ETR401 - Chap 4,5,6

b

"Beyond the start-up dollars that will be needed to buy any raw materials to make the product or develop the service, what information, relationships, and degree of effort will be needed to turn the idea into reality?" pertains to which of the following? A. Is your product or idea innovative? B. What resources are needed to take the idea and sell it to the customer? C. Describe how you create value for your customers. D. What marketplace need does your product address better than any other option?

b

"S" in the creativity tool SCAMPER stands for A. strategize. B. substitute. C. submit. D. solicit.

a

"Why might a cell phone that can play music MP3s be a better approach than a dedicated MP3 player?" pertains to which of the following questions? A. Is your product or idea innovative? B. Why will customers buy your product? C. Is your underlying technology unique? D. Who are the people behind the idea?

b

) In a typical I 2 P analysis, this is a nontechnical description of the concept simple enough for everyone to understand it. A. What is the market and its size? B. What is your product or idea? C. Why will customers buy your product? D. Who are the people behind the idea?

c

) _____ is a payment to a licensor based on the number or value of licensed items sold. A. Milestone payment B. Lump sum payment C. Royalty D. An exclusive right

B

21. Which of the following is NOT a path to full-time business ownership? A. Franchising B. Stand retailing C. Starting a new business D. Buying an existing business

D

21. Working at your business 35 hours a week or less is called A. franchising. B. full-time self-employment. C. aggrandizing. D. part-time self-employment.

A

22. A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a A. franchise. B. license. C. turnkey. D. consignment.

A

22. Which of the following does NOT hold true of part-time self-employment? A. It is a minor portion of all current entrepreneurship. B. There is tremendous volatility as individuals jump in and out of self-employment quickly and frequently. C. It accounts for around half of small businesses in the United States. D. It is the way most people start in entrepreneurship.

C

23. A new business that is started from scratch is called a A. buyout. B. franchise. C. start-up. D. buy-in.

B

23. Full-time approaches include all of the following EXCEPT A. buying or inheriting existing businesses. B. stand retailing. C. franchising. D. opening a new full-time business.

C

24. Part-time businesses are important for which of the following reasons? A. They are important and necessary for our global competitiveness. B. Majority of new inventions have come from part-time self-employed businesses. C. Part-time self-employment is the way most people start in entrepreneurship. D. Part-time businesses provide the cheap labor for large businesses and full-time entrepreneurs.

C

24. Purchases of existing businesses may occur through _____ in which the business is bought over a period of time with money earned from the business. A. turnkey B. cash purchases C. earn-outs D. leveraged buyouts

A

25. The frequency of business starts and stops is referred to as A. volatility. B. aggrandizing. C. bootstrapping. D. moonlighting.

A

25. _____ franchise is one in which every part of setting up the business is handled by professionals. A. Turnkey B. Product or trade name C. Single unit D. Multi unit

A

26. Nowadays, the conventional wisdom is that if you are serious about starting a business, you ought to start a business full time and prepare for it by A. doing a business plan. B. making bylaws. C. doing a strategic plan. D. creating an organizational chart.

A

26. Which of the following is an advantage of a start-up? A. It begins with a clean slate B. It has initial name recognition C. It is easy to establish and provide positive cash flow D. It has easy access to revolving credit

C

27. Which of the following is a disadvantage of a start-up? A. It begins with a clean slate B. Absence of "legacy" locations, buildings, and equipment C. Absence of initial name recognition D. Providing new products or services

C

27. Which of the following statements about a business plan is false? A. A business plan enables you to look at every aspect of your business. B. Business plans are important if you intend to ask others for expertise or financial investments. C. Estimates suggest that a business plan may take anywhere from 10 to 20 hours or more if you are new to business. D. If you are new to business and need to gain basic experience, you might want to obtain other types of experience before writing a business plan.

B

28. All of the following are advantages of a start-up EXCEPT A. the use of the most up-to-date technologies. B. the access to revolving credit line. C. it can be kept small deliberately to limit the magnitude of possible losses. D. it has a clean slate.

