Chapter 1 & 2 study review for Entrepreneurship

The majority of small companies are concentrated in the ________ and ________ industries.

retail; service

All of the following represent barriers to creativity that entrepreneurs impose upon themselves except:

searching for more than one answer.

John has come to you for advice on starting a business venture. He wants to know the best way to gain the experience he'll need. You suggest that he:

seek experience in the field he wishes to enter by working for another firm.

Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs.

serial

Women owned businesses dominate ________ and ________ industries.

services; retail

Entrepreneurs that use their skills to create a profitable business that is designed to achieve social and environmental goals for the common good are known as:

social entrepreneurs.

Copyrights protect the creator of original works such as:

software, choreography, and motion pictures.

Preparation:

state of making something ready for use typically done in anticipation of an event occurring in the near future.

Which of the following is NOT one of the forces driving the entrepreneurial trend in our country?

Shift away from a service economy

Small companies that have expanded successfully into foreign markets tend to rely on all but which of the following strategies? A) Research foreign markets thoroughly. B) Focus on many countries initially. C) Utilize government resources designed to help small companies establish an international presence. D) Forge alliances with local partners.

Focus on many countries initially

Which of the following is NOT an enhancement to individual creativity?

Working without breaks until the project is complete or the problem is solved.

Value added service:

the ability of an organization to anticipated and deliver goods and or services that exceed customer's expectations.

Innovation:

the ability to apply creative solutions to problems or opportunities to enhance or to enrich people's lives; doing new things

Creativity

the ability to develop new ideas, and discover new ways of looking at problems and opportunities; thinking new things

Reward:

the financial or nonfinancial return for the performance of the desired behavior

Risk:

the quantifiable probability of loss Unknown factor: loss or value

Entrepreneurship:

the result of a disciplined, systematic process of applying creativity and innovation to the needs and opportunities in the marketplace.

Harvard's Theodore Levitt says that creativity is ____________ new things, and innovation is ______________ new things.

thinking; doing

Employees must be given the tools and resources they need to be creative. One of the most valuable resources is:

time.

Any distinctive word, phrase, symbol, name or logo a firm uses to distinguish itself or its products is called a:

trademark.

Empower:

train, tools, trust

Trade dress is the unique combination of elements that a company uses to create a products image and to promote it. T/F

true

Potential drawbacks of entrepreneurship may include:

uncertainty of income, risk, long hours, and high stress.

mall business creates 60 percent to 80 percent of all new jobs in the United States. The majority of these businesses are involved in what type of industry?

Service and Retail Industries

"Copreneurs" represent one of the fastest growing business sectors and are defined as:

entrepreneurial couples that work together as co-owners of their business.

What factors and forces are encouraging the current trend in entrepreneurial activity?

growing number of colleges and students involved with entrepreneurial studies

The demographic attributes of successful entrepreneurs are:

highly diverse relating to age, gender, and ethnicity.

At which stage of the creative process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the "Eureka factor" or the "light bulb goes on"?

illumination

Consumer:

individual who has a need for your product or service and uses it. Unless it's an impulse buy.

Customer:

individual who has a need for your product or service, uses it, is satisfied and willing to return.

The ability to apply creative solutions to problems and opportunities to enhance or to enrich people's lives is called:

innovation

Imbalance

is not enough planning or following through in one area or another

Problem

is the decision on unknown factors

The right brain is guided by:

kaleidoscopic, lateral thinking.

Functional areas of management

leadership management: finance/accounting, Operations/production, marketing/sales: must be balanced.

All of the following are enhancements to individual creativity except

limiting your reading sources

The left-brain is guided by:

linear, vertical thinking.

In addition to the opportunity to create their own destiny and enjoy what they do, entrepreneurs also benefit from the ability to

make a difference in an area important to them and be recognized for those efforts.

We hire people to:

make money or save money, otherwise you are not needed

The primary cause of small business failures is:

management mistakes.

Most startup companies can expect to need ________ capital than they anticipate.

more

The majority of new business owners work:

more than 40 hours per week.

International opportunities are:

now within the reach of entrepreneurial businesses and may present significant opportunities.

In a large organization, an individual may be stifled and limited by a wide variety of factors. However, by owning one's own business, the only limits are one's own creativity, talent, and determination. In this sense, small business ownership offers the advantage of the:

opportunity to reach one's full potential.

entrepreneurs tend to be overly ________ and commonly misjudge the ________ requirements of going into business.

optimistic; financial

A ________________ is a preconceived idea of what the world is, what it should be like, and how it should operate.

paradigm

Research into the operation of the human brain shows that each hemisphere of the brain:

processes information differently.

