service
on-line.
True False
127.From a competitive standpoint, small businesses cannot expect to successfully compete with large
corporations in international markets.
True False
128.The only barrier preventing small businesses from exporting is insufficient knowledge of the
opportunities available.
True False
129.An entrepreneur:
A. manages businesses for others.
B. has a controlling interest in the ownership of a corporation.
C. manages businesses that operate in multiple countries.
D. accepts the risk of starting and running a business.
130.Entrepreneurs in Canada have:
A. often created wealth for themselves, but have had a minor impact on the economy as a whole.
B. played a major role in developing the Canadian economy.
C. been successful only when they worked in partnership with the federal government.
D. played an important role, but are less important now in creating jobs and wealth.
131.An examination of the reasons given by people willing to accept the risks of entrepreneurship indicates
that:
A. the desire to earn a profit is the only reason most people have for becoming entrepreneurs.
B. many people become entrepreneurs because they do not enjoy working for someone else.
C. the strongest motivator is the desire to be famous and powerful.
D. contrary to popular opinion, most entrepreneurs are not interested in personal achievement.
132.Kayla recently quit a job with a large corporation to start her own business. While she realizes that her
decision comes with risk, she is excited by the chance to be independent and the challenges of running
her own firm. Kayla is an example of a(n):
A. intrapreneur.
B. entrepreneur.
C. venture capitalist.
D. raconteur.
133.Successful entrepreneurs are self-directed. This means they:
A. look to others for strength and encouragement.
B. are self-financed with no assistance from others.
C. perform all business operations by themselves.
D. are self-disciplined and comfortable being their own boss.
134.Which of the following would not be helpful in explaining why individuals accept the risks of business
ownership?
A. The potential for profit and wealth.
B. The sense of self-satisfaction and independence.
C. The challenge of taking calculated risks.
D. The desire to work fewer hours.
135.All of the following are characteristics of successful entrepreneurs except:
A. self-disciplined.
B. tolerant of uncertainty.
C. willingness and desire to follow others.
D. action-oriented.
136.Self-employed women account for about what percentage of all self-employed persons?
A. 10%.
B. one-quarter.
C. one-third.
D. one-half.
137.A group of experienced people from different areas of a business joined together to develop, produce, and
market a new product is known as a(n):
A. entrepreneurial team.
B. joint venture.
C. self-directed functional team.
D. managerial task force.
138.An entrepreneurial team consists of:
A. managers with similar skills, abilities, and interests.
B. experienced managers from different areas of business.
C. a group of wealthy investors who share a vision for a product.
D representatives from management, labour, and the government who work together to solve a company's
. problems in a creative way.
139.Individuals motivated to start a home-based business allowing them to balance the demands of business
and family are called:
A. entremanures.
B. intrapreneurs.
C. micropreneurs.
D. home workers.
140.Over 75% of home based employer businesses are in:
A. Ontario.
B. the service sector.
C. bankruptcy court.
D. manufacturing.
141.All of the following are reasons given for the growth of home-based businesses except the:
A. desire of micropreneurs to balance work and family.
B. computer technology.
C. improvement in job security for employees of large corporations.
D. favourable shift in social attitudes toward home-based business owners.
142.Web-based businesses:
A. sell a wide variety of items.
B. are highly limited in what they sell.
C. only compete with other small businesses.
D. do not compete with bricks-and-mortar businesses.
143.A creative person working within a corporation to launch new products and generate new profits is
known as a(n):
A. arbitrator.
B. micropreneur.
C. procrastinator.
D. intrapreneur.
144.The goal of an intrapreneur is to:
A. improve quality control in a corporation's production process.
B. develop new products and generate new profits for the corporation.
C. implement cost control policies for existing products.
D. break up an inefficient big firm into a group of smaller, more efficient business organizations.
145.Business incubators are government-funded facilities intended to:
A. provide health care benefits for small business owners and their families.
B. offer startup firms low-cost office space and basic business services.
C. help rebuild the nation's infrastructure.
D. assist foreign investors to identify business opportunities in Canada.
146.Effective entrepreneurial teams require a blend of:
A. creativity, marketing, and production skills.
B. venture financing, tax benefits, and production economies.
C. scientific abilities, capital investment, and marketing skills.
D. risk tolerance, debt financing, and international experience.
147.In an entrepreneurial team, who is responsible for the conception, development, and marketing of
products?
A. These matters are handled by the chief executive officer.
B. These issues are the responsibility of the new product development department.
C. These issues are the responsibility of all the members of the entrepreneurial team.
D. These matters are primarily handled by outside business consultants.
148.Which of the following helps explain the growth of home-based businesses?
A. Many cities regulate the type of businesses permitted in residential neighbourhoods.
B. It is often difficult to separate work and family tasks.
C. Corporate downsizing helped workers see that there is no such thing as job security.
D. Many people enjoy the security of a regular paycheck.
149.Which of the following best describes the difference between an intrapreneur and an entrepreneur?
A. Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses.
B. Intrapreneurs are practical while entrepreneurs are creative.
C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their
own business.
D Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the
. management of all areas of a business.
150.Intrapreneurs make use of ________________ to develop and launch new products and generate new
profits.
A. their employer's existing human, financial, and physical resources
B. their own personal financial resources
C. government supplied physical and financial resources
D. old ideas abandoned by entrepreneurs
151.Ellie is a creative person who works for the Bigdome Corporation, a large producer of consumer
products. One of her primary duties is to initiate and develop new products to complement the firm's
current product line. Evidently Ellie is a(n):
A. intrapreneur.
B. entrepreneur.
C. outside consultant.
D. owner's daughter.
152.Ketan is an intrapreneur for a multinational electronics company. As an intrapreneur Ketan:
A. is expected to recruit new managerial talent for his firm.
B. will use the firm's existing resources to develop new products.
C. is concerned mainly with improving the firm's public image.
D. will concentrate on creating new ventures that can be spun off to become independent firms.
153.Art comes up with new ideas or innovations for his company. He is an example of a(n):
A. intrapreneur
B. entrepreneurial team
C. micropreneur
D. all of the above
154.Rockdale College has received a government grant to establish a business incubator. This facility will
offer:
A. local government agencies assistance in obtaining funds for urban renewal.
B. area businesses advice on health care benefits for their employees.
C. venture capitalists an opportunity to identify new entrepreneurs.
D. new businesses low-cost office space with basic business services.
155.The management of charities, government agencies, and schools is ________ the management of a
business.
A. much different than
B. much the same as
C. less well defined than
D. better organized than
156.All of the following are elements of a small business definition except that these firms:
A. have fewer than 100 stockholders.
B. are independently owned.
C. are not dominant in its field.
D. have annual receipts of less than a specified amount.
157.About ____ percent of businesses in Canada have fewer than 100 employees.
A. 10
B. 26
C. 40
D. 98
158.Most Canadians find their jobs in:
A. government agencies.
B. large corporations.
C. the manufacturing sector.
D. small businesses.
159.When comparing small businesses to their larger competitors, it is clear that:
A. bigger is always better.
B. small firms can always outperform big firms on a level playing field.
C. small firms often can offer more personalized customer services than big firms.
D. small firms are slower to respond to opportunities than are large firms.
160.Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider
starting a business in:
A. the manufacturing sector.
B. the food service industry.
C. a low risk industry.
D. the agriculture sector.
161.As his college graduation nears, Manny has focused his attention on finding full time employment in the
export business. He has decided to narrow his job search to jobs with a major corporation employing over
100 people. His job search strategy:
A. makes sense because managerial skills are best developed by working for big firms.
B. is smart because major corporations represent the most important source of employment growth in
Canada.
C. indicates that Manny's passion is to fulfill his dream of owning his own business.
D. will likely limit his job prospects since most Canadian exporters are small businesses.
162.After working as a manager of a small business for several years, Connie has been offered a management
position with a local charity. If she accepts the job offer, she is likely to find that:
A. her previous experience will be of little value in her new position.
B. the principles of management are much the same regardless of the type of organization.
C. nonprofit organizations are motivated by their desire to help people and so financial management is of
little concern.
D. planning is less important to a nonprofit organization.
163.After considering several opportunities, Gene chose to put his entrepreneurial talents to work by starting a
new manufacturing firm. This decision shows that Gene is:
A. more interested in earning high profits than achieving security.
B. motivated by his desire to quickly begin operations with a minimum amount of effort.
C. not a self-motivated individual.
D. afraid to get into a risky type of business.
164.Surveys show that ___________ make(s) the most money among small-business owners in Canada.
A. service businesses
B. retail businesses
C. wholesalers
D. manufacturing
165.Within the small business sector, there is some debate about what in terms of small-business success and
failure?
A. how many new small businesses fail each year
B. how to make a profit
C. the skills needed to be an entrepreneur
D. the role of government
166.When comparing various types of small businesses, the firms that are easiest to start tend to be those
that:
A. offer the greatest security.
B. have the greatest prospect of long-term growth.
C. have the highest failure rates.
D. involve professional services, such as dentistry or veterinary medicine.
167.A review of small business successes and failures indicates that the:
A. businesses that are easiest to start offer the greatest potential for long term growth and profits.
B. restaurant industry offers the least risk for entrepreneurs.
C. businesses with the potential of high profit levels tend to be difficult to start and hard to keep going.
D reason the service sector is rapidly growing is that these firms are easy to start and keep going, and
. offer high levels of security and growth potential.
168.Dr. Smiley White just graduated from dental school. He is hoping to acquire the necessary funding to
start his own dentist's office. One advantage of this type of business is the:
A. above average opportunity to borrow funds at a high interest rate.
B. nearly unlimited growth potential.
C. low failure rate.
D. very low startup costs.
169.A Small Business Management course at a community college may offer entrepreneurs an opportunity
to:
A. meet with experienced entrepreneurs with diverse backgrounds and learn from their advice.
B. try out ideas on a computer simulation before risking real time and money.
C. listen to a qualified instructor solve all of the problems of small business owners.
D. do a research paper on a topic of interest.
170.For prospective entrepreneurs, enrolling in an Introduction to Business or Small Business Management
course offered through their community college:
A. is likely to be wasted time since college courses tend to be too theoretical.
B. can be helpful by offering them an opportunity to meet experienced small business owners.
C. would be most helpful after starting their business venture.
D. would offer training equivalent to two years of on-the-job experience.
171.Which of the following would an experienced business owner offer to help someone who is thinking
about starting a business venture?
A. Avoid the temptation of buying an existing firm. Build your own reputation and make your mistakes.
B. Gain experience by working for a successful businessperson.
C. Postpone consulting with an accountant or lawyer until you can afford their services.
D. Jump in quickly, before the market conditions change and opportunities are lost.
172.Seeking the advice of established small business owners is:
A. generally not a good idea since they desire to limit their competition.
B. often valuable since you can from learn from their experiences.
C. not recommended since federal privacy laws could be violated.
D. only helpful if the person giving the advice has been successful.
173.Conversations with small business owners before you start your own business are:
A. not a good idea since every small business person is different.
B. a good idea since you can learn from their experiences.
C. risky since other entrepreneurs may be tempted to steal your ideas.
D. a possible violation of fair trade laws.
174.Motivated by his desire to operate his own business, Caleb is considering the purchase of an existing
business. As he carefully weights this option, he is likely to find that:
A. very few owners of small businesses have any interest in selling.
B. his potential for success would greatly improve if he started his own new firm.
C. the value of an existing business is determined by what the business owns, what it earns, and what
makes it unique.
D. any entrepreneur willing to sell their business is experiencing serious financial problems.
175.As a prospective entrepreneur, Gregory benefited from his experience working for an established florist.
He now feels that he is ready to start his own shop, but he lacks the necessary capital. Which of the
following would best help Gregory achieve his goal of business ownership?
A. Offer to take over management of the business, allowing the owner to enjoy some leisure time.
B. Consider working for a major corporation, live modestly and save until he has sufficient funds to start
his business.
C. Enroll in the closest university and apply for student loans.
D. Open his business and trust that his work experience will bring him success even with insufficient
capital.
176.Sally Wright has just taken early retirement, including a substantial retirement allowance. She wishes
to continue working and wants to invest her retirement allowance in her own small business, and feels
comfortable doing so with an established product and process. She worked for the same employer in
the same job all of her working career and therefore has no experience in running her own business. In
starting her own business she would be well-advised to:
A. start the business from scratch.
B. buy an existing business.
C. buy a franchise.
D. work for someone in an existing small business for the next 10 years.
177.________ are the primary concerns of someone starting a business.
A. Human relations and accounting
B. Financing and planning
C. Marketing and public relations
D. Staffing and controlling
178.Although all the functions of business in a small-business setting are important, which of the following
are the primary concerns when you start your own business?
A. planning and financing
B. financing and knowing your customers
C. planning and accounting
D. planning and managing your employees
179.A good business plan will:
A. focus on the big picture and omit the small details of operating the business.
B describe all aspects of the business, including product, the target market, the nature of the competition,
. and the resources and qualifications of the owner(s).
C. be purposefully vague, since specifics can restrict creativity and flexibility.
D focus on the nature of the business and the target market, omitting personal information about the
. owner in order to avoid personality issues.
180.When preparing the executive summary section of a business plan, it is important to remember:
A. that computer software programs provide the information needed to complete this section.
B. that the goal is to capture the attention of bankers and other investors who receive many business plans
every day.
C. to list all the qualifications, experience, and education of the entrepreneur.
D. that a perfect business plan starts in this section.
181.The business plan of a new entrepreneur should include all of the following except:
A. target market.
B. capital required.
C. competitive advantages.
D. name of the company.
182.A detailed written statement that describes the nature of the business, the target market, the firm's