B

28. Under which of the following situations might it make better sense to undertake a part-time business first? A. You are buying an existing business B. You want to gain basic experience C. You are opening a franchise D. There is too much competition

D

29. All of the following are disadvantages of a start-up EXCEPT A. absence of initial name recognition. B. access to revolving credit line. C. difficulty in financing. D. it starts with a clean slate.

D

29. All of the following are situations in which it might make better sense to undertake a part-time business EXCEPT A. when you are new to business and need to gain basic experience. B. when you lack resources to pursue a full-scale business. C. when there is a narrow window of opportunity. D. when there is enough time and resources to get the entire business going.

D

30. _____ is/are probably the ultimate resource, and starting a business can tax it heavily. A. Family B. Friends C. Money D. Time

A

30. _____ refers to something the business owns that has economic value or is expected to have economic value in the future. A. Asset B. Revolving credit C. Cash flow D. Synergy

A

31. A(n) _____ credit is a credit agreement that allows the borrower to pay all or part of the balance at any time; as the loan balance is paid off, it becomes available to be borrowed again. A. revolving B. installment C. social D. nonrevolving credit

D

31. In all of the following situations, it might make better sense to undertake a part-time business EXCEPT when A. there is a narrow window of opportunity. B. you lack the resources for a full-scale business. C. you want to gain basic experience. D. you are buying an existing business.

B

32. In organizing your part-time small business start-up, which of the following is NOT a key consideration? A. Cost to start-up B. Competition C. Time to start-up D. Permanence

B

32. Often the only competitive advantage for a "me-too" start-up is the A. finance. B. location. C. marketing. D. subsidy.

D

33. The specific concept that leads to a start-up business usually comes from the _____ of the person starting the business. A. credentials B. interests C. education D. experience

B

33. Which of the following statements about the key considerations for part-time small business start-ups is false? A. You want a low cost of start-up, since you probably will not have a lot of money to invest. B. The more time and energy you spend preparing for a small-scale part-time business, the shorter it takes to make a profit. C. In most cases, the cost to start-up and the time to market are closely related. D. The fundamental idea of permanence is that customers want to know if the firm is likely to be around for awhile, to provide customer service and future sales.

A

34. Research into the indicators of successful start-ups shows that one of the best predictors of success is A. the level of experience of the founders. B. suggestions from friends and associates. C. random events. D. specific education courses.

D

34. Which of the following U.S. industries had the most number of establishments in 2007? A. Manufacturing B. Wholesale C. Construction D. Professional services

C

35. All of the following are reasons for the large numbers of home-based businesses in the United States EXCEPT A. the idea that a customer knows where the entrepreneur lives can be a point in favor of trusting in the potential permanence of the firm. B. it is inexpensive, since you are already living somewhere. C. they generally give customers the strongest sense of legitimacy. D. you can get your business going where you live in a moment.

D

35. Doing all of the following things has been shown to be the most effective route to success EXCEPT A. starting a business in a business incubator. B. securing outside investment. C. taking part in a mentoring program. D. starting with one founder.

A

36. A _____ is an organization that provides financial, technical, and managerial help to start-up businesses. A. business incubator B. trade association C. venture capital firm D. consultancy

D

36. Government specifications for acceptable use of land and buildings in particular areas are called A. licensing laws. B. public utility laws. C. environmental laws. D. zoning laws.

A

37. What is the greatest problem that home-based entrepreneurs face? A. Zoning challenges B. Gaining customers C. Insurance problems D. Delivering work

A

37. Which of the following statements about business incubators is false? A. Incubator participants have individual office services, such as telephone answering, and production and copying of documents. B. They provide access to angel investors, public grants for seed money, and technology support. C. They are created to strengthen the local economy by helping create jobs through the establishment of successful small businesses. D. They aid in the commercialization of new technologies, the revitalization of distressed neighborhoods, and the creation of wealth.

A

38. In _____, executive volunteers contribute their time and energy in assisting start-up and struggling small businesses as a public service. A. mentoring programs B. trade associations C. business incubators D. franchising

B

38. The limitations imposed on your property by your neighborhood group are known as A. pacts. B. covenants. C. volatilities. D. aggrandizements.

