Exam #1 Entr 187

There are only a few good business models available for the new entrepreneur

FALSE

There are two key groups outside one's business with which one must deal—customers and investors.

FALSE

With over 8.3 million businesses owned by women, they account for a quarter of small business revenue nationally.

FALSE

It can take 3000 ideas to yield one commercially viable product. To increase the odds of finding a good idea, the screening process takes all the thoughts from the ______ step of the entrepreneurial process, and puts them through a ______.

"Feel"; "Check"

After being in business for 24 months, Paul's auto spare parts company Chromson Inc. grows to a relatively stable size. Which of the following would be Paul's primary financial management need at this stage?

Building owner's wealth

When a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth.

FALSE

The _____ of an organization will be a part of its task environment.

competitors

Josh, an electronics retailer, noticed that the e-commerce business was booming. He started an online shopping website to take advantage of this surge in business. As a result, his business attracted more customers from all across the country. This reflects Josh's:

entrepreneurial alertness.

According to the U.S. Small Business Administration, small businesses generate _____ times the number of patents per employee than do big businesses.

16

Which of the following is a difference between a small business and a high-growth venture?

A small business grows when necessary, whereas a high-growth venture grows when possible.

_____ refers to a situation when what is best for one's part-time business is different from what is best for his or her full-time employer.

Conflict of interest

Which of the following is an example of part-time business?

Dorothy, who works in her small bakery for less than 30 hours a week

_____ are considered as a part of the internal environment of a firm.

Employees

_____ is a special set of observational and thinking skills that help entrepreneurs identify good opportunities.

Entrepreneurial alertness

_____ refers to the sum total of forces outside of an entrepreneur and a firm.

Environment

"S" in the creativity tool SCAMPER stands for summarize.

FALSE

As the owner of a business, quickly admitting that the firm is in trouble indicates a lack of accountability.

FALSE

Being a small business makes managing organizational culture harder than in larger businesses.

FALSE

Which of the following statements about certification with regard to women- or minority-owned small business is true?

For those businesses that qualify, certification provides a ready means of access to opportunity and to networks of businesses and government agencies.

_____ refers to the value of a business that exceeds the sum of the value of all individual assets but that cannot be sold separately from the business.

Goodwill

The two fastest growing minority groups that represent the largest segments of minority business owners are:

Hispanics and African Americans.

Which of the following is true of a small business?

It considers sales as more important than marketing.

Which of the following is true of a high-growth venture?

Its metastrategy is novelty.

Which of the following best describes conflict of interest?

Jenson misses his deadlines at his full-time day job because he works late nights as a part-time music producer.

Which of the following is one of the prime challenges faced by most second career entrepreneurs?

Keeping personal finances out of the business

Lisa runs a dog grooming business and is always looking for new trends, reading articles, keeping notes, and talking to customers and suppliers about what is needed in the industry. What important function is Lisa performing?

Lisa is scanning the environment.

Martin runs a successful house painting business. He runs his business out of his garage, which he converted into office space. Martin, who had previously worked as a house painter in another company had good knowledge of how to run a house-painting business. After a storm destroyed public properties in his neighboring town, he contracted with the mayor of that town to fulfill any painting jobs required during the town's reconstruction. In order to meet this demand and expand business, he hired more house painters. According to the BRIE model, which of the following is an example of Martin's opportunity competency?

Martin contracting with the mayor to help paint during reconstruction

Which of the following statements about entrepreneurial teams is true?

Most entrepreneurial teams are family related.

_____ refers to searching and capturing new ideas that lead to business opportunities.

Opportunity recognition

_____ measure a management's effectiveness in using the invested capital of the business to provide profits.

Return on investments

Which of the following challenges is typical to family businesses?

Role conflict and succession

Which of the following terms is not one of the four steps in the successful entrepreneurial process?

Seek.

The _____ is a U.S. government agency that helps people start a business and also provides them support and advocacy.

Small Business Administration

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has.

TRUE

Entrepreneurs get used to a do-it-yourself approach, which can be especially trying for second career entrepreneurs.

TRUE

In crafting a feasibility study, the goal is to assess if the idea can be profitably brought to market.

TRUE

In making moral decisions, it is possible to find oneself in the legal "right" but still unable to make a viable business decision by pursuing legal recourse.

TRUE

Intellectual property refers to original works like inventions, visual and performing art works, books, and computer programs.

TRUE

Most entrepreneurs start out working part time on their new business.

TRUE

Most small businesses—even part-time ones—need to have a website regardless of whether or not they use it for actual sales.

TRUE

One of the seven key strategies of the entrepreneurial way involves effectuation or an approach used to create alternatives in uncertain environments.

TRUE

One of the ways to determine the financial situation of a business is by crafting a business plan.

TRUE

One of the ways to practice the business of innovation is to invite someone who was never included before in a meeting for solving a problem.

TRUE

People who buy ownership rights but are not part of the management of the business are known as outside equity investors.

TRUE

Small businesses are often the first to try something innovative.

TRUE

Social networking helps build long-lasting relationships into a person's day-to-day business operations.

TRUE

Succession plans deal with the people who will take over, what roles they will fill, and what supports they will receive.

TRUE

The business model canvas and the classic feasibility study produce very different results.

TRUE

The majority of part-time businesses are based in the home.

TRUE

Which of the following is true with regard to minimalized business professionalization?