competitive advantages, as well as the resources and qualifications of the owner(s) is a(n):
A. business plan.
B. entrepreneurial mission statement.
C. profit and loss statement.
D. professional action plan.
183.Entrepreneurs seeking financial support from bankers and potential investors should:
A. be vague regarding their creative business plans to avoid having their idea stolen.
B. seek their assistance in developing their business plan.
C. create a detailed business plan to help the bankers and investors understand why this business will
succeed.
D ask for a relatively small amount of capital initially, postponing a full funding request until the
. investors better understand the business concept.
184.All of the following are important to creditors as they consider making a small-business loan except:
A. the character of the small-business owner.
B. the business plan.
C. financial statements prepared by an accountant.
D. the number of elderly in the community.
185.Neal, a licensed real estate broker, received notification that his application for a business loan was
denied. The bank refused his request because he failed to provide a blueprint identifying the intended
target market and competitive strategy. In order to secure a bank loan Neal evidently needs a:
A. bankruptcy lawyer.
B. business plan.
D. loan advocate.
186.Lamont wants to improve his chances to be a successful entrepreneur and so he has written a business
plan. One advantage of developing this plan is that it:
A. meets federal reporting requirements of Revenue Canada.
B. ensures financing will be available from the venture capitalists.
C. forces Lamont to think carefully about all aspects of his planned business.
D. will enable him to switch from a sole proprietorship to a corporation without any further paperwork.
187.As a(n) ________ Rick searches for firms in need of funding to achieve their goals. In return for his
investment, Rick becomes a part owner in the business. Rick operates as a(n):
A. investment analyst.
B. venture capitalist.
C. corporate raider.
D. securities trader.
188.Chris is an angel investor. This indicates that she:
A. invests her own money in new businesses before they sell stock publicly.
B. creates business incubators for startup Web-based firms.
C. is involved in providing startup money for new churches and other nonprofits.
D. provides assistance for struggling entrepreneurs.
189.The largest source of capital for entrepreneurs is usually from
A. venture capitalists.
B. loansharks.
C. provincial and municipal governments.
D. personal savings.
190.________ are private individuals who invest their own money in potentially hot new companies before
these firms sell stock publicly.
A. Leveraged buyout specialists
B. Angel investors
C. Venture investors
D. Corporate raider investors
191.A firm or individual providing financial capital to small businesses in exchange for an ownership stake in
the company is called a:
A. corporate raider.
B. takeover specialist.
C. financial capitalist.
D. venture capitalist.
192.A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product
or service.
A. market
B. consumer co-operative
C. consumer collective
D. buyer's co-operative
193.To be considered part of a market, an individual must:
A. be a registered buyer.
B. have made a purchase within the last 30 days.
C. know the names and addresses of two or more sellers.
D. have both a willingness to buy and the financial resources needed to buy.
194.Holiday Shores is an expensive, five-star restaurant with an outstanding reputation. Although located
about two miles from a high school, the restaurant does not view the students as part of their market. The
restaurant's view is likely correct because:
A. the school is more than a mile from the restaurant.
B. the school cafeteria provides all of the food the students require.
C. food is a low priority item for most students.
D. most high school students can't afford to eat at expensive restaurants.
195.Kathy, like many others in her extended family, works in the furniture store started by her grandfather. As
the business has expanded, she has been frustrated because:
A. suppliers are reluctant to do business with a family-run business.
B. of the accounting rules that apply to family businesses.
C. profit margins have increased on household furnishings.
D. you can't fire family.
196.As a small business owner, Tanika can't afford to provide her employees with the high wages and benefits
offered by big corporations. One way to retain her employees and create a high level of motivation would
be to:
A. threaten to fire her existing employees and hire new workers.
B. adopt a policy of promoting the workers who have been employed the longest.
C. empower her employees to develop their own ideas.
D. hire only family members, since they are more loyal.
197.Which of the following would not be among the disadvantages of working for a small business?
A. Pay.
B. Benefits.
C. Job satisfaction.
D. Room for advancement.
198.Small business owners often struggle in attracting qualified workers. Which of the following does not
contribute to this problem? Small firms offer:
A. less attractive fringe benefits than offered by larger firms.
B. lower wages than paid by large corporations.
C. limited room for advancement.
D. a lack of challenging jobs.
199.Employees of small businesses often have greater job satisfaction than do employees of larger firms. One
reason for this difference in job satisfaction is that employees of small businesses often:
A. earn higher wages.
B. receive more vacation time.
C. get more respect from their bosses.
D. have more job security and better fringe benefits.
200.A(n) ____________ is a valuable source of information regarding techniques to reduce a firm's exposure
to risk.
A. insurance agent
B. accountant
C. liability assessor
D. union business agent
201.Small business employees:
A. usually dislike their jobs and look forward to finding employment with major corporations.
B. don't find their jobs as challenging as in large corporations.
C. are usually paid higher wages than workers in large corporations.
D. are often more satisfied with their jobs than are their counterparts in big business.
202.Entrepreneurs often discover that there are many legal and financial issues involved in starting their
business. The best way for the small business owner to resolve these issues and protect the firm's
resources is:
A. for the owner(s) to trust their common sense.
B. to hire a full time lawyer and accountant immediately.
C. defer making decisions regarding these issues until the company is bigger.
D. seek expert guidance and assistance.
203.All of the following are hurdles small businesses face when considering exporting except:
A. financing is often difficult to find.
B. overseas buyers prefer dealing with large corporate bureaucracies.
C. there is great deal of required paperwork.
D. cultural differences are not easily understood.
204.One reason why many Canadian small businesses are not involved in exporting is:
A. there is a limited market for their products.
B. the government's new homeland security programs limit opportunities for small businesses.
C. many of these firms do not know how to get started.
D. Canadian products are perceived as inferior.
205.Which of the following best describes the opportunities available to small businesses in international
markets?
A. The world market is a much larger, and potentially more lucrative, market than the Canadian domestic
market.
B. The threat of terrorist activities prevents small businesses from competing internationally.
C. Most foreign buyers prefer to deal with large, well-known corporations rather than small businesses.
D. Higher business costs eliminate the profit opportunities in global markets.
206.Today, small business ventures are far more capable of expanding globally, with relatively minimal effort
and cost because of:
A. the increased level of general business knowledge.
B. the support received from government agencies.
C. the many options that exist for how a small business can enter a global market.
D. web-based business applications.
207.Small businesses often have advantages in international markets. All of the following are advantages
many small businesses can offer except:
A. a greater expertise in managing the paperwork required to sell goods in international markets.
B. the ability to ship goods more quickly.
C. individualized customer service as opposed to impersonal corporate bureaucracies.
D. the ability to provide a wide variety of suppliers.
208.Luis is a partner in a firm that specializes in producing vitamins and health food products. While the
business is considered small by Canadian standards, he is attempting to persuade his partner to expand
internationally. Luis would list all of the following as advantages of going international except:
A. exporting can help sell excess inventory.
B. marketing programs benefit from the cultural similarities in prospective markets.
C. expanding internationally can reduce a firm's dependence on their domestic market.
D. selling products in other markets can extend their life cycle.
209.Anthony, a small business owner, is considering marketing his product in Brazil. If he enters the Brazilian
market, he is likely to face all of the following problems except:
A. the cultural differences between Canada and Brazil.
B. difficulties in obtaining adequate financing.
C. convincing foreign firms to do business with a small firm, rather than a large corporation.
D. the heavy burden of bureaucratic paperwork.
210.One of the reasons people are willing to take the challenge of starting their own business is for
independence. Give some examples why.
211.Not everyone dreams of owning their own business. Identify and describe at least three attributes of
successful entrepreneurs.
212.What is an entrepreneurial team? What benefits does a team offer compared to an individual
entrepreneur?
213.Working at home has its challenges. In setting up a home-based business, what kinds of major challenges
could you expect?
214.Give an idea for a potentially successful home-based business. What important criteria should the
business meet?
215.Entrepreneurs and new start-up companies can find assistance from incubators. According to the
Canadian Association of Business Incubators, incubators today provide what kinds of services?
216.How important is small business to the Canadian economy?
217.What kinds of Canadian small businesses require advanced training to start, but have the lowest failure
rates?
218.An excellent way to learn how to run a small business is to talk to entrepreneurs from diverse
backgrounds. What kind of advice will they give you?
219.Name three potential sources of capital for small and medium-sized enterprises.
220.Once you have identified your market and its needs, how can you set out to fill those needs?
221.Small-business owners need outside consulting advice early in the process. Name two invaluable
experts.
222.What advantages do small businesses have over large businesses in international trade?
223.Many small businesses in Canada avoid trading internationally because they don't know how to get
started. What are some of the other primary reasons?
224.Discuss the benefits exporting offers to small businesses. Given these benefits, why don't more small
firms sell in international markets?
07 Key
1. Entrepreneurship involves accepting the risk of starting and running a business.
(p. 200) TRUE
Difficulty: 1
Learning Objective: 07-01 Explain why people are willing to become entrepreneurs; and describe the attributes of successful entrepreneurs.
Nickels - Chapter 07 #1
2. Entrepreneurship is another name for management.
(p. 200) FALSE
Difficulty: 1
3. Entrepreneurs are less important now than in the past to the Canadian economy.
(p. 200) FALSE
Difficulty: 1
4. Generation X people are not attracted to starting their own business.
(p. 200) FALSE
Difficulty: 1
5. While entrepreneurs frequently earn significant profits for themselves, their impact on society is quite
(p. 200) small.
FALSE
Difficulty: 1
6. Many business started by entrepreneurs have grown into major corporations employing thousands of
(p. 200, workers.
201)
TRUE
Difficulty: 1
7. Entrepreneurs are motivated by the desire to earn a profit.
(p. 203) TRUE
Difficulty: 1
8. Entrepreneurs, like gamblers, enjoy taking risks.
(p. 204) FALSE
Difficulty: 1
9. Most entrepreneurs prefer working for someone else.
(p. 204) FALSE
Difficulty: 1
10. Most entrepreneurs are more interested in personal achievement than in organizational power.
(p. 204) TRUE
Difficulty: 1
11. If you have managerial skills and leadership ability, you also possess the personality to be an
(p. 203) entrepreneur.
FALSE
Difficulty: 1
12. Because of the stress of being in business for yourself, it's important that entrepreneurs have people
(p. 204) around them to help replenish their enthusiasm.
FALSE
Difficulty: 1
13. Successful entrepreneurs rely on others for direction and support.
(p. 204) FALSE
Difficulty: 1
14. Successful entrepreneurs accept the risk of failure.
(p. 204) TRUE
Difficulty: 1
15. Entrepreneurs avoid risk and place a high priority on security.
(p. 204) FALSE
Difficulty: 1
16. It is important for an entrepreneur to be highly energetic.
(p. 204) TRUE
Difficulty: 1
17. Potential entrepreneurs would be well advised to ask questions.
(p. 204) TRUE
Difficulty: 1
18. An entrepreneurial team is a group of experienced managers who share the same skills and
(p. 207) abilities.
FALSE
Difficulty: 1
19. There are over 900,000 self-employed women in Canada as of 2008.
(p. 205, TRUE
206)
Difficulty: 1
20. Entrepreneurial teams combine the creative marketing and production ideas of a group of experienced
(p. 207) people.
TRUE
Difficulty: 1
21. Successful entrepreneurial teams struggle to blend creative business skills with production and
(p. 207) marketing skills.
FALSE
Difficulty: 1
22. It is estimated that 46% of SMEs have some degree of female ownership.
(p. 206) TRUE
Difficulty: 1
23. Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their
(p. 207) businesses.
FALSE
Difficulty: 1
24. The most important difference between entrepreneurs and micropreneurs is the focus placed by
(p. 207) micropreneurs on balancing the demands of work and family.
TRUE
Difficulty: 1
25. The primary concern of micropreneurs is to balance the risk of starting your own business with the
(p. 207) desire to build a powerful organization earning significant profits.
FALSE
Difficulty: 1
26. Micropreneurs are home-based business owners.
(p. 207) TRUE
Difficulty: 1
27. Micropreneurs are motivated by a desire to have both a satisfying family life and rewarding work.
(p. 207) TRUE
Difficulty: 1
28. Advancements in computer technology put home-based businesses at a disadvantage.
(p. 207) FALSE
Difficulty: 1
29. Many micropreneurs operate home-based businesses in the service industry.
(p. 207) TRUE
Difficulty: 1
30. Corporate downsizing reduces the opportunities for home-based businesses.
(p. 207, FALSE
208)
Difficulty: 1
31. Society is much more accepting of home-based entrepreneurs than in the past.
(p. 208) TRUE
Difficulty: 1
32. Opponents of home-based businesses successfully lobbied Parliament to reduce the tax deductions
(p. 207, available for home offices.
208)
FALSE
Difficulty: 1
33. Successful micropreneurs require self-discipline to separate work from family responsibilities.
(p. 208) TRUE
Difficulty: 1
34. The purpose of Industry Canada's SME Research and Statistics web site is to allow researchers to
(p. 210) share data they have collected on small business in Canada.
TRUE
Difficulty: 1
35. Micropreneurs are exempt from the local ordinances that restrict home-based businesses from
(p. 208) operating in residential areas.
FALSE
Difficulty: 2
36. One advantage enjoyed by home-based businesses is the relative ease in attracting new customers.
(p. 208) FALSE
Difficulty: 2
37. Small businesses have not significantly participated in web-based online sales.
(p. 208) FALSE
Difficulty: 2
38. The Internet provides an important opportunity for entrepreneurs.
(p. 208) TRUE
Difficulty: 1
39. Web-based businesses avoid the risk of failure faced by traditional startup businesses.
(p. 208, FALSE
209)
Difficulty: 2
40. An intrapreneur is the creative person who starts and manages a nonprofit organization.
(p. 210) FALSE
Difficulty: 2
41. Creative people working as entrepreneurs within a large organization are called intrapreneurs.
(p. 210) TRUE
Difficulty: 1
42. Entrepreneurial spirit is unique to a small business environment.
(p. 210) FALSE
Difficulty: 2
43. Large organizations encourage intrapreneurship as a strategy to improve their profitability through
(p. 210) new products.
TRUE
Difficulty: 2
44. Business incubators provide assistance to established companies attempting to generate foreign
(p. 211) sales.
FALSE
Difficulty: 2
45. The goal of an incubator is only to ensure that the small business survives the start-up period.
(p. 211) FALSE
Difficulty: 2
46. There are over 1,400 business incubators in North America.
(p. 211) TRUE
Difficulty: 2
47. The Canadian government views entrepreneurship as a result of an individual's self-motivation. The
(p. 210, government, therefore, can do very little to encourage an individual to become an entrepreneur.
211)
FALSE
Difficulty: 3
48. Web-based business is always a fast road to success.
(p. 210) FALSE
Difficulty: 3
49. The management of a nonprofit organization is much the same as the management of small and large
TRUE
Difficulty: 1
Learning Objective: 07-02 Discuss the importance of small business to the Canadian economy.
50. To be classified as a small business, a firm must have no more than 100 employees.
(p. 212) FALSE
Difficulty: 1
51. A small business must be independently owned and operated.
(p. 212) TRUE
Difficulty: 1
52. Medium-sized businesses have between 50-499 employees.
(p. 212) TRUE