C

39. Permission from a government organization to act differently than the laws state is known as A. a covenant. B. volatility. C. variance. D. bootstrapping.

A

39. The _____ phase is usually the most difficult time you will have in business. A. start-up B. work C. growth D. completion

D

40. An Internet site designed to introduce and explain a business to others is known as a(n) A. e-commerce Web site. B. portal Web site. C. advocacy Web site. D. informational Web site.

A

40. When a small business start-up secures outside investment, one thing it accomplishes is that A. the business is critically examined by outsiders. B. it brings the synergy from multiple founders. C. the business produces a product or service for which there is a proven demand. D. the founders take part in the mentoring program.

B

41. A combination in which the whole is greater than the sum of its component parts refers to A. revolving credit. B. synergy. C. microinventory. D. spin-off.

B

41. Products like music and cell phones are examples of the kind of goods we buy as individuals. This type of e-commerce is called A. business-to-business (B2B). B. business-to-consumer (B2C). C. consumer-to-consumer (C2C). D. business-to-Internet (B2I).

C

42. Having multiple founders at a start-up is a key success indicator for all of the following EXCEPT A. providing a forum for examining ideas. B. evaluating information. C. dividing up the business risks and rewards. D. making good business decisions.

A

42. In _____ sales, one firm sells to another firm. A. business-to-business (B2B). B. business-to-consumer (B2C). C. consumer-to-consumer (C2C). D. business-to-Internet (B2I).

D

43. Identify the correct statement about B2B. A. For most of us, the B2B market is visible. B. An example of a B2B transaction would be an individual buying a cell phone. C. It involves electronically-facilitated transactions between consumers through a third party. D. B2B e-commerce is larger than B2C e-commerce.

A

43. The amount by which sales prices exceed product costs refers to A. high margins. B. synergy. C. spin-off. D. asset.

D

44. Identify the correct statement about a hosting package. A. It should include at least 1 terabyte of traffic a month. B. It should give you at least five Web pages of space to tell your story. C. It should include at least two e-mail accounts using your domain name. D. It should include an online Web site editor so you can make changes to your site without buying Web-authoring software.

B

44. The single greatest hurdle to a successful start-up is A. obtaining and maintaining mentoring relationships. B. obtaining and maintaining sufficient cash. C. hiring and retaining qualified employees. D. procuring enough inventory for sale.

A

45. A Web page in which entries are posted in reverse chronological order is a A. blog. B. tweet. C. search engine. D. push service.

D

45. You can go about obtaining committed customers prior to start-up via all of the following ways EXCEPT A. starting a spin-off from your employer's business. B. competing with your employer. C. subcontracting services to your employer. D. getting your employer's business into an incubator.

C

46. A business that is created by separating parts of an operating business into a separate entity is called a A. synergy. B. franchise. C. spin-off. D. turnkey.

B

46. Identify the correct statement about RSS feeds. A. All Web sites push content out to customers by using an RSS feed. B. An RSS feed sends whatever Web material you specify to subscribers to that feed. C. RSS stands for "really simple sequence." D. RSS feeds can be read only with special readers.

B

47. A listed, live connection to a different Web site, which in turn displays a similar link to the first Web site is a(n) A. sponsored link. B. reciprocal link. C. backlink. D. incoming link.

A

47. All of the following holds true of creating spin-offs in businesses EXCEPT A. it is a regular business practice that is done by big businesses at the initial stages of business development. B. they are created to get rid of "noncore" activities. C. it is a business that is created by separating part of an operating business into a separate entity. D. some of them are created when the parent lacks either the interest or the resources to pursue the opportunity.

A

48. Identify the correct statement about the eBay Web site. A. The eBay method of auctioning means you pay a fee for posting your product and a sales fee based on the final bid price when the item sells. B. Most online transactions use a credit card or an online payment system like PayMate, which is a division of eBay. C. eBay does not allow buyers and sellers anonymity. D. On eBay, you can list a single item for sale only by creating a Web site to support your effort.

