Ch 5 Quiz
_____ is at the core of most business failures.
Inadequate planning
Hannah Li wants to quit her job as a legal secretary and start her own small business. She knows that she will be successful if she can find the right idea. Where can Li look for ideas for her new business?
All of the above
Michael Bronner made a fortune in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for college and is extremely successful. Entrepreneur Bonner would more than likely have which of the following characteristics?
All of the above
In buying an existing business, the prospective buyer should ask questions about the operation of the business. Which of the following would be an appropriate question to ask?
All of the above are appropriate questions to ask.
Which of the following is a characteristic of the entrepreneurial personality?
Ambitious
_____ are individual investors or groups of experienced investors who provide funding for start-up businesses.
Angel investors
The Small Business Administration (SBA) offers a broad range of aids to small businesses. They include:
guarantees on loans made by private lenders
Established small businesses are defined as companies that have been in business at least fifteen years and employ between 50 to 500 employees.
False
_____ financing is a form of financing consisting of funds raised through the sale of stock in a business.
Equity
In the past few years, the federal government has cut back burdensome government regulations and paperwork to the point that they are almost non-existent for small business owners.
False
Unlike large corporations, sole proprietorships do not need a business plan.
False
An advantage of a small manufacturer over a large manufacturer is the speed with which new products can be introduced to the marketplace.
True
Entrepreneurs typically are innovators who start companies to pursue their ideas for a new product or service.
True
Inadequate early planning is often at the core of small business failures.
True
A _____ is a formal written statement that describes in detail the idea for a new business and how it will be carried out.
business plan
Mark Ghermizian had quit his job and was looking to start a small business so he could be his own boss. When he read that people spend up to fifteen minutes every day staring at a bathroom stall door, he decided he would find advertisers who wanted to pay to have their advertising messages on bathroom stall doors. Since he has his idea, Ghermizian's next step is to:
choose a form of business organization
After graduating from college, Joseph Tantillo decided to start a retail Web site that specializes in personalized Greek apparel. To fund his Web site, he borrowed money from his parents (who expect to be repaid with interest). In other words, he used _____ financing.
debt
Andy Yocom saw prime advertising space on the flags on the golf course. He reasoned that any marketing messages would get prominent attention if they were placed on the flags since golfers focus on them when they take their shots. As a result Yocom used his own initiative and money to start Invision Golf Group Inc. Yocom is an example of a(n):
entrepreneur
Which of the following is a trend that is changing the face of entrepreneurship and small business ownership?
entrepreneurial diversity
Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. During the development of this high-growth company, Arnold and Bradford attracted a group of investors who purchased stock in their company and provided them with ______ financing.
equity
Navim Jain sold stock to investors in order to finance Sparkart, LLC, a company that markets software to track how many times music is played and shared among peers. Jain used _____ financing.
equity
Who provides the start-up financing for the majority of new small businesses?
the business owner and his or her family and friends
One of the reasons why there has been a dramatic increase in the number of small business startups is rapidly changing technology.
True
The most common use of a business plan is to persuade lenders and investors to finance the venture.
True
The first step in starting your own business is:
a self-assessment
Amex Inc. is a worldwide company that specializes in high growth industries. It acts as a global marketer for small manufacturers of medical products, telecommunications products, and data management products. Amex Inc. is an example of a(n):
export management company
Once the business plan is finished, the next step is to:
find financing for the business
In 2000, Eric Baker and Jeff Fluhr came up with a concept that would do away with scalping if they had their wish, and everyone used StubHub.com. The Internet company brings people who want tickets and people who have tickets that they are not using together. The company has assisted in the sale of tens of millions dollars worth of tickets annually and is always trying to sell more. It charges a small fee for its assistance. Baker and Fluhr would be classified as:
growth-oriented entrepreneur
The Small Business Administration (SBA):
helps people start and manage small businesses
When Allison Logue found out her children were allergic to corn, she started looking for sweets and starches that were corn-free and was dismayed to find very few such products on the market. As a result, she has started her own small business to produce and market corn-free desserts. It is a small market, and Logue plans to keep her business small. Logue is an example of a(n):
micropreneur
When Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men were the ones who sailed, and women were their crew. She finally convinced someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship. Pogell started small and plans to stay small. She would be correctly called a(n):
micropreneur
Which of the following elements does NOT typically appear in a well-prepared business plan?
names of all employees
Marc Adler is the owner of Macquarium, a multimillion-dollar communications company that does everything from video productions to creating Web sites to public relations campaigns. Macquarium has done this sort of work for BellSouth and SnapOn Tools. Even though these companies could have prepared their videos and created their Web sites in-house, these tasks were:
outsourced
Angel investors:
provide funding for start-up businesses