The entrepreneur does nearly everything in the simplest way possible.

Which of the following is true with regard to minorities in small businesses?

The establishment of both public and private funding and networking initiatives has helped to level the business playing field for minority entrepreneurs.

This stage of the business life cycle is characterized by a stable level of sales and profits over several years. The functional areas, the market, and the products or services are all being dealt with consistently and efficiently.

The resource maturity stage.

Which of the following stages of the business life cycle do most small business never go through?

The takeoff stage.

_____ are the smallest full-time business.

Traditional small businesses

Delegation makes sense in two situations. The first is when others can do things better than you. Which of the following is the second situation in which delegation makes sense?

When you want your business to operate when you are not present.

The RBI screen consists of asking yourself five questions to help you screen entrepreneurial ideas. Which of the following is NOT one of those five questions?

Who are your competitors?

The text defines an entrepreneur as:

a person who owns or starts an organization, such as a business.

The challenge of _____ refers to when woman or minority-owned businesses are simply excluded from the opportunities offered to firms owned by white males.

access

Attempting to make oneself seem more accomplished than reality is referred to as:

aggrandizing.

Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using _____.

bootstrapping

According to the BRIE model, _____ sets up a business as a firm.

boundary

Money contributed to businesses in return for part ownership of the business is called a(n) _____.

equity capital

The general description for the processes and skills used in the management of a firm's interactions with people, organizations, and institutions outside of its boundary is called _____.

external relations

Joe is planning a new mobile restaurant business. He wants to convert an antique bus into a sit-down restaurant with a service window allowing him to serve people within the bus and walk-ups who want to get their food and take it home. Joe is performing some research into his project and is looking at the overall business idea, the product/service, the industry and market, financial projections (profitability), and the plan for the future action. Joe is performing a(n) ___________.

feasibility study

Uncertainty of returns in a business is referred to as _____.

financial risk

Factors such as the ages, races, and gender of customers would be an element of the firm's _____ environment.

general

Small businesses are usually:

imitative in nature.

There are two general sources of gift financing:

institutional and personal.

The firm that obtains the rights to use a particular piece of intellectual property is referred to as the:

licensee.

Following the BRIE model in starting a business, an entrepreneur creates a boundary within the environment, setting his firm apart from the rest of the environment. In doing this, the entrepreneur gives the firm an _____.

organizational identity

Contracting with people or companies outside one's business to get work done for the business is known as:

outsourcing.

A business run by the individual who owns it is referred to as a(n) _____.

owner-managed firm

The amount that revenues exceed expenses is referred to as _____.

profit

A person's belief in his or her ability to achieve a goal is called:

self-efficacy.

The weighted average cost (WAC) refers to:

the expected average future cost of funds.

Tammy has just opened a donut shop called The Rabbit Hole. Given that The Rabbit Hole is in its start-up phase, which of these would be Tammy's immediate financial management need?

Conserving what little money the business has

In deciding whether to make the move from part-time to full time entrepreneurship, the key question is usually government regulations.

FALSE

In entrepreneurship, every good idea is a viable business opportunity.

FALSE

In family-owned businesses, the board of directors can only be comprised of family members.

FALSE

In innovation, it is mandatory for a person to be sure how a new idea is going to turn out.

FALSE

In order to make profits from a small business, the company needs to make an actual product.

FALSE

In the U.S., government programs are the number one source for financing small businesses.

FALSE

Most businesses run by teams are not family related.

FALSE

Research suggests that the first good idea entrepreneurs come up with is always the best.

FALSE

Taking an idea and offering a way to do something slightly better than it is done presently is an imitative strategy.

FALSE

The SCAMPER tool is effective for solving problems only in traditional ways.

FALSE

The goal of any small business owner is to manage external relations in order to minimize social capital.

FALSE

The majority of new firms go through similar startup processes with those most likely to be successful following a four-step process: Finance, Construct, Promote, Demonstrate.

FALSE

The text outlines five major pitfalls that business owners can become victim to when trying to become more innovative, but obeying nonexistent rules is not one of those pitfalls.

FALSE

Which of the following statements is true about the general environment?

It always needs to be considered in terms of its social supports and institutional supports

Jacob has started a graphic design company called Interon Graphics. As Interon Graphics moves into the growth phase, which of the following would be Jacob's dominant financial management need?

Obtaining increasing amounts of cash inflows

_____ refers to a set of shared beliefs, basic assumptions, or common, accepted ways of dealing with problems and challenges within a company that demonstrate how things get done.

Organizational culture

____ is money from selling part of a business to people who are not and will not be involved in the management of the business.

Outside equity

The majority of small business start-ups are funded by bootstrapping.

TRUE

The more time and energy one spends preparing for a part-time business, the longer it takes to make a profit.

TRUE

The most frequently occurring element of the BRIE model is intention.

TRUE

Using low-cost or free techniques to minimize cost of doing business is referred to as bootstrapping.

TRUE

When pursuing a part-time entrepreneurship, there are usually two major questions: What kind of product or service do you want to offer and how do you want to organize your part-time business

TRUE

Thomas has started a new business venture for which he has been using highly economical resources, such as the market research data available in public libraries, low-interest funds borrowed from national banks, and equipments hired on lease. This technique used by Thomas to overcome resource constraints in his start-up firm is best known as _____.

bootstrapping

The competency suggested by _____ relates to the organizational and business processes of a firm.

boundary