C

48. In which way will working with a partner reduce the risk of a start-up? A. Banks prefer partnered start-ups. B. Federal government provides subsidies to partnering situations. C. Partners may provide capital, equipment, or advice. D. Partners eliminate the need to hire other employees.

C

49. The party and door-to-door model represents which of the following part-time business approaches? A. Stand retailing B. Consignment C. Home retail D. Mail order

C

49. Which of the following statements about home-based businesses is true? A. Having a business based at home increases the cash flow requirements of a start-up business. B. From around 1960 to 1980, home-based businesses largely fell out of favor. C. Because of the proximity of the business to the living area, no time is spent commuting between home and office. D. The U.S. Small Business Administration estimates that 93 percent of all businesses are home-based, putting the number at around 15 million firms.

A

50. Which of the following is also called multilevel marketing? A. Network marketing B. Auctioning C. Catalog sales D. Online marketing

B

50. Which of the following is an advantage of buying an existing business? A. It is easy to find an appropriate existing business for sale given the technology today. B. Purchasing a business often requires less cash outlay than for creating a start-up. C. Existing managers and employees embrace change due to continuing operations that provide job security. D. New technology needs are eliminated.

D

51. Which of the following is a disadvantage of purchasing an existing business? A. Established customers leaving due to change. B. Existing business processes being difficult to change. C. Purchasing a business being significantly more expensive than a start-up. D. Existing managers and employees resisting change.

D

51. _____ means getting the customer to agree to buy. A. Opening B. Promoting C. Auctioning D. Closing

C

52. Identify the statement that does not relate to home retail. A. Low cost of setting up B. Ability to do the work away from your home and employer C. Provides a high steady income D. Minimized potential conflicts

C

52. Which of the following is an excellent way to find businesses for sale? A. Yellow pages B. Local community center C. Networking D. Universities

C

53. The process of investigating a business to determine its value is called A. synergy. B. spin-off. C. due diligence. D. heuristics.

D

53. Which of the following is NOT an advantage of home businesses? A. Speed and ease of setting up. B. Low cost of getting started. C. Ability to do the work away from your home and employer. D. Always working "on the road" thereby enhancing productivity.

D

54. Identify the statement that is not a part of the steps which make up the process of due diligence. A. Conducting extensive interviews with the sellers of the business. B. Making a personal examination of the site (or sites) of the business. C. Interviewing customers and suppliers of the business. D. Developing a brief business plan for the acquisition.

d

A _____ is a legal agreement granting you rights to use a particular piece of intellectual property. A. caveat emptor B. franchise C. set-aside D. license

d

A feature that allows your customers to order directly from a Web site rather than visiting your store is an example of A. elimination. B. adaptation. C. magnification. D. substitution.

d

A special set of observational and thinking skills that help entrepreneurs identify good opportunities refers to A. innovation. B. opportunity recognition. C. technology transfer. D. entrepreneurial alertness.

a

According to the PSED, a majority of entrepreneurs indicated that A. the decision to start a business came first. B. the business idea came first. C. both idea and decision were simultaneous. D. they have no recollection of what happened with business start-up

d

According to the entrepreneurs studied in PSED, which of the following factors was the most frequently mentioned source that led to their business idea? A. Discussion with potential investors B. Education and expertise C. Family and friends D. Work experience

b

According to the text, all of the following factors lead business owners to their business ideas EXCEPT A. work experience. B. government regulation. C. serendipity. D. family and friends.

d

All of the following pertain to entrepreneurial alertness EXCEPT A. entrepreneurs have a special set of observational skills. B. entrepreneurs have thinking skills that help them identify opportunities. C. it is the ability to notice things that have been overlooked. D. it involves launching a formal search for opportunities

d

If an owner of a fast-food restaurant notices that customers are asking for substitutions of healthier ingredients to food items, she may be motivated to contact her suppliers to ask about getting new ingredients, changing the menu, and increasing the healthy offerings on the menu to keep customers satisfied. This is an example of A. creativity. B. technology transfer. C. innovation. D. entrepreneurial alertness.