Difficulty: 1
53. About 86% of Canadian exporters are small businesses.
(p. 213) TRUE
Difficulty: 1
54. Small businesses employ about 1 million individuals in Canada.
(p. 213) FALSE
Difficulty: 1
55. Most small businesses are foreign-owned and managed.
(p. 212) FALSE
Difficulty: 1
56. 98% of businesses in Canada have fewer than 100 employees.
(p. 213) TRUE
Difficulty: 1
57. Small business employs 48 percent of the total private labour force.
(p. 213) TRUE
Difficulty: 1
58. Large firms have a greater ability to provide personalized, fast response customer service than do
(p. 213) small business organizations.
FALSE
Difficulty: 1
59. Big businesses don't serve all the needs of the market.
(p. 213) TRUE
Difficulty: 1
60. The principles of managing vary according to the size of the business.
(p. 212) FALSE
Difficulty: 1
61. Small businesses can be found in the service sector.
(p. 214) TRUE
Difficulty: 1
62. Small businesses often can provide more personalized customer service than bigger rivals.
(p. 213) TRUE
Difficulty: 1
63. Small businesses are not usually found in the farming sector.
(p. 214) FALSE
Difficulty: 1
64. Maria has just completed her business degree. Her best job search strategy would be to concentrate on
(p. 212- looking for work with a major corporation.
214)
FALSE
Difficulty: 2
65. Renee, a manager at a small manufacturing firm, has offered to help manage a local branch of the
(p. 212) YMCA. Unfortunately, Renee will find that the skills acquired managing a small business will not be
useful in managing a nonprofit organization.
FALSE
Difficulty: 2
66. The most common small business failures occur in businesses that are the easiest to start.
(p. 215) TRUE
Difficulty: 1
Learning Objective: 07-03 "Summarize the major causes of small-business failure".
67. Many small businesses list managerial incompetence as one of their biggest causes of failure.
(p. 215) TRUE
Difficulty: 1
68. About 50% of businesses that enter the marketplace survive for one full year.
(p. 215) FALSE
Difficulty: 1
69. Bad luck is the most often reported cause for small business failure.
(p. 215) FALSE
Difficulty: 1
70. The easiest businesses to start also have the least growth potential and the greatest failure rate.
(p. 215) TRUE
Difficulty: 1
71. Traditionally small business statistics classified the retirement of an owner of a sole proprietorship as
(p. 214) a business failure.
TRUE
Difficulty: 2
72. Your brother, a family dentist, has opened a new office in your home town. As a business student you
(p. 215) know that this type of business experiences both low failure and growth rates.
TRUE
Difficulty: 3
73. The best way to learn about small business is to start your own.
(p. 216) FALSE
Difficulty: 1
Learning Objective: 07-04 "List ways to learn about how small businesses operate".
74. Individuals desiring to learn about small business operations would be well advised to learn from
(p. 216) other entrepreneurs.
TRUE
Difficulty: 1
75. Many entrepreneurs got the idea for their own business from their experience of working for
(p. 216) others.
TRUE
Difficulty: 1
76. Since entrepreneurs are starting new businesses, experience gained from working for an established
(p. 216, business isn't particularly helpful.
217)
FALSE
Difficulty: 1
77. Corporate management has been the training ground for many new entrepreneurs.
(p. 216, TRUE
217)
Difficulty: 1
78. Offering to manage an established business offers experience to a would-be entrepreneur.
(p. 217) TRUE
Difficulty: 1
79. There is no better way to learn about small business operations than to work for a small business
(p. 216) owner.
TRUE
Difficulty: 2
80. Entrepreneurs are well advised to avoid starting businesses in the same market in which they were
(p. 217) previously employed.
FALSE
Difficulty: 2
81. Carlos hopes to start his own business. He needs to avoid talking to other small business owners about
(p. 216) his plans because they might steal his ideas.
FALSE
Difficulty: 2
82. Sharaf decided to work for a floral design shop before opening her own shop. She will find that this
(p. 216) was a waste of time as her work is used to make someone else successful.
FALSE
Difficulty: 3
83. As an employee of a small business, DeMonte has observed the owner's desire to retire. Since
(p. 218) DeMonte would like to buy the business, he needs to determine how much the business is worth. In
order to determine a fair price for the business, DeMonte should add up the market value of all of the
firm's physical assets such as buildings, machinery, equipment, and inventory.
FALSE
Difficulty: 3
84. The primary concerns of an entrepreneur starting a new business should be planning and
(p. 219) financing.
TRUE
Difficulty: 1
Learning Objective: 07-05 "Analyze what it takes to start and run a small business".
85. Poor management is the cause of the majority of small business failures.
(p. 219) TRUE
Difficulty: 1
86. A business plan is necessarily a bit vague since it is prepared prior to the beginning of business
(p. 219) operations.
FALSE
Difficulty: 1
87. A good business plan describes the nature of the proposed business, the target market, the competitive
(p. 219) advantages, and the qualifications of the owner(s).
TRUE
Difficulty: 1
88. Bankers and investors require entrepreneurs to present a well-conceived business plan.
(p. 220) TRUE
Difficulty: 1
89. In discussions with bankers, entrepreneurs should be prepared to personally guarantee the loan for
(p. 220) their business.
TRUE
Difficulty: 1
90. An entrepreneur's personal financial position will have a minor impact on negotiations with bankers
(p. 220) for a small business loan.
FALSE
Difficulty: 1
91. Getting a business plan into the hands of the right people is nearly as important as getting the right
(p. 220) information in the plan.
TRUE
Difficulty: 1
92. The personal character of an entrepreneur is irrelevant to bankers when determining the credit
(p. 220) worthiness of a business loan.
FALSE
Difficulty: 1
93. Since creating a "perfect business plan" is impossible, entrepreneurs should focus on the other tasks
(p. 220) needed to get their firm started.
FALSE
Difficulty: 1
94. Identifying "poor management" as the cause of a small business failure likely includes poor employee
(p. 219) relations.
TRUE
Difficulty: 1
95. Identifying "poor management" as the cause of a small business failure likely covers a variety of
(p. 219) problems.
TRUE
Difficulty: 1
96. An effective business plan analyzes the competition and identifies the resources required to profitably
(p. 220, serve a
target market.
221,
Figure 7.5) TRUE
Difficulty: 2
97. When writing a business plan, prospective entrepreneurs should remember to omit details regarding
(p. 220) their experience and education since investors are only interested in the proposed business.
FALSE
Difficulty: 2
98. Aside from personal savings, the only other viable source of financing for an entrepreneur would be
(p. 220- funds available from friends and family.
223,
Figure 7.6) FALSE
Difficulty: 1
99. Credit owing to potential suppliers can be a source of financing for a new business.
(p. 222, TRUE
Figure 7.6)
Difficulty: 3
100. Angel investors are the government agencies that invest money in new companies before they go
(p. 220) public.
FALSE
Difficulty: 1
101. Venture capitalists provide funds for startup businesses in exchange for part ownership in the new
(p. 220) firm.
TRUE
Difficulty: 1
102. Provincial and local governments offer financing for a business.
(p. 222, TRUE
Figure
7.6, 223)
Difficulty: 1
103. Venture capitalists provide funds for small businesses as part of their philanthropy programs.
(p. 220) FALSE
Difficulty: 1
104. Venture capitalists may ask for a large stake in a new business.
(p. 220) TRUE
Difficulty: 1
105. As a prospective entrepreneur, Kathryn considered a variety of financing sources. Her discussions
(p. 220) with a venture capitalist revealed that this type of investor expects to receive a significant ownership
interest in her firm.
TRUE
Difficulty: 2
106. Success in running a business depends on knowing your customers, managing your employees, and
(p. 223, keeping efficient records.
224)
TRUE
Difficulty: 1
107. In the business world, a market consists of those people who only have a willingness to buy a
(p. 223) particular product.
FALSE
Difficulty: 1
108. Attracting qualified workers presents a problem for small businesses since they usually offer less
(p. 224) money, fewer benefits, and less room for advancement than larger firms do.
TRUE
Difficulty: 1
109. As their firms grow and prosper, busy entrepreneurs take pleasure in delegating authority to
(p. 224) others.
FALSE
Difficulty: 1
110. Studies show that seniority is the most important criteria when selecting employees for promotion to
(p. 224) management positions.
FALSE
Difficulty: 2
111. Compared to employees of large businesses, small business employees are less satisfied with their
(p. 224) work because they see their jobs as less challenging.
FALSE
Difficulty: 1
112. Hiring family members offers the best answer to the problem of attracting qualified employees.
(p. 224) FALSE
Difficulty: 1
113. Questions about how much authority to delegate, and to whom, are easier issues for a family-run
(p. 224) businesses since they "can't fire family".
FALSE
Difficulty: 1
114. Justin feels that his family run business will be more likely to avoid the problems many growing
(p. 224) businesses have with managing employees.
FALSE
Difficulty: 3
115. Many small business owners report that the most important assistance they needed in starting and
(p. 224) managing their business involved accounting.
TRUE
Difficulty: 1
116. Commercial loan officers and insurance agents offer expert assistance that can be valuable to small
(p. 225) business owners.
TRUE
Difficulty: 1
117. Commercial loan officers serve as a resource for small business owners for information regarding risk
(p. 225) management.
FALSE
Difficulty: 1
118. A business will profit from a presence on the Internet even if they do not sell products or services
(p. 225) directly from the Web.
TRUE
Difficulty: 3
119. Most small businesses do not think internationally.
(p. 225) TRUE
Difficulty: 1
Learning Objective: 07-06 "Outline the advantages and disadvantages that small businesses have in entering global markets".
120. Large multinational firms dominate the international market, leaving few opportunities for small
FALSE
Difficulty: 2
121. One advantage enjoyed by small businesses in international markets is that overseas buyers enjoy
(p. 226) dealing with individuals rather than large corporate bureaucracies.
TRUE
Difficulty: 1
122. Most of the world's market lies outside of Canada.
(p. 225) TRUE
Difficulty: 1
123. Exporting offers small businesses opportunities to reduce their dependence on domestic sales and
(p. 225, extend product lives.
226)
TRUE
Difficulty: 2
124. Small businesses can provide more personalized service than a large corporation when looking at
(p. 226) selling internationally.
TRUE
Difficulty: 2
125. The Internet has slowed small businesses' participation in international markets.
(p. 225, FALSE
226)
Difficulty: 2
126. If a business chooses to create a site on the Internet, they should use the site to sell their product/
(p. 226) service on-line.
FALSE
Difficulty: 2
127. From a competitive standpoint, small businesses cannot expect to successfully compete with large
(p. 225, corporations in international markets.
226)
FALSE
Difficulty: 3
128. The only barrier preventing small businesses from exporting is insufficient knowledge of the
(p. 226) opportunities available.
FALSE
Difficulty: 3
129. An entrepreneur:
(p. 200) A. manages businesses for others.
B. has a controlling interest in the ownership of a corporation.
C. manages businesses that operate in multiple countries.
D. accepts the risk of starting and running a business.
Difficulty: 1
130. Entrepreneurs in Canada have:
(p. 200) A. often created wealth for themselves, but have had a minor impact on the economy as a whole.
B. played a major role in developing the Canadian economy.
C. been successful only when they worked in partnership with the federal government.
D. played an important role, but are less important now in creating jobs and wealth.
Difficulty: 2
131. An examination of the reasons given by people willing to accept the risks of entrepreneurship
(p. 202) indicates that:
A. the desire to earn a profit is the only reason most people have for becoming entrepreneurs.
B. many people become entrepreneurs because they do not enjoy working for someone else.
C. the strongest motivator is the desire to be famous and powerful.
D. contrary to popular opinion, most entrepreneurs are not interested in personal achievement.
Difficulty: 2
132. Kayla recently quit a job with a large corporation to start her own business. While she realizes that her
(p. 202- decision comes with risk, she is excited by the chance to be independent and the challenges of running
204)
her own firm. Kayla is an example of a(n):
A. intrapreneur.
B. entrepreneur.
D. raconteur.
Difficulty: 3
133. Successful entrepreneurs are self-directed. This means they:
(p. 204) A. look to others for strength and encouragement.
B. are self-financed with no assistance from others.
C. perform all business operations by themselves.
D. are self-disciplined and comfortable being their own boss.
Difficulty: 2
134. Which of the following would not be helpful in explaining why individuals accept the risks of
(p. 204) business ownership?
A. The potential for profit and wealth.
B. The sense of self-satisfaction and independence.
C. The challenge of taking calculated risks.
D. The desire to work fewer hours.
Difficulty: 1
135. All of the following are characteristics of successful entrepreneurs except:
(p. 204) A. self-disciplined.
B. tolerant of uncertainty.
C. willingness and desire to follow others.
D. action-oriented.
Difficulty: 1
136. Self-employed women account for about what percentage of all self-employed persons?
(p. 205, A. 10%.
206)
B. one-quarter.
C. one-third.
D. one-half.
Difficulty: 1
137. A group of experienced people from different areas of a business joined together to develop, produce,
(p. 207) and market a new product is known as a(n):
A. entrepreneurial team.
B. joint venture.
C. self-directed functional team.
D. managerial task force.
Difficulty: 1
138. An entrepreneurial team consists of:
(p. 207) A. managers with similar skills, abilities, and interests.
B. experienced managers from different areas of business.
C. a group of wealthy investors who share a vision for a product.
D.representatives from management, labour, and the government who work together to solve a
company's problems in a creative way.
Difficulty: 1
139. Individuals motivated to start a home-based business allowing them to balance the demands of
(p. 207) business and family are called:
A. entremanures.
B. intrapreneurs.
C. micropreneurs.
D. home workers.
Difficulty: 1
140. Over 75% of home based employer businesses are in:
(p. 207) A. Ontario.
B. the service sector.
C. bankruptcy court.
D. manufacturing.
Difficulty: 1
141. All of the following are reasons given for the growth of home-based businesses except the:
(p. 207, A. desire of micropreneurs to balance work and family.
208)
B. computer technology.
C. improvement in job security for employees of large corporations.
D. favourable shift in social attitudes toward home-based business owners.
Difficulty: 1
142. Web-based businesses:
(p. 208) A. sell a wide variety of items.
B. are highly limited in what they sell.
C. only compete with other small businesses.
D. do not compete with bricks-and-mortar businesses.
Difficulty: 1
143. A creative person working within a corporation to launch new products and generate new profits is
(p. 210) known as a(n):
A. arbitrator.
B. micropreneur.
C. procrastinator.
D. intrapreneur.
Difficulty: 1
144. The goal of an intrapreneur is to:
(p. 210) A. improve quality control in a corporation's production process.
B. develop new products and generate new profits for the corporation.
C. implement cost control policies for existing products.
D. break up an inefficient big firm into a group of smaller, more efficient business organizations.
Difficulty: 1
145. Business incubators are government-funded facilities intended to:
(p. 211) A. provide health care benefits for small business owners and their families.
B. offer startup firms low-cost office space and basic business services.
C. help rebuild the nation's infrastructure.
D. assist foreign investors to identify business opportunities in Canada.
Difficulty: 1
146. Effective entrepreneurial teams require a blend of:
(p. 207) A. creativity, marketing, and production skills.
B. venture financing, tax benefits, and production economies.
C. scientific abilities, capital investment, and marketing skills.
D. risk tolerance, debt financing, and international experience.
Difficulty: 2
147. In an entrepreneurial team, who is responsible for the conception, development, and marketing of
(p. 207) products?
A. These matters are handled by the chief executive officer.
B. These issues are the responsibility of the new product development department.
C. These issues are the responsibility of all the members of the entrepreneurial team.
D. These matters are primarily handled by outside business consultants.
Difficulty: 2
148. Which of the following helps explain the growth of home-based businesses?
(p. 207, A. Many cities regulate the type of businesses permitted in residential neighbourhoods.
208)
B. It is often difficult to separate work and family tasks.
C. Corporate downsizing helped workers see that there is no such thing as job security.
D. Many people enjoy the security of a regular paycheck.
Difficulty: 2
149. Which of the following best describes the difference between an intrapreneur and an entrepreneur?
(p. 210)
A. Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses.