Most entrepreneurs believe that ________ is what matters most, but ________ is the most important financial resource for a small business owner.

profit; cash

David Birch describes small companies growing at 20 percent or more per year with at least $100,000 in annual sales that create 70 percent of the net new jobs in the economy as:

"gazelles."

5 steps in decision making

1) Problem recognition 2) Search process 3) Evaluating alternatives 4) Selection stage 5) Evaluation of decision

According to the U.S. Small Business Administration, a common delineation of a small business is one that employs fewer than:

100 people.

Approximately ________ percent of corporate managers who are "cast off" as companies downsize become entrepreneurs.

20

According to the NFIB Small Business Policy Guide, after 10 years in business, the percentage of small firms surviving is ________.

25

Entrepreneurial activity is essential to a strong economy and a recent GEM study noted that entrepreneurs are most likely to launch their businesses between the ages of:

25-44

Although there is a trend toward younger entrepreneurs, most entrepreneurs launch their businesses between the ages of ________ and ________.

25; 44

It is estimated that ________ percent of new businesses fail within two years, while ________ percent fail within four years.

35; 54

Women own an estimated ________ percent of all privately-held U.S. businesses.

41

Small companies pay more than ________ percent of total private payroll in the United States.

45

Resources of business

6 M's: men, money, machines, materials, methods, markets

Within 6 years, ________ percent of new businesses will fail.

64

David Birch, president of the research firm Cognetics, suggests that three percent of small businesses create approximately ________ percent of new jobs.

70

What percentage of companies in the U.S. are considered "small"?

99

Decision:

A choice made between alternative courses of action in a situation of uncertainty

Which of the following is NOT a characteristic of a successful working relationship between copreneurs? A) A clear definition of one partner as "boss" and the other as "subordinate" B) Compatible business and life goals C) Complementary business skills D) A clear division of roles and authority based on each partner's skills and abilities

A clear definition of one partner as "boss" and the other as "subordinate"

Creativity often involves creating something from nothing. However, it is more likely to result in

All of the above

Entrepreneurs can increase their chances for success if they: A) know their business in depth and develop a solid business plan. B) manage their financial resources and understand financial statements. C) learn to manage people and keep in touch with how they react to stress and balance their health needs with the needs of the business. D) All of the above

All of the above

In terms of innovation and research, small businesses: A) create four times the innovations per research and development dollar than medium-sized firms and 24 times the innovations per research and development dollar than large companies. B) contribute 20 percent more innovations per employee than large companies. C) have created such important innovations as air conditioning, FM radio, the laser, the automatic transmission, and the personal computer. D) All of the above

All of the above

Socioeconomic forces that are driving the positive entrepreneurial trend in the U.S. economy include: A) America's view that entrepreneurs are considered to be "heroes." B) entrepreneurial education has increased. C) the shift to a service-based economy. D) All of the above

All of the above

The nation's small businesses: A) employ more than 51 percent of the nation's private sector workforce. B) create more jobs than do big businesses. C) account for 47 percent of business sales. D) All of the above

All of the above

Which of the following is a benefit of entrepreneurship? A) The opportunity to gain control over your own destiny B) The opportunity to reach your full potential C) The opportunity to do what you enjoy D) All of the above

All of the above

Which of the following is/are true regarding business plans? A) Provide a pathway to success. B) Allow entrepreneurs to replace faulty assumptions with facts before making the decision to go into business. C) Create a benchmark against which entrepreneurs can measure actual company performance. D) All of the above

All of the above

"Verification" refers to: a. validating the idea as accurate and useful. b. possibly conducting experiments, running simulations, test marketing a product or service. c. possibly asking questions such as "will it work?" and "is it really a better solution?" d. All of the above.

All of the above.

Creativity often involves creating something from nothing. However, it is more likely to result in: a. elaborating on the present. b. putting old things together in new ways. c. taking something away to create something simpler or better. d. All of the above.

All of the above.

Hiring a diverse workforce: a. helps in enhancing organizational creativity. b. allows for different ideas and varying methods of problem solving. c. brings in people from different backgrounds, with different cultural experiences, hobbies, and interests. d. All of the above.

All of the above.

Joseph Schumpeter wrote that entrepreneurs perform the vital function of: a. challenging accepted ways of doing things. b. creative destruction. c. revolutionizing current patterns of production. d. All of the above.

All of the above.

Research shows that anyone can learn to be creative. The problem is: a. many organizations fail to foster an environment that encourages creativity. b. most people never tap into their pools of innate creativity. c. most people have never been taught to be creative. d. All of the above.

All of the above.

