Chapter 6. Entrepreneurship and Starting a Small Business

A(n) ______ assumes risk when deciding to start and run a business.

entrepreneur

A(n) ______ is someone accepting the risk of starting and running a business.

entrepreneur

______ businesses are businesses that are independently owned and operated, are not dominant in their field of operation, and meet certain standards of size in terms of employees or annual receipts.

small

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts is a(n):

small business

Select the characteristics of an entrepreneurial team that will be developing and marketing a new product.

- Each from different areas of business - Members have complementary skills and are creative - A group of experienced people

There are a few hurdles that prevent many small businesses from engaging in the global market. Which of the following are examples of such problems?

- Financing is often difficult to find. - Would-be exporters do not know how to get started.

Chris spent his own money on marketing research, and consulted his sister Kara, who is an accountant. They spent the next few months writing a business plan. Which of the following are some business functions Chris has addressed?

- Planning - Knowing your customers

Which of the following are good ways to learn how to run your own business?

- Run a small business during your off hours - Talk to other business owners - Work for a successful entrepreneur

An inexpensive marketing research study may help you determine which of the following?

- What is an effective strategy for reaching your target market - Whom to select as your target market - Where to locate

Select the characteristics of an intrapreneur.

- a creative person who works within a corporation - someone who uses company's resources to launch new products - he or she generates profits by leveraging a firm's human financial and physical resources.

Entrepreneurs must recognize that they need competent and motivated employees. Since they can't compete with larger firms' pay and benefits, they need to:

- be respectful of employees' opinions - delegate more often - provide more challenging opportunities to learn

Among the hurdles small businesses must overcome in starting to operate globally are:

- bureaucratic paperwork - understanding cultural differences - difficulty finding financing

Managing a small business became relatively easy with the advent of inexpensive personal computers. Inexpensive computer systems and off-the-shelf or even free, open-source software make it easy for the small business manager to:

- follow the daily sales and expenses - manage customer records

All organizations require the following:

- information management - capital

Some common causes of small business failure include:

- no experience in that business or industry - underpricing or overpricing goods or services - starting with too little capital

Select reasons why people become entrepreneurs.

- opportunity - independence - profit

Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:

- to hire a good lawyer and accountant - starting with enough money - that finding and retaining good workers is hard

Match the goals with the type of business person.

Entrepreneur- Desire to grow the business and generate wealth. Micropreneur- Desire to remain small and balance lifestyle with work.

______ refers to accepting the risk of starting and running a business.

Entrepreneurship

______ are creative people who work as entrepreneurs within corporations.

Intrapreneurs

True or false: Most entrepreneurs do not get their ideas from a flash of inspiration; they come more from their passions or looking at problems.

True

True or false: The principles of management are similar for a small neighborhood business and a giant global firm.

True

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are:

a market

To keep track of daily sales, expenses, profits, inventory control, customer records, and payroll a small business needs a good

accounting system

Understanding where to locate your business, who your target market is, and how to reach them, can be accomplished through

an inexpensive market research study

A(n) ______ can benefit both the trainee and the business owner by hiring the trainee to learn small-business management while assisting the owner in getting daily work done.

apprentice

A(n) ______ is hired to assist the owner of a small business while gaining experience.

apprentice

David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how:

apprenticeships can benefit both the business owner and the apprentice

In 2019, online retail sales reached over $365 ______, or approximately ______ percent of all retail sales.

billion; 12

A(n) ______ is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s).

business plan

Mark recently started a small consulting firm. He is drafting a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s). Mark is writing a(n) ______ ______.

business plan

A market consists of consumers with unsatisfied wants and needs who have both resources and the willingness to:

buy

More personal ______ service and the ability to respond quickly is an advantage for small businesses.

customer

Being self-directed, self-nurturing, action-oriented, and tolerant of uncertainty are all considered characteristics of a(n):

entrepreneur

A(n) ______ team is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.

entrepreneurial

Individuals who possess such attributes as being self-directed, action-oriented, and tolerant of uncertainty can make excellent ______ like Bill Gates and Steve Jobs.

entrepreneurs

Many ______ use their time, money, and energy to turn their passions into sustainable businesses. They are comfortable being their own bosses and are not afraid of failure.

entrepreneurs

Local community college classes are a good place to start to learn about business and ______.

entrepreneurship

Becoming an apprentice, talking to other business owners, and working for a successful entrepreneur are all examples of effective ways to obtain ______ for running your own business.

experience

Planning, _______, keeping good business records, knowing your customers, and managing employees are what it takes to start and run a small business.

financing

Gaining financing, knowing how to get started in exporting, and navigating bureaucratic paperwork are major hurdles to consider when getting started in ______ business.

global

As a small business grows, it is ______ to oversee every detail; entrepreneurs must train and motivate employees.

impossible

The expansion and development of the Internet has sprouted a world of small web-based businesses. This, among other reasons, may explain why online sales are rapidly:

increasing

According to a recent study, offering low-cost offices with basic services to new businesses in the early stages of development results in an 87% success rate of ______ graduates.

incubator

Business ______ are centers that offer businesses in the critical stage of early development low-cost offices and access to basic services such as accounting, legal advice, and secretarial help.

incubators

An inexpensive ______ ______ ______ can help you determine where to locate your business, whom to select as your target market, and what is an effective strategy for reaching it.

marketing research study

Entrepreneurs start a business with the desire to grow the business and generate wealth while ______ start a business that will stay small, allowing them to have a balanced lifestyle and the ability to do the kind of work they want to do.

micorpreneurs

Two advantages small firms have over large firms include more personal customer service and the ability to respond quickly to:

opportunities

Managerial incompetence and inadequate financial planning are two common reasons for ______-______ failure.

small-business

An entrepreneurial ______ is a group of experienced people from different areas of business who join together to form a ______ team with the skills needed to develop, make, and market a new product.

team; managerial

Daniel wanted to start his own small business. After spending his own money on marketing research, Daniel asked his friend Chase to be his accountant. They spent a few months writing a business plan, which then they presented to a bank. Daniel:

understands the steps needed to start a small business

Phil invests in new businesses in exchange for partial ownership in those businesses. Phil is a(n) ______ ______

venture capitalist

______ ______ are individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

venture; capitalists

After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates:

why people take the risks of entrepreneurship