B. Intrapreneurs are practical while entrepreneurs are creative.
C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting
their own business.
D Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the
. management of all areas of a business.
Difficulty: 2
150. Intrapreneurs make use of ________________ to develop and launch new products and generate new
(p. 210) profits.
A. their employer's existing human, financial, and physical resources
B. their own personal financial resources
C. government supplied physical and financial resources
D. old ideas abandoned by entrepreneurs
Difficulty: 2
151. Ellie is a creative person who works for the Bigdome Corporation, a large producer of consumer
(p. 210) products. One of her primary duties is to initiate and develop new products to complement the firm's
current product line. Evidently Ellie is a(n):
A. intrapreneur.
B. entrepreneur.
C. outside consultant.
D. owner's daughter.
Difficulty: 3
152. Ketan is an intrapreneur for a multinational electronics company. As an intrapreneur Ketan:
(p. 210) A. is expected to recruit new managerial talent for his firm.
B. will use the firm's existing resources to develop new products.
C. is concerned mainly with improving the firm's public image.
D. will concentrate on creating new ventures that can be spun off to become independent firms.
Difficulty: 4
153. Art comes up with new ideas or innovations for his company. He is an example of a(n):
(p. 210) A. intrapreneur
B. entrepreneurial team
C. micropreneur
D. all of the above
Difficulty: 4
154. Rockdale College has received a government grant to establish a business incubator. This facility will
(p. 211) offer:
A. local government agencies assistance in obtaining funds for urban renewal.
B. area businesses advice on health care benefits for their employees.
C. venture capitalists an opportunity to identify new entrepreneurs.
D. new businesses low-cost office space with basic business services.
Difficulty: 4
155. The management of charities, government agencies, and schools is ________ the management of a
(p. 212) business.
A. much different than
B. much the same as
C. less well defined than
D. better organized than
Difficulty: 1
156. All of the following are elements of a small business definition except that these firms:
(p. 212) A. have fewer than 100 stockholders.
B. are independently owned.
C. are not dominant in its field.
D. have annual receipts of less than a specified amount.
Difficulty: 1
157. About ____ percent of businesses in Canada have fewer than 100 employees.
(p. 213) A. 10
B. 26
C. 40
D. 98
Difficulty: 1
158. Most Canadians find their jobs in:
(p. 213) A. government agencies.
B. large corporations.
C. the manufacturing sector.
D. small businesses.
Difficulty: 1
159. When comparing small businesses to their larger competitors, it is clear that:
(p. 213) A. bigger is always better.
B. small firms can always outperform big firms on a level playing field.
C. small firms often can offer more personalized customer services than big firms.
D. small firms are slower to respond to opportunities than are large firms.
Difficulty: 1
160. Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider
(p. 214) starting a business in:
A. the manufacturing sector.
B. the food service industry.
C. a low risk industry.
D. the agriculture sector.
Difficulty: 2
161. As his college graduation nears, Manny has focused his attention on finding full time employment
(p. 213) in the export business. He has decided to narrow his job search to jobs with a major corporation
employing over 100 people. His job search strategy:
A. makes sense because managerial skills are best developed by working for big firms.
B. is smart because major corporations represent the most important source of employment growth in
Canada.
C. indicates that Manny's passion is to fulfill his dream of owning his own business.
D. will likely limit his job prospects since most Canadian exporters are small businesses.
Difficulty: 3
162. After working as a manager of a small business for several years, Connie has been offered a
(p. 212) management position with a local charity. If she accepts the job offer, she is likely to find that:
A. her previous experience will be of little value in her new position.
B. the principles of management are much the same regardless of the type of organization.
C. nonprofit organizations are motivated by their desire to help people and so financial management is
of little concern.
D. planning is less important to a nonprofit organization.
Difficulty: 3
163. After considering several opportunities, Gene chose to put his entrepreneurial talents to work by
(p. 214) starting a new manufacturing firm. This decision shows that Gene is:
A. more interested in earning high profits than achieving security.
B. motivated by his desire to quickly begin operations with a minimum amount of effort.
C. not a self-motivated individual.
D. afraid to get into a risky type of business.
Difficulty: 3
164. Surveys show that ___________ make(s) the most money among small-business owners in
(p. 214) Canada.
A. service businesses
B. retail businesses
C. wholesalers
D. manufacturing
Difficulty: 4
165. Within the small business sector, there is some debate about what in terms of small-business success
(p. 214) and failure?
A. how many new small businesses fail each year
B. how to make a profit
C. the skills needed to be an entrepreneur
D. the role of government
Difficulty: 1
166. When comparing various types of small businesses, the firms that are easiest to start tend to be those
(p. 215) that:
A. offer the greatest security.
B. have the greatest prospect of long-term growth.
C. have the highest failure rates.
D. involve professional services, such as dentistry or veterinary medicine.
Difficulty: 2
167. A review of small business successes and failures indicates that the:
(p. 215) A. businesses that are easiest to start offer the greatest potential for long term growth and profits.
B. restaurant industry offers the least risk for entrepreneurs.
C. businesses with the potential of high profit levels tend to be difficult to start and hard to keep
going.
D reason the service sector is rapidly growing is that these firms are easy to start and keep going, and
. offer high levels of security and growth potential.
Difficulty: 3
168. Dr. Smiley White just graduated from dental school. He is hoping to acquire the necessary funding to
(p. 215) start his own dentist's office. One advantage of this type of business is the:
A. above average opportunity to borrow funds at a high interest rate.
B. nearly unlimited growth potential.
C. low failure rate.
D. very low startup costs.
Difficulty: 4
169. A Small Business Management course at a community college may offer entrepreneurs an opportunity
(p. 216) to:
A. meet with experienced entrepreneurs with diverse backgrounds and learn from their advice.
B. try out ideas on a computer simulation before risking real time and money.
C. listen to a qualified instructor solve all of the problems of small business owners.
D. do a research paper on a topic of interest.
Difficulty: 1
170. For prospective entrepreneurs, enrolling in an Introduction to Business or Small Business
(p. 216) Management course offered through their community college:
A. is likely to be wasted time since college courses tend to be too theoretical.
B. can be helpful by offering them an opportunity to meet experienced small business owners.
C. would be most helpful after starting their business venture.
D. would offer training equivalent to two years of on-the-job experience.
Difficulty: 2
171. Which of the following would an experienced business owner offer to help someone who is thinking
(p. 216) about starting a business venture?
A. Avoid the temptation of buying an existing firm. Build your own reputation and make your
mistakes.
B. Gain experience by working for a successful businessperson.
C. Postpone consulting with an accountant or lawyer until you can afford their services.
D. Jump in quickly, before the market conditions change and opportunities are lost.
Difficulty: 2
172. Seeking the advice of established small business owners is:
(p. 216) A. generally not a good idea since they desire to limit their competition.
B. often valuable since you can from learn from their experiences.
C. not recommended since federal privacy laws could be violated.
D. only helpful if the person giving the advice has been successful.
Difficulty: 2
173. Conversations with small business owners before you start your own business are:
(p. 216) A. not a good idea since every small business person is different.
B. a good idea since you can learn from their experiences.
C. risky since other entrepreneurs may be tempted to steal your ideas.
D. a possible violation of fair trade laws.
Difficulty: 3
174. Motivated by his desire to operate his own business, Caleb is considering the purchase of an existing
(p. 217, business. As he carefully weights this option, he is likely to find that:
218)
A. very few owners of small businesses have any interest in selling.
B. his potential for success would greatly improve if he started his own new firm.
C. the value of an existing business is determined by what the business owns, what it earns, and what
makes it unique.
D. any entrepreneur willing to sell their business is experiencing serious financial problems.
Difficulty: 3
175. As a prospective entrepreneur, Gregory benefited from his experience working for an established
(p. 217, florist. He now feels that he is ready to start his own shop, but he lacks the necessary capital. Which of
218)
the following would best help Gregory achieve his goal of business ownership?
A. Offer to take over management of the business, allowing the owner to enjoy some leisure time.
B. Consider working for a major corporation, live modestly and save until he has sufficient funds to
start his business.
C. Enroll in the closest university and apply for student loans.
D. Open his business and trust that his work experience will bring him success even with insufficient
capital.
Difficulty: 4
176. Sally Wright has just taken early retirement, including a substantial retirement allowance. She wishes
(p. 218) to continue working and wants to invest her retirement allowance in her own small business, and feels
comfortable doing so with an established product and process. She worked for the same employer in
the same job all of her working career and therefore has no experience in running her own business. In
starting her own business she would be well-advised to:
A. start the business from scratch.
B. buy an existing business.
C. buy a franchise.
D. work for someone in an existing small business for the next 10 years.
Difficulty: 4
177. ________ are the primary concerns of someone starting a business.
(p. 219) A. Human relations and accounting
B. Financing and planning
C. Marketing and public relations
D. Staffing and controlling
Difficulty: 1
178. Although all the functions of business in a small-business setting are important, which of the
(p. 219) following are the primary concerns when you start your own business?
A. planning and financing
B. financing and knowing your customers
C. planning and accounting
D. planning and managing your employees
Difficulty: 4
179. A good business plan will:
(p. 219) A. focus on the big picture and omit the small details of operating the business.
B describe all aspects of the business, including product, the target market, the nature of the
. competition, and the resources and qualifications of the owner(s).
C. be purposefully vague, since specifics can restrict creativity and flexibility.
D focus on the nature of the business and the target market, omitting personal information about the
. owner in order to avoid personality issues.
Difficulty: 2
180. When preparing the executive summary section of a business plan, it is important to remember:
(p. 220) A. that computer software programs provide the information needed to complete this section.
B. that the goal is to capture the attention of bankers and other investors who receive many business
plans every day.
C. to list all the qualifications, experience, and education of the entrepreneur.
D. that a perfect business plan starts in this section.
Difficulty: 2
181. The business plan of a new entrepreneur should include all of the following except:
(p. 219, A. target market.
220)
B. capital required.
C. competitive advantages.
D. name of the company.
Difficulty: 1
182. A detailed written statement that describes the nature of the business, the target market, the firm's
(p. 219) competitive advantages, as well as the resources and qualifications of the owner(s) is a(n):
A. business plan.
B. entrepreneurial mission statement.
C. profit and loss statement.
D. professional action plan.
Difficulty: 1
183. Entrepreneurs seeking financial support from bankers and potential investors should:
(p. 220) A. be vague regarding their creative business plans to avoid having their idea stolen.
B. seek their assistance in developing their business plan.
C. create a detailed business plan to help the bankers and investors understand why this business will
succeed.
D ask for a relatively small amount of capital initially, postponing a full funding request until the
. investors better understand the business concept.
Difficulty: 1
184. All of the following are important to creditors as they consider making a small-business loan
(p. 220) except:
A. the character of the small-business owner.
B. the business plan.
C. financial statements prepared by an accountant.
D. the number of elderly in the community.
Difficulty: 1
185. Neal, a licensed real estate broker, received notification that his application for a business loan was
(p. 220) denied. The bank refused his request because he failed to provide a blueprint identifying the intended
target market and competitive strategy. In order to secure a bank loan Neal evidently needs a:
A. bankruptcy lawyer.
B. business plan.
D. loan advocate.
Difficulty: 3
186. Lamont wants to improve his chances to be a successful entrepreneur and so he has written a business
(p. 219, plan. One advantage of developing this plan is that it:
220)
A. meets federal reporting requirements of Revenue Canada.
B. ensures financing will be available from the venture capitalists.
C. forces Lamont to think carefully about all aspects of his planned business.
D. will enable him to switch from a sole proprietorship to a corporation without any further
paperwork.
Difficulty: 3
187. As a(n) ________ Rick searches for firms in need of funding to achieve their goals. In return for his
(p. 220) investment, Rick becomes a part owner in the business. Rick operates as a(n):
A. investment analyst.
B. venture capitalist.
C. corporate raider.
D. securities trader.
Difficulty: 3
188. Chris is an angel investor. This indicates that she:
(p. 220) A. invests her own money in new businesses before they sell stock publicly.
B. creates business incubators for startup Web-based firms.
C. is involved in providing startup money for new churches and other nonprofits.
D. provides assistance for struggling entrepreneurs.
Difficulty: 3
189. The largest source of capital for entrepreneurs is usually from
(p. 222 A.venture capitalists.
Figure 7.6)
B. loansharks.
C. provincial and municipal governments.
D. personal savings.
Difficulty: 1
190. ________ are private individuals who invest their own money in potentially hot new companies
(p. 220) before these firms sell stock publicly.
A. Leveraged buyout specialists
B. Angel investors
C. Venture investors
D. Corporate raider investors
Difficulty: 1
191. A firm or individual providing financial capital to small businesses in exchange for an ownership
(p. 220) stake in the company is called a:
A. corporate raider.
B. takeover specialist.
C. financial capitalist.
D. venture capitalist.
Difficulty: 1
192. A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a
(p. 223) product or service.
A. market
B. consumer co-operative
C. consumer collective
D. buyer's co-operative
Difficulty: 1
193. To be considered part of a market, an individual must:
(p. 223) A. be a registered buyer.
B. have made a purchase within the last 30 days.
C. know the names and addresses of two or more sellers.
D. have both a willingness to buy and the financial resources needed to buy.
Difficulty: 1
194. Holiday Shores is an expensive, five-star restaurant with an outstanding reputation. Although located
(p. 223) about two miles from a high school, the restaurant does not view the students as part of their market.
The restaurant's view is likely correct because:
A. the school is more than a mile from the restaurant.
B. the school cafeteria provides all of the food the students require.
C. food is a low priority item for most students.
D. most high school students can't afford to eat at expensive restaurants.
Difficulty: 3
195. Kathy, like many others in her extended family, works in the furniture store started by her grandfather.
(p. 224) As the business has expanded, she has been frustrated because:
A. suppliers are reluctant to do business with a family-run business.
B. of the accounting rules that apply to family businesses.
C. profit margins have increased on household furnishings.
D. you can't fire family.
Difficulty: 4
196. As a small business owner, Tanika can't afford to provide her employees with the high wages and
(p. 224) benefits offered by big corporations. One way to retain her employees and create a high level of
motivation would be to:
A. threaten to fire her existing employees and hire new workers.
B. adopt a policy of promoting the workers who have been employed the longest.
C. empower her employees to develop their own ideas.
D. hire only family members, since they are more loyal.
Difficulty: 4
197. Which of the following would not be among the disadvantages of working for a small business?
(p. 224) A. Pay.
B. Benefits.
C. Job satisfaction.
D. Room for advancement.
Difficulty: 1
198. Small business owners often struggle in attracting qualified workers. Which of the following does not
(p. 224) contribute to this problem? Small firms offer:
A. less attractive fringe benefits than offered by larger firms.
B. lower wages than paid by large corporations.
C. limited room for advancement.
D. a lack of challenging jobs.
Difficulty: 1
199. Employees of small businesses often have greater job satisfaction than do employees of larger firms.
(p. 224) One reason for this difference in job satisfaction is that employees of small businesses often:
A. earn higher wages.
B. receive more vacation time.
C. get more respect from their bosses.
D. have more job security and better fringe benefits.
Difficulty: 1
200. A(n) ____________ is a valuable source of information regarding techniques to reduce a firm's
(p. 225) exposure to risk.
A. insurance agent
B. accountant
C. liability assessor
D. union business agent
Difficulty: 1
201. Small business employees:
(p. 224) A. usually dislike their jobs and look forward to finding employment with major corporations.
B. don't find their jobs as challenging as in large corporations.
C. are usually paid higher wages than workers in large corporations.
D. are often more satisfied with their jobs than are their counterparts in big business.
Difficulty: 2
202. Entrepreneurs often discover that there are many legal and financial issues involved in starting their
(p. 225) business. The best way for the small business owner to resolve these issues and protect the firm's
resources is:
A. for the owner(s) to trust their common sense.
B. to hire a full time lawyer and accountant immediately.
C. defer making decisions regarding these issues until the company is bigger.
D. seek expert guidance and assistance.
Difficulty: 2
203. All of the following are hurdles small businesses face when considering exporting except:
(p. 226) A. financing is often difficult to find.
B. overseas buyers prefer dealing with large corporate bureaucracies.
C. there is great deal of required paperwork.
D. cultural differences are not easily understood.
Difficulty: 1
204. One reason why many Canadian small businesses are not involved in exporting is:
(p. 225) A. there is a limited market for their products.
B. the government's new homeland security programs limit opportunities for small businesses.
C. many of these firms do not know how to get started.
D. Canadian products are perceived as inferior.
Difficulty: 1
205. Which of the following best describes the opportunities available to small businesses in international
(p. 225) markets?
A. The world market is a much larger, and potentially more lucrative, market than the Canadian
domestic market.
B. The threat of terrorist activities prevents small businesses from competing internationally.
C. Most foreign buyers prefer to deal with large, well-known corporations rather than small
businesses.
D. Higher business costs eliminate the profit opportunities in global markets.
Difficulty: 2
206. Today, small business ventures are far more capable of expanding globally, with relatively minimal
(p. 225, effort and cost because of:
226)
A. the increased level of general business knowledge.
B. the support received from government agencies.
C. the many options that exist for how a small business can enter a global market.
D. web-based business applications.
Difficulty: 2
207. Small businesses often have advantages in international markets. All of the following are advantages
(p. 226) many small businesses can offer except:
A. a greater expertise in managing the paperwork required to sell goods in international markets.
B. the ability to ship goods more quickly.
C. individualized customer service as opposed to impersonal corporate bureaucracies.
D. the ability to provide a wide variety of suppliers.
Difficulty: 3
208. Luis is a partner in a firm that specializes in producing vitamins and health food products. While the
(p. 225) business is considered small by Canadian standards, he is attempting to persuade his partner to expand
internationally. Luis would list all of the following as advantages of going international except:
A. exporting can help sell excess inventory.
B. marketing programs benefit from the cultural similarities in prospective markets.
C. expanding internationally can reduce a firm's dependence on their domestic market.
D. selling products in other markets can extend their life cycle.
Difficulty: 4
209. Anthony, a small business owner, is considering marketing his product in Brazil. If he enters the
(p. 226) Brazilian market, he is likely to face all of the following problems except:
A. the cultural differences between Canada and Brazil.
B. difficulties in obtaining adequate financing.
C. convincing foreign firms to do business with a small firm, rather than a large corporation.
D. the heavy burden of bureaucratic paperwork.
Difficulty: 4
210. One of the reasons people are willing to take the challenge of starting their own business is for
(p. 202, independence. Give some examples why.
203)
Some employees who have imagination and confidence in themselves find their jobs too restrictive.
Some corporate managers are tired of big-business life. Many people like doing things their own way
without someone standing over them.
Difficulty: 4
211. Not everyone dreams of owning their own business. Identify and describe at least three attributes of
(p. 204) successful entrepreneurs.
While students will likely identify managerial skills and leadership abilities, these are not unique to
entrepreneurs. Entrepreneurs also need to be:
• Self-directed. They should be self-disciplined and comfortable with taking responsibility for success
and failure.
• Action-oriented. Entrepreneurs aren't satisfied with a dream, they want to make the dream a reality.
• Highly energetic. They are willing to work hard to sustain their efforts over long hours.
• Tolerant of uncertainty. Entrepreneurs can accept the risks and uncertainties inherent in running a
business.
Difficulty: 2
212. What is an entrepreneurial team? What benefits does a team offer compared to an individual
(p. 207) entrepreneur?
a. Entrepreneurial teams bring experienced people from different areas of business that join together
to form a managerial team with the skills needed to develop, make, and market a new product. A team
may be better than an individual entrepreneur because it provides a combination of creative skills with
production and marketing skills right from the start.
b. Another benefit is the concept of shared planning and decision making. Everyone works together
to conceive, develop, and market products. This results in better coordination and cooperation among
functions.
Difficulty: 1
213. Working at home has its challenges. In setting up a home-based business, what kinds of major
(p. 208) challenges could you expect?
Getting new customers, managing time, keeping work and family tasks separate, abiding by city
ordinances, and managing risk.
Difficulty: 4
214. Give an idea for a potentially successful home-based business. What important criteria should the
(p. 207, business meet?
209)
Cleaning service, tutoring, web design, personal coaching, etc. Look for a business where (1) the job
is something you enjoy doing, (2) you know enough to do the job well or are willing to spend time
learning, (3) you can identify a market for your product or service.
Difficulty: 4
215. Entrepreneurs and new start-up companies can find assistance from incubators. According to the
(p. 211) Canadian Association of Business Incubators, incubators today provide what kinds of services?
Hands-on management assistance, education, information, technical and vital business support
services, networking resources, financial advice, as well as advice on where to go to seek financial
assistance.
Difficulty: 4
216. How important is small business to the Canadian economy?
(p. 212,
213)
It is very important. Data can be found in Figure 7.2, page 213. In addition:
-98% of businesses in Canada have fewer than 100 employees