Steps in the Patent Process include: a. establishing whether or not it is a novelty. b. documenting and verifying the date the idea was first conceived. c. searching existing patents. d. All of the above.

All of the above.

Which of the following questions should you consider before entering a lawsuit to protect intellectual property? a. Can you afford the loss of time, money and privacy the lawsuit will bring? b. Can the opponent afford to pay if you win? c. Do you expect to get enough from the suit to pay for the costs of hiring an attorney? d. All of the above.

All of the above.

What is the entrepreneurial "secret" for creating value in the marketplace?

Applying Creativity and Innovation to Solve Problems

Which of the following statements concerning small businesses and international markets is false? A) Although terrorism and global recession have slowed the growth of international trade somewhat, global opportunities for small businesses have a long-term positive outlook. B) Although the U.S. is an attractive market, approximately 95 percent of the world's population lives outside its borders. C) Because exporting is so complex and requires a company to have so many international experts on staff, exporting is not feasible for small businesses. D) Small companies comprise 97 percent of all businesses engaged in exporting, yet they account for only 30 percent of the nation's export sales.

Because exporting is so complex and requires a company to have so many international experts on staff, exporting is not feasible for small businesses.

Ways to avoid becoming a failure statistic includes the following EXCEPT: a. Understand the company's financial statements b. Have a passion c. Have adequate startup capital d. Create a competitive edge e. Borrow the total investment needed

Borrow the total investment needed

______________ is a process in which a small group of people interacts to produce a large quantity of imaginative ideas.

Brainstorming

Economies that were state controlled and centrally planned are now fertile for growing small businesses. The countries being part of this group include the following EXCEPT:

Canada

The ability to see the similarities and the connections among various data and events is called:

Convergent thinking

________________ thinking is the ability to see similarities and ___________________ thinking is the ability to see differences among various data and events.

Convergent; Divergent

A ________ is an exclusive right that protects the creators of original works such as literary, dramatic, musical, and artistic works

Copyright

A _____________ is an exclusive right that protects the creators of original works such as literary, dramatic, musical, and artistic works.

Copyright

Which of the following was not identified as one of the suggestions for small business success? A) Develop a business plan as you grow your business. B) Manage your financial resources and understand financial statements. C) Know your business in depth. D) Learn to manage people successfully.

Develop a business plan as you grow your business.

The ability to see the differences among various data and events is called

Divergent thinking

During the Incubation Phase of the Creative Process, the entrepreneur might do all of the following EXCEPT which one to let ideas "marinate" in his mind?

Don't allow himself to daydream.

Which of the following is NOT a common profile characteristic of a typical entrepreneur?

Enjoy managing people

The left brain relies on kaleidoscopic, lateral thinking t/f

False

What is the purpose of a business?

Identify, create, and maintain profitable customers

At which stage of the Creative Process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the "Eureka Factor" or the "light bulb goes on"?

Illumination

The focus of this step in the Creative Process is to transform the idea into reality.

Implementation

Feedback:

Information received from your internal or external environment 2 requirements are: timely and accurate

Which stage of the Creative Process requires one to develop a solid understanding of the problem or decision?

Investigation

Which hemisphere of the brain is responsible for language, logic, and symbols?

Left Hemisphere

Which hemisphere of the brain processes information in a step-by-step fashion?

Left Hemisphere

_______________ vertical thinking is narrowly focused and systematic, proceeding in a highly logical fashion from one point to the next.

Left-brained

Home-based businesses are increasing at a significant rate. Which one of the following is NOT a factor in the home being the first choice location?

Less inventory of product required

Which of the following is a commonly experienced drawback to being an entrepreneur?

Long hours required

________________ is a graphical technique that encourages thinking on both sides of the brain, visually displays the various relationships among the ideas, and improves the ability to view a problem from many sides.

Mind-mapping

Which of the following statements is not true regarding the diversity of entrepreneurs? A) Minority-owned businesses have come a long way in the past decade, and their success rate is climbing. B) Minority-owned businesses now account for approximately one-third of all businesses in the U.S. C) Immigrants with more education and experience than those of the past are coming to the U.S. and succeeding in entrepreneurial ventures. D) The numbers of part-time and home-based entrepreneurs are rising.

Minority-owned businesses now account for approximately one-third of all businesses in the U.S

________ percent of all U.S. businesses are family owned and managed.

Ninety

The benefits of entrepreneurship include the following EXCEPT:

Opportunity to take significant risk with other's money

Which stage of the Creative Process includes on-the-job training?

Preparation

Why are decisions so hard to make?

Quality of decisions decide how you move up in the company, and how long you stay in business

The premise behind _____________ is that transforming an idea into an actual model will lead to improvements in its design.