a

Looking at the concept of "Book-of-the-Week" from Borders, if Olive Garden starts a "Pasta-of-the-Week", it would be an example of which element of SCAMPER? A. Adapt B. Magnify C. Combine D. Substitute

c

Many owners of consulting companies took their own skills and launched businesses by selling those skills to other companies who needed them. This is an example of which of the following factors leading to business ideas? A. Family and friends B. Serendipity C. Education and expertise D. Personal interest

d

One powerful but rarely used source of ideas is A. family and friends. B. work experiences. C. existing customers. D. government agencies.

a

Researchers in the field of entrepreneurship and small business believe that _____ behavior is the most basic and important entrepreneurial behavior. A. opportunity recognition B. idea networking C. observational D. question-seeking

b

The firm that obtains the rights to use a particular piece of intellectual property is the A. licensor. B. licensee. C. obligor. D. assignor.

d

The idea trigger "What separate products, services, or whole businesses can you put together to create another distinct business?" pertains to which cue in SCAMPER? A. Substitute B. Magnify C. Adapt D. Combine

c

The person or organization which is offering the rights to use a particular piece of intellectual property is the A. consignee. B. assignee. C. licensor. D. licensee.

c

This question looks at the specific individuals, groups, or organizations you would approach first to buy your product or service. A. Who are the people behind the idea? B. Describe how you create value for your customers. C. How would you define the best initial set of customers? D. What marketplace need does your product address better than any other option?

c

When a bookstore starts to sell videos, music, and coffee as well, they are using which element of SCAMPER? A. Rearrange B. Eliminate C. Combine D. Substitute

d

When people find a way to turn their hobbies into successful businesses, which of the following factors is considered as leading them to their business idea? A. Family and friends B. Education and expertise C. Serendipity D. Personal interest

c

When you happen to be at the right place at the right time resulting in a successful business idea, which of the following factors can be said to be responsible? A. Family and friends B. Education and expertise C. Serendipity D. Personal interest

c

Which of the following best describes a licensee? A. It is a person or organization offering the rights to use a particular piece of intellectual property. B. It is a legal agreement granting rights to use a particular piece of intellectual property. C. It is a person or firm obtaining the rights to use a particular piece of intellectual property. D. It is a person or organization offering the rights to use any piece of intellectual property.

a

Which of the following is NOT a focus while answering the eight questions in a typical I 2 P analysis? A. People B. Product C. Market D. Intellectual property protection

a

Which of the following is an idea trigger for the "substitute" cue in SCAMPER? A. What opportunities can you think of that come as a result of replacing something that already exists? B. What separate products, services, or whole businesses can you put together to create another distinct business? C. What could you adapt from other industries or fields to your business? D. What could I make more noticeable or dramatic, or different in some way from my competitors?

d

Which of the following looks like the simplest question but is actually the hardest one? A. Is your underlying technology unique? B. Who will buy your product? C. What is your product or idea? D. What is the market and its size?

c

Which of the following refers to searching and capturing new ideas that lead to business opportunities? A. Innovation B. Entrepreneurial alertness C. Opportunity recognition D. Technology transfer

b

Which popular innovation strategy can be just as effective and much more likely in the real world, than business opportunities that result from radical innovations? A. Magnifying B. Adapting C. Eliminating D. Rearranging

c

Working for a very large organization in the tractor manufacturing industry, John always heard complaints from customers about the parts and service aspect of the business. Taking an early retirement, John started his small business to address the customer complaints he had been hearing. Which of the following best describes the factor that led John to this business idea? A. A similar business B. Chance C. Work experience D. Family and friends

c

You might see a business in an area that intrigues you because you learn that there is a growing market for this business and you think of a way to expand on the opportunity. Which of the following factors is considered the business idea behind this? A. Serendipity B. Personal interest C. A similar business D. Work experience

b

_____ is a process of producing an idea or opportunity that is novel and useful, frequently delivered from making connections among distinct ideas or opportunities. A. Ethics B. Creativity C. Imitation D. Flexibility