-On average, 104,000 new small businesses are created in Canada each year
-Small businesses employ about 5 million people, or about 48% of the total labour force
-Small businesses contribute slightly more than 30% to Canada's GDP
-About 86% of Canadian exporters were small businesses.
Difficulty: 4
217. What kinds of Canadian small businesses require advanced training to start, but have the lowest
(p. 215) failure rates?
Veterinary services, dental practices, medical practices, etc.
Difficulty: 4
218. An excellent way to learn how to run a small business is to talk to entrepreneurs from diverse
(p. 216) backgrounds. What kind of advice will they give you?
They will tell you that location is critical. They will caution you not to be undercapitalized. They will
warn you about the problems of finding and retaining good workers. Most of all, they will tell you to
keep good records and hire a good accountant and lawyer before you start.
Difficulty: 4
219. Name three potential sources of capital for small and medium-sized enterprises.
(p. 222
Figure 7.6)
Supplier credit, personal savings, personal credit cards, retained earnings, business credit cards,
personal lines of credit, leasing, personal loans, etc.
Difficulty: 4
220. Once you have identified your market and its needs, how can you set out to fill those needs?
(p. 223)
The way to meet your customers' needs is to offer top quality at a fair price with great service.
Difficulty: 4
221. Small-business owners need outside consulting advice early in the process. Name two invaluable
(p. 225) experts.
Lawyers, accountants, marketing consultants, commercial loan officers, insurance agents, professors,
the BDC, other small business owners, and other experts in the field.
Difficulty: 4
222. What advantages do small businesses have over large businesses in international trade?
(p. 226)
Overseas buyers enjoy dealing with individuals rather than large corporate bureaucracies. Small
companies can usually ship much faster, provide a wide variety of suppliers, and give more personal
service and undivided attention.
Difficulty: 4
223. Many small businesses in Canada avoid trading internationally because they don't know how to get
(p. 226) started. What are some of the other primary reasons?
Financing, culture, bureaucratic red tape, export regulations.
Difficulty: 4
224. Discuss the benefits exporting offers to small businesses. Given these benefits, why don't more small
(p. 225, firms sell in international markets?
226)
a. The world market is potentially a much larger and more lucrative market for businesses than
Canada. Moreover, selling in the world market can absorb excess inventories, soften downturns in the
Canadian market, and extend product lives. It can also add variety and make managing the business
more interesting (and perhaps more challenging).
b. There are many barriers that discourage small businesses from exporting their products. These
barriers include:
• difficulties in arranging financing