Rapid Prototyping

Which hemisphere of the brain is responsible for the body's emotional, intuitive, and spatial functions?

Right Hemisphere

Which hemisphere of the brain processes information all at once and by relying heavily on images?

Right Hemisphere

_______________ lateral thinking is somewhat unconventional and unstructured.

Right-brained

To which governmental office must applications for patents be submitted?

The U.S. Patent and Trademark Office

Which of the following statements about women-owned businesses is false? A) The businesses women start tend to be smaller than those men start. B) Women own about 28 percent of all privately held businesses in the U.S. C) The survival rate of women-owned businesses is much lower than that of U.S. businesses overall. D) Most women-owned companies are concentrated in retailing and services.

The survival rate of women-owned businesses is much lower than that of U.S. businesses overall.

Which of the following is NOT one of the ways entrepreneurs can stimulate their own creativity and encourage it among their workers?

View challenges as problems

When developing creative solutions to modern problems, entrepreneurs must:

go beyond merely using whatever has worked in the past.

Harvard's Ted Levitt says that creativity is ________ new things, and innovation is ________ new things

Thinking, doing

Which stage of the Creative Process involves viewing the similarities and differences in the information collected?

Transformation

Entrepreneurs typically possess:

a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious.

Roger von Oech believes that blindly following rules leads to:

a mental block towards creativity.

Failure:

a natural part of the creative process

"Verification" refers to: possibly asking questions such as "will it work?" and "is it really a better solution?" validating the idea as accurate and useful. possibly conducting experiments, running simulations, and test marketing a product or service. All of the above

all of the above

Entrepreneurs are characterized by: A) skill at organizing. B) desire for immediate feedback. C) high energy levels. D) All of the above

all of the above

Which of the following forces is driving the entrepreneurial trend in our nation? A) Increased entrepreneurial educational opportunities B) E-commerce and the World Wide Web C) Technological advancements and modern business machinery D) All of the above

all of the above

Which of the following is a characteristic of copreneurs? A) Mutual respect B) Complementary business skills C) A clear division of roles and authority D) All of the above

all of the above

Which of the following statements is true of Generation X? A) They are the most entrepreneurial generation in history. B) They are three times more likely to start businesses than other generations. C) They are responsible for approximately 80 percent of all business start-ups. D) All of the above are true.

all of the above are true

Effective Brainstorming involves all of the following except:

an effective method to evaluate ideas

Small companies:

are the leaders in offering training and advancement opportunities to workers.

Entrepreneurs may find benefit from the Internet due to its potential:

as a relatively low-cost solution to expand its revenue generating abilities.

creativity important source

building a competitive advantage but also a necessity for survival

Melinda and John Perez, both corporate attorneys in New York City, have grown tired of their lengthy daily commute, the stress of their jobs, and the overbearing policies of their employers. They have decided to leave their six-figure jobs and together open a guide service in Wyoming. Melinda and John are examples of:

corporate castoffs and corporate dropouts.

An entrepreneur is one who:

creates a new business concept for the purpose of achieving profit and growth by assembling the necessary resources to capitalize on identified opportunities.

The ability to develop new ideas and to discover new ways of looking at problems and opportunities is called:

creativity

Entrepreneurship is a constant process that relies on:

creativity, innovation, and application in the marketplace.

Setting your business apart from the competition can include ______, _____, _____, and ______.

customer service; convenience; speed; quality

Change consumer to customers

deliver value added service.

The three principles (3 R's) of Rapid Prototyping are:

develop a rough model, rapidly and for the right problem.

One of the most significant economic developments in recent business history relates to the:

entrepreneurial spirit.

Entrepreneurs can stimulate their own creativity and encourage it among workers by:

expecting and tolerating failure.

Opportunity

exploitable set of circumstances with an uncertain outcome, requiring the commitment of resources and involving exposure to risk

The only people who ________ are those who never do anything or never attempt anything new.

fail

One hallmark of successful entrepreneurs is the ability to:

fail intelligently.

Mind-mapping is a useful tool for jump-starting creativity. It includes all of the following except:

forcing creativity when ideas start to trickle.

In his book A Whack on the Side of the Head, Roger von Oech views a "playful attitude" as:

fundamental to creative thinking.

According to a study conducted by the Center for Women's Business Research, the most common reason women give for starting their own businesses is to:

gain control over their schedule.

All of the following are characteristics of the typical entrepreneur except: A) confidence in his/her ability to succeed. B) value of money over achievement. C) desire for immediate feedback. D) a future orientation.

value of money over achievement.