• uncertainties about how to get started in foreign markets
• ignorance of cultural differences
• extensive bureaucratic paperwork that can practically bury a small business.
Difficulty: 2
07 Summary
Category # of Questions
Difficulty: 1 130
Difficulty: 2 46
Difficulty: 3 24
Difficulty: 4 24
Learning Objective: 07- 80
01 Explain why people are willing to become entrepreneurs; and describe the attributes of successful entrepreneurs.
Learning Objective: 07-02 Discuss the importance of small business to the Canadian economy. 28
Learning Objective: 07-03 "Summarize the major causes of small-business failure". 12
Learning Objective: 07-04 "List ways to learn about how small businesses operate". 20
Learning Objective: 07-05 "Analyze what it takes to start and run a small business". 64
Learning Objective: 07-06 "Outline the advantages and disadvantages that small businesses have in entering global markets". 20
Nickels - Chapter 07 224
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the hidden springs which moved him; but strong feeling on
behalf of another was sure to rouse her interest.
"I should like to understand more," she said. "What I heard

was that Lady Lucas' nephew was a confirmed drunkard—
dismissed from the army for hard drinking. Don't mind my
saying it, please: because I was told."
"There's truth in the tale. He has a desperate tendency that

way. It's awfully rough on him. His father died of delirium
tremens; and the bent has come down to Captain Lucas. A
horrible thing to have inherited! Then there was his bringing
up, all through boyhood his father was a victim to drink,
and the boy tempted every way. His mother was a good
woman, but I don't think she counted for much in the
household. Then he was put into the army; and you know
what that means. He couldn't stand against it."
"And then—?"
"He had warning after warning; and it ended in his being

dismissed. That sobered him; and about the same time, his
mother died, making him promise to take a fresh start. Ever
since, for years, he has kept up the struggle . . . I don't
suppose you or I can fancy what it is—the sort of craving
that seizes on him at times. Once in a way, he is overcome;
and then he despairs; yet still he fights on. He never goes
out to dinner—or anywhere, if a bottle of wine might be on
the table; for he daren't trust himself."
"I wonder any one could marry him."
"She had known him all her life. It was a few years after he
left the army—and she knew how determined he was to
conquer. She thought she could help him; and I am sure
she does. He told me himself that in some of his fits of
despair, he never could have got up again, but for her.
There's nobody else. None of his relations will have a word
to say to him—they are such very good people, Jean—"
"You needn't sneer!"
"But it's true! And all her friends have cast her off for
marrying him."
"I really can't think how she could. Was it right?"
"I suppose she thought it was: and she had to settle the
question for herself. It's not a common case, you know—not
like a man mastered by the habit. And the question is now,
when he is so different, ought every one to go on punishing
him for what he was once? I don't say he will never be
overcome again. He may—some day. It's a frightfully hard
battle—nobody knows how hard. But what more can he do
than he is doing? He has kept straight now for over a year;
and I do believe he will conquer in the end. I can't see that
he ought to be treated like pariah by all good people.
Wouldn't real goodness mean doing all one could to help
him? . . . I'm not sneering at religion, Jean!—Only at the
sort of sham goodness that—You know what I mean!"
"If one could help him really—"
"Of course one can. Nobody has any business to ask him to
dinner, if wine is on table. If he knew, he wouldn't go! They
don't have it in their house; and Em—I mean, Miss Lucas—
has never tasted anything stronger than water. There's
nothing for them but that plan: with his tendencies. He
can't be moderate; so he must give up altogether . . . Still,
I do think a few friends might call sometimes, and be kind
to them, and make a little change for the poor girl; and ask
them to afternoon tea. Or even for once, if it wasn't too
desperate a self-denial, manage not to have wine on table."
"If my father is willing, I shall be glad enough to call. When
do they come?"
"Soon. In a week or two. That queer little red house near

the Post-Office belongs to Captain Lucas. He has lost money
lately, so they are glad to live there rent-free."
"What is Miss Lucas like?"
"Oh, rather pretty," with would-be indifference. "You'd never

guess what a dull life hers has been. I say, Mr. Trevelyan is
unconscionably long. We'd better go to meet him. You must
keep clear of the cottages; but I can't leave you alone
here."
Jean yielded after some hesitation, and they had not far to
walk. One turn brought them within view of a figure
lounging on the ground, resting against the smooth bole of
a large beech.
"Father!" exclaimed Jean. "Why, he has fainted!"
Mr. Trevelyan had never in his life been more ashamed of

himself. That he should faint, like any hysterical school-girl,
was too ridiculous.
Cyril privately doubted whether the attack were a genuine

swoon; but he wisely said nothing.
When with much trouble they had brought Mr. Trevelyan

round, the latter refused to be counted an invalid. As for
needing help in the walk down the gorge—Cyril might look
to Jean! And Mr. Trevelyan strode off at his most vigorous
pace. This could not last, however. Cyril's tough young arm
was soon needed, if the Rector wished to get home that
night.
Once safe in his study, Mr. Trevelyan rallied, and laughed at

Cyril's proposal to send for Dr. Ingram.
"Nothing was wrong," he said. "Merely a touch of over-

fatigue. A good night would set him to rights."
He had been to Barclay's cottage, had found him out, and

had met him immediately afterwards.
"A rather disagreeable interview," Mr. Trevelyan admitted.

"The man was abusive. I told him I should follow my
conscience as to calling again, whether or no he wished to
see me."
Jean's adventure was then related; and Cyril ventured to

recommend greater care.
"Jean ought not to go about alone in such places, now she

was a young lady."
Mr. Trevelyan's eyes twinkled, and Jean's quick ears caught

the sound of a faint mutter, not unlike "teaching your
grandmother!" Then he thanked Cyril politely for the hint;
since whatever else Mr. Trevelyan might be, he was always
a gentleman. "Jean must exercise discretion," he said. "I
can't supply a groom to walk in her rear. Barclay probably
meant no harm. He is a sulky bear; but I must do my duty."
"He will consider that he has given you fair warning."
"Of his intention to toss me over the rocks? Two are needed
for that little game. Possibly I might fail to consent.
However, I am much obliged to you for your care of Jean—"
holding out his hand with a grasp which almost made up for
the preceding irony.
"You don't think the best plan would be to leave the man
alone for a while, till he wants you?"
"Least trouble for myself, no doubt. Not most hopeful for

him. His has been a dark story; and he shall have one more
chance—if I can give it to him." Mr. Trevelyan's penetrating
eyes looked into Cyril's, and the stern lips softened
unwontedly to ask, "If Christ were here, would He leave
that poor fellow to go down hopelessly—without an effort to
pull him up?"
"Then you will agree with me!" Cyril exclaimed, and

forthwith, he poured out the story of the Lucases.
"Yes: you are right," Mr. Trevelyan said, at the first break. "I
agree with you. As brother Christians, and brother
Churchmen, we may not 'walk by on the other side.'"
"And you will call?"
"I will do all in my power—and Jean will do all in hers. They

will be in Jem's Parish; and you should go to him. But,"
after a moment's thought, "don't be too ready to condemn
those who take a different view. There may be difficulties
involved, not apparent to you. If I had boys growing up, I
should count it a serious matter to throw them under his
influence. Now I must have half-an-hour's rest, before
getting to work. So good-bye for the present—" once more
holding out his hand.
"Jean, I don't know how it is, but there is something about
your father unlike other people," said Cyril, in the passage.
"He doesn't go in for a lot of religious talk; but when he
does say something, it goes straight to the mark. One can't
help knowing how he feels it! He's so real!"
"I'm glad you understand him," Jean answered.
CHAPTER VI.
"NOT IN MY SET."
"And oh, for ane-and-twenty, Tam!

And hey, sweet ane-and-twenty, Tam!"
R. BURNS.
SYBELLA DEVEREUX, with a dinner-party hanging over her

head, was a sight to see.
Dinner-parties at the Brow were not altogether unusual;

and the servants knew what they were about; and Sybella
was able to afford what she considered necessary, without
reaching the end of her tether; but, none the less, she
always lived through any amount of previous agonies, and
invariably expected everything to go wrong.
Any dinner-party was bad enough; even if it were a
concoction of her own devising, and after her own taste.
Dear Lady Lucas, for example, as the central dish—if in
these days one may talk, even symbolically, of "central
dishes;" and that good Colonel Atherstone and his sister for
side dishes; and the delightful new St. John's curate, Mr.
Byng, whom report wrongfully declared to have been
selected by Sybella herself for Mr. Kennedy; and of course
dear Mr. Kennedy himself, not to mention that less desirable
appendage, his wife—all these and any other members of
the St. John's "set," as Evelyn had once incautiously termed
them, to her husband's displeasure, Sybella was charmed to
entertain. Any amount of previous agonies was worth
enduring for such a consummation.
If, however, dinner-parties weighed upon Sybella's

shoulders, when she had the devising of them, how much
more would they weigh when their management was taken
out of her hands, and when the traditions of her youth were
liable to cruel outrage!
Cyril was not now only of age, but fully aware of the fact,
and of all that it implied. He was his own master; and
Sybella, his quondam guardian, could no longer exert
authority over him; but this, she was slow to realise. His
twenty-first birthday in August had been duly observed; and
Sir Cyril had comported himself towards friends and
neighbours, not only with what Sybella, called his "sweetly
aristocratic" politeness, but also with the air unmistakable
of master of the domain. Which of course he was! Ripley
Brow belonged to Cyril—not to Sybella. Sybella's tenure of
office was at an end; and if she remained at Ripley Brow,
she remained by Cyril's permission. She had no grain of
right to stay otherwise; and since she possessed her own
independent income, sufficient to keep her in comfort,
many doubted whether the permission would be long
accorded. Sybella's worrying ways were pretty well known
in the neighbourhood.
To Sybella herself, the idea had not so much as occurred

that a change might be contemplated by her nephew. If
Cyril were master—and that he meant to be master soon
became evident—Sybella was mistress; and mistress she
intended to remain. Ripley Brow had always been her home,
therefore of course it always would be. No unusual style of
argument, this, with more vigorous intellects than Sybella's.
Nay, for a while, Sybella had not even expected Cyril to

exercise his rights as master. He was so young still; and
she, for eleven years, had had the irresponsible control of
everything; and any sudden alteration was most unlikely.
Legally, she might not be any longer his guardian; but she
was his aunt, and he was her nephew; and Sybella never
believed in young people growing up; and she counted his
moral indebtedness to herself as enormous in amount.
Altogether there was no reason why everything might not
go on exactly the same ad infinitum. A remote possibility
did, no doubt, exist that Cyril might some day in the course
of years desire to marry; but at present, he was too
ridiculously young. Sybella did not intend to allow it.
She was unutterably taken by surprise—"struck on a heap,"

to use a familiar expression—when Cyril one day brought
her a written list of names, and expressed his intention to
have the said people invited to dinner on a certain evening.
Sybella read the names aloud, with intervening ejaculations.
"Lady Lucas, and the Trevelyans! Impossible, Cyril! I never

ask them together. Lady Lucas does not approve of Mr.
Trevelyan's Church views. Mr. James Trevelyan and his
mother! No, I do not see the least need to begin having
them! They are not at all in my set; and Colonel Atherstone
says he is really a most dangerous young man! Evelyn and
Miss Moggridge! That dreadful Miss Moggridge! One never
knows what she will do next. I detest masculine women. Mr.
Cuthbert! No, I don't like Mr. Cuthbert at all. He has such a
sneering way of saying things. Mr. Byng—"
Sybella laid down the paper, and said it would not do. It was
quite out of the question. She was willing to have a dinner-
party, if Cyril liked—though really she was so tired with all
that had to be done—she would have preferred to wait a
few weeks—but at all events, it could not be that dinner-
party. The people would not suit one another at all. It would
be most unpleasant.
"You know, one has to be so very particular who one asks to

meet who," she went on plaintively and ungrammatically.
"Anything of clashing is so extremely disagreeable. And
besides—"
"Well, perhaps they would not quite suit," admitted Cyril.
He sat down, facing Miss Devereux with a perverse smile,

which ought to have warned her of quicksands near.
"I put in Lady Lucas and Mr. Byng solely for your sake, and
if you don't mind we'll leave them out. The rest are all right.
Ten isn't a bad number. Besides, we might get Dr. Ingram
and his daughter, if two more are needed. He's always an
acquisition."
"Dr. Ingram! Cousin of all the Trevelyans! Worse and

worse!"
"They'll pair off well enough," continued the reckless young

baronet, oblivious of the reddening rims round Sybella's
eyes. "What—you would rather keep the list as it is—not
strike out Lady Lucas? You didn't read Admiral Grice's
name?—Look—at the top. He'll take you in, of course; and I
thought you would like that, to escape Mr. Trevelyan. He's a
jolly old fellow, and there's nothing he likes better than
discussing his gout, so you and he will get on famously. I
must undertake Lady Lucas, and if only we stumble on
everybody's relationships, it's smooth sailing for an hour.
The old lady is sure to be serene, retailing her decent from
Japhet. It will be almost a family dinner-party, and the talk
is likely to become general. That's what—Eh?"
Sybella gasped incoherently.
"That's what I want. Aunt, mind you don't put an enormous

block of greens on the table, so that nobody can see
anybody. Just streak things about on the table-cloth
somehow. Evelyn will give you a hint. Then I've bracketed
Mr. Trevelyan with Mrs. Trevelyan, and Cuthbert with
Evelyn. I suppose Jem Trevelyan really ought to have
Evelyn, in virtue of his new dignities; but he is the last
fellow to mind, and I want to see him get a rise out of Miss
Moggridge. It's famous when she flips her bread into little
bits, and whisks her table-napkin off her knees, in defence
of women's rights. And Mr. Byng is left to Jean. He will
chatter nineteen to the dozen, and Jean will look like a
martyr. But—" hopefully—"if you wouldn't mind dropping
out those two, it's easy enough to rearrange. I'll take Mrs.
Trevelyan, and—"
"So very uncomfortable!" sobbed Sybella, feeling herself

dethroned; and much as she disliked the troubles and
responsibilities of office, she by no means disliked its
dignities.
"Uncomfortable! I don't see why! Really I don't understand

what you have to cry about. You can't surely expect me
never to ask my friends to The Brow. That would be rather
hard lines!"
Sybella wept lugubriously.
"Don't you see? I've waited till now, but people will expect a
difference. I'm glad enough that you should have your
cronies as often as you like—any number of them—why,
I've thrown a couple in, purely on your account. Only I must
have my turn."
"To ask Mr. Trevelyan to dinner! And after all these years!
Never once since my dear aunt—! And with his views!"
wailed Sybella.
"And I don't see how one's to ask him without his views!"
murmured Cyril. Then aloud, "That's the very thing! I would
have asked him to dinner hundreds of times, but I knew
you wouldn't consent so long as you had the responsibility,
you know. So I just had to wait . . . It's no good discussing
his views with you, because you go by what Colonel
Atherstone says, while I know the man himself. If you really
knew Mr. Trevelyan, you couldn't help feeling differently . . .
As for Jem Trevelyan, the more we can see of him, the
better. He's a first-rate fellow—every way! . . . But I don't
want to bother you—" in a tone of relenting which brought
one gleam of hope to Sybella's breast. "If you dislike the
thing so much, and would rather make some other
arrangement for yourself for that evening, it is quite easy.
Evelyn would come and head my table. There's no real
difficulty."
"My table" settled the matter.
Sybella beat a retreat to her own room, but opposition

ceased. The last shot had told. To abdicate in favour of
Evelyn, for even one night, was no part of Sybella's policy.
Cyril had made up his mind to strike, once and for all, for
liberty. A wiser woman than Sybella would have foreseen
this, and by judicious yielding would have obviated the need
for any such self-assertion on Cyril's part. Had she at once
yielded the reins to him, he would probably have put them
back into her hands. But striving to retain too much, she
was in danger of losing everything.
Sybella, unfortunately, was not wise. She gave in because

she had no choice; but for days she sulked; and Cyril's
kind-mannered overtures, designed to show that he had no
wish to give pain, met with a snappish response.
Little as Sybella knew it, she was slowly killing her last
remnants of power over Cyril. A gentle and loving woman
might have guided him with a rein of silk, might have done
with him almost what she would. His affectionateness could
have been worked upon to any extent. But unauthorised
attempts at control roused all his latent powers of
resistance; and ill-temper on her side deadened feeling on
his. Nothing is so deadening to affection as the constant
friction of an uncertain and irritable temper. Cyril had once
been really fond of Miss Devereux; but through years, the
fondness had been lessening under the chill of her
uncontrolled egotism, and this autumn's struggles bid fair to
put it out of existence altogether.
As the dinner-party drew near, Sybella had to put aside

irritation so far as to prepare for it. She found that, if she
did not exert herself, arrangements would be taken out of
her hands. Thereupon she consented to listen, with an
injured air, to what Cyril had to say, and she gave requisite
orders.
One thing tending to smooth her ruffled feelings was Cyril's

interest in the new dress with which he insisted on
presenting her. She had plenty of dresses already; but no
doubt he meant the gift for a peace-offering.
A difficulty arose. Cyril wanted Miss Devereux to have a

handsome black silk or satin; and Sybella desired pale
mauve, trimmed with white lace. Cyril suggested grey as a
compromise; but Sybella held to the mauve. She had worn
a delicate straw-coloured silk on Cyril's birthday, and Lady
Lucas had congratulated her on her youthful looks. Lady
Lucas was famed for saying smooth things, and to other
people, it had seemed that the too light dress and too
juvenile hat had brought out the deepening rumples in
Sybella's cheeks, and had shown off the ridges in her
throat. But these remarks had not reached Sybella.
After all, she was only just over fifty; and what is fifty
compared with—say, with eighty? Sybella felt young still;
and she probably would feel the same, if she should live to
be ninety; not because she kept youth's elasticity, which
does occasionally last into old age, but because she was a
creature of one-sided development, and part of her brain
had never fully emerged from the semi-infantine stage.
Hence her tendency to gush.
Cyril, at twenty-one, naturally looked upon fifty as

somewhat advanced; and, theories of age apart, he was
keen enough to see that "Aunt Sybella" looked far better in
middle-aged grey or black than in pale straw: or in mauve
as delicate as the blue of "love-in-a-mist." However, not
wishing to give fresh offence, he bought the coveted hazy
hue; and Sybella, in consultations with her dressmaker,
became almost reconciled to the thought of "that dreadful
dinner-party."
All the invitations were accepted, including Jem's. He knew
that he would meet Evelyn, and might probably have to
take her in to dinner. What then? All "that" was over—a
thing of the past. Evelyn Villiers was merely a pleasant
acquaintance to him now, and a rather frequent member of
his congregation. She seemed to be gradually sliding away
from St. John's, and slipping into the Parish Church. Mr.
James Trevelyan "helped her," she said quietly, and her
husband had liked him. But Jem knew well that they could
never be anything further, one to the other.
He did not even think that he wished for anything further in

their intercourse. Once, undoubtedly, he had wished it.
Whether he had ever been genuinely in love with her, he
was not now quite sure. She had been to him as a "bright
particular" distant star; as an ethereal unearthly being; as a
lovely dream; as "an angel," in short. So he had once told
Jean, and it was true. But Jem was older now, and Evelyn
was not exactly an angel.
They had exchanged calls. Evelyn had found Mrs. Trevelyan

out, and Jem and his mother had found Evelyn in. She had
been rubbed the wrong way by a prolonged call, and a
lengthy dissertation on the evils of the age, from Colonel
Atherstone. Evelyn always bore with him for her husband's
sake; but he left her used up and flat, even petulant in a
gentle fashion. She vented her petulance once or twice on
the unoffending Miss Moggridge; and though Miss
Moggridge always seemed to enjoy whatever Evelyn did,
the faintest sign of ill-temper in his "angel" was a shock to
Jem. He did not expect women in general to be entirely
above all human weakness; he was not so unreasonable.
But Evelyn was different!
Her violet eyes had their old pathetic unrest; only, perhaps,
such unrest is more pathetic at twenty-five than at twenty-
nine, especially when the twenty-nine looks like thirty-five;
and then craving for something unattainable had grown into
what was more like discontent. Nothing can ever be less
attractive than discontent.
Moreover, Jem was in a measure preoccupied. He had a

great deal of work, worry, and responsibility, all pressing on
him. So though he had come to Dutton with some secret
dread lest the old pain might revive, it had as yet shown no
symptoms of such a resuscitation.
In his East-End Parish, Jem had been judging by that

somewhat doubtful test, success—the right man in the right
place. He had exactly suited his work, and his work had
exactly suited him.
Perhaps that was why he could not be suffered to remain

there indefinitely. Friction is often a necessity for the
polishing of character.
Jem was likely to have friction enough in Sutton.
His first sermon, after reading himself in, had been

preached some three or four weeks back; and Dutton was
in a turmoil of talk for days afterwards to make out "what
he was." A goodly array of Dutton people had crowded in
from other Churches to hear that sermon; not with the
smallest intention of being taught by it, but merely to judge
therefrom the mental and spiritual standing of the new
Rector. Was he able? Was he interesting? Was he dull? Was
he High? Was he Evangelical? Was he Broad? Would he
think this? Would he say that? Would he do the other?
Some asked the more pertinent question, Was he a good
man?—But this, translated, too often meant only, Does he
hold my opinions?
So they all sat and listened, and each held up as a test the
little measuring tape of his own particular views, to see if
the Rector's views fitted accurately thereto, in length, and
breadth, and thickness.
Certain of the St. John's congregation were present among

others; not, of course, from any bad habit of wandering, but
solely for the good of their neighbours. If Jem were an
undesirable Rector, the sooner folks were warned off from
him, the better!
Colonel Atherstone watched solemnly for the "dangerous

doctrines," which he had resolved beforehand were sure to
come; and Lady Lucas nodded sleepily in a conspicuous
corner, content to have pitched upon a party catch-word,
with the quoting of which she might thenceforward label
him; and Miss Devereux endeavoured perplexedly to wade
after thoughts beyond her depth, which were therefore
"erroneous."
Others present, like-spirited, though not of St. John's, heard

no less critically. Miss Moggridge found him "not Broad
enough;" and somebody else found him "not High enough;"
at the very moment that Miss Atherstone was settling her
bonnet-strings, and privately dubbing him "a concealed
Jesuit."
Few among the herd of critics had leisure to notice the

childlike trust, the earnest purpose, the burning love to God
and man, which swept along the preacher himself, and filled
the Church with an overflow of the Spirit of Christ.
For all they wanted to know was: "Which party?" And this
they could not find out.
Jem, while an ardent Churchman, was no party-man. He

had the strength to accept Divine Truth wherever he found
it, even in the face of its especial patronage by any party.
Naturally, this made his position not an easy one in a place

cut up into cliques and parties, social and religious.
CHAPTER VII.
THE SOCIAL BOARD.
"Where men of judgment creep and feel their way,

The positive pronounce without dismay;
Their want of light and intellect supplied
By sparks absurdity strikes out of pride:
Without the means of knowing right from wrong,
They always are decisive, clear, and strong."
COWPER.
DINNER at The Brow was in full swing before anybody held

a match to the combustible elements there gathered. Miss
Devereux had made fretfully sure of an explosion. She held
a ladylike belief that if a gun is present, it is sure to go off,
forgetting that even a loaded gun will lie quiescent until
somebody pulls the trigger.
Cyril was at his best, handsome and conversational; and
Lady Lucas' beaming countenance seemed to bespeak her
forgiveness of the company into which she found herself
plunged. After all, had not the Trevelyans ancestors—and
were there not blue ingredients in the Trevelyan blood?
Mrs. Trevelyan, "Jem's mother" as she was called by many,

was the model of a sweet elderly lady, and Evelyn was more
like her old self than Jem had yet seen her. Jem himself
looked fagged and out of spirits with the worries of the past
month. Perhaps he felt a little disappointed at not having to
take Evelyn in; at all events, Jean thought so, even while
dutifully "not allowing herself" to think anything of the kind.
He quite failed to get any manner of a rise out of Miss
Moggridge, for the young baronet's entertainment; indeed,
conversation flagged much between the two. The one being
a man of action, the other a woman of theories, they were
less likely to act match and match-box than Cyril had
expected.
Miss Moggridge was a lady of independent though small

means; not a "companion" in the ordinary sense of the
word, since she received nothing from Evelyn but a home
and the privilege of dancing attendance upon her. She had
no home ties of her own, and she had fallen over head and
ears in love with Evelyn, as one woman does sometimes fall
in love with another. Miss Moggridge did not gush and fuss
sentimentally over her love, as some women do in a like
case—women of Sybella's calibre—but she was silently
ready to give time and life to the object of her affections.
Evelyn, touched by this intense though commonly dumb
devotion, and feeling the need of permanent
companionship, had somewhat hastily suggested living
together—in other words, had offered to take Miss
Moggridge into her ménage. The offer had been at once
eagerly accepted.
But to have a devoted friend out of the house, and to be
with that friend always in the house, are two different
things. A friendship, which is only enhanced by the little
partings and meetings and excitements of the one
existence, will not always stand the pull of the other. The
compact had not long been made before Evelyn began,
after her wont, to regret it.
She was sincerely fond of Miss Moggridge; yet this fondness

was a mild affair compared with the absorbing and jealous
worship of the older lady. Miss Moggridge's dumbness of
love lessened under the thawing influence of perpetual
nearness; and the ardour of a devotion which could never
leave its object alone became a weariness to that object.
Evelyn loved freedom, even while she craved for more ties;
and she found her freedom hampered.
Miss Moggridge was large in make, and superlatively plain.

Her face, no less than her body, was large; the nose was
crooked; the eyes were small; the teeth were discoloured;
the complexion really was "liver-hued." She had not in looks
a single redeeming point; and she was also somewhat
gauche, somewhat excitable, somewhat opinionated,
somewhat clever, and by fits and starts a great talker.
Towards Evelyn she was monotonously mild and yielding on
all questions of opinion: towards other people she was
hardly less monotonously argumentative. All this had been
a matter for amusement in the friend whom Evelyn saw for
an hour or two at a time, but in her perpetual companion,
she did not like it so well. She was equally teased by the
inevitable agreement with herself, and by the inevitable
disagreement with the rest of the world.
There were oppositions and inconsistencies in Miss

Moggridge, as in most human beings. Theologically she
prided herself on being Broad; and she showed her share of
human contractedness by her unlimited abuse of those
whom she counted "Narrow." The abuse was not couched in
unladylike terms, but it was sufficiently severe; and to
Evelyn such tirades always came as an attack upon her
husband's memory. Of course, she never said so; and Miss
Moggridge never guessed what Evelyn felt, or the tirades
would have ceased in her hearing. As they did not cease,
they helped to loosen the bond which attached the two
ladies together.
Miss Moggridge was also an advocate for "female rights;"

and on this topic she was apt to wax explosive, to the
immense delight of young men, who, calm in the
consciousness of their inborn superiority, could afford to
smile. Miss Moggridge might not "see it," but so much the
better fun. Evelyn, however, did not accept certain modern
versions of female rights, and she had begun to grow tired
of the declamations on this subject, once only entertaining.
Side by side with such characteristics were to be found in

Miss Moggridge a large modicum of womanly tenderness
when something or somebody called it out; a painful
womanly consciousness of her own ugliness; and a
vehement love of beauty. There is something pathetic in
such a beauty-loving soul as hers, enshrined in so clumsy a
casket. If, in any mysterious sense, the soul can be
supposed to secrete the body, as a mollusc secretes it shell,
one can only wonder how Miss Moggridge's poetic soul
should have put forth so inadequate an expression of itself.
This jumble of characteristics in female form was now

Evelyn's chosen companion. For how long? Perhaps for the
rest of her life. Could anything ever separate them? Evelyn
sometimes put this question to herself drearily; not that she
did not love Miss Moggridge, but that she did not love to be
bound.

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"I should like to understand more," she said. "What I heard

"There's truth in the tale. He has a desperate tendency that

"He had warning after warning; and it ended in his being

"I wonder any one could marry him."

"You needn't sneer!"

"I really can't think how she could. Was it right?"

"If one could help him really—"

"Soon. In a week or two. That queer little red house near

"What is Miss Lucas like?"

"Oh, rather pretty," with would-be indifference. "You'd never

"Father!" exclaimed Jean. "Why, he has fainted!"

Mr. Trevelyan had never in his life been more ashamed of

Cyril privately doubted whether the attack were a genuine

When with much trouble they had brought Mr. Trevelyan

Once safe in his study, Mr. Trevelyan rallied, and laughed at

"Nothing was wrong," he said. "Merely a touch of over-

He had been to Barclay's cottage, had found him out, and

"A rather disagreeable interview," Mr. Trevelyan admitted.

Jean's adventure was then related; and Cyril ventured to

"Jean ought not to go about alone in such places, now she

Mr. Trevelyan's eyes twinkled, and Jean's quick ears caught

"He will consider that he has given you fair warning."

"Least trouble for myself, no doubt. Not most hopeful for

"Then you will agree with me!" Cyril exclaimed, and

"And you will call?"

"I will do all in my power—and Jean will do all in hers. They

"I'm glad you understand him," Jean answered.

"And oh, for ane-and-twenty, Tam!

SYBELLA DEVEREUX, with a dinner-party hanging over her

Dinner-parties at the Brow were not altogether unusual;

If, however, dinner-parties weighed upon Sybella's

To Sybella herself, the idea had not so much as occurred

Nay, for a while, Sybella had not even expected Cyril to

She was unutterably taken by surprise—"struck on a heap,"

Sybella read the names aloud, with intervening ejaculations.

"Lady Lucas, and the Trevelyans! Impossible, Cyril! I never

"You know, one has to be so very particular who one asks to

"Well, perhaps they would not quite suit," admitted Cyril.

He sat down, facing Miss Devereux with a perverse smile,

"Dr. Ingram! Cousin of all the Trevelyans! Worse and

"They'll pair off well enough," continued the reckless young

Sybella gasped incoherently.