Hw 2 Ch 6

Necessity-based

entrepreneurship is one way for people, including women and minorities who have hit the "glass ceiling" in their careers or are otherwise cut off from other employment choices, to strike out on their own and gain economic independence. Classic Necessity-based Follow-through Serial Sustainable

Venture capitalism

facilitates making large investments in new ventures in return for an equity stake in the business. State-directed financing Entrepreneurial capitalism Venture capitalism Debt financing Oligarchic capitalism

startup

A(n) is a new and temporary venture that is trying to discover a profitable business model for future success. family business intrapreneurship startup business incubator acquisition

corporation

For liability purposes, a limited liability corporation functions like a and protects the assets of owners against claims made against the company. sole proprietor corporation general partnership limited partnership limited liability partnership

Ethical failure

Habib, who owns a popular restaurant, plans to expand his business. After reading favorable reviews, he decides to invest in an acquisition unaware that it is a dummy corporation. This fraud leads to significant financial losses for him, and he is forced to shut down his business. Which of the following is most likely to be the main reason for the failure of Habib's business? Lack of motivation Lack of strategy Lack of commitment Ethical failure Late entry into the business

Angel investor

Igor needed financing for his budding business, but was rejected by many financing companies. Finally, one of his uncle's friends, a wealthy man, got interested in the business and gave Igor a substantial amount for a share in the venture. Which of the following best represents Igor's source of finance? Initial public offering Revolving credit Debt financing Angel investor Loan shark

capital needs

In a business plan outline, detail the amount of funds needed to run the business, amount available, and amount requested from new sources. capital needs milestones performance needs liability needs capability needs

She is a necessity-based entrepreneur. She is a necessity-based entrepreneur.

Nadia is unemployment and is unable to pay her bills. She realizes she loves baking and soon opens up her own bakeshop with the help of a friend. Which of the following is true about Nadia? She is a necessity-based entrepreneur. She is a social entrepreneur. She is a venture capitalist. She is an intrapreneur. She is a serial entrepreneur.

Family business

Nailah had to quit her job to run her mother's bookstore when her mother passed away. The store was earning good profits and so she decided to open a new branch in another state. What kind of a business does Nailah own? Limited liability corporation Social enterprise Family business Corporation Necessity-based enterprise

business

A(n) necessarily has 500 or fewer employees, is independently owned and operated, and does not dominate its industry. small business social organization non-profit organization classic entrepreneurship Internet entrepreneurship

succession

A(n) plan describes how the leadership transition and related financial matters will be handled when the time for changeover arrives. partnership startup succession liability equity

business

A(n) plan describes the direction for a new business and the financing needed to operate it. succession business structural operational feasibility

succession problem

A(n) refers to the issue of who will run the business when the current head leaves. family business integration family business feud family disagreement succession problem role confusion

entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.

According to the life cycle of entrepreneurial firms, the birth stage signifies the stage in which the: entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.

business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly.

According to the life cycle of entrepreneurial firms, the breakthrough stage signifies the stage in which the: entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability. entrepreneur faces the continuing management challenge of remaining competitive in a changing environment. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace.

entrepreneur experiences the advantages of market success and financial stability while facing the continuing management challenge of remaining competitive in a changing environment.

According to the life cycle of entrepreneurial firms, the maturity stage signifies the stage in which the: entrepreneur struggles to get the new venture established and survive long enough to test the viability of the underlying business model in the marketplace. business model begins to work well, growth is experienced, and the complexity of managing the business operation expands significantly. entrepreneur recognizes a niche in the market and formulates an idea to take advantage of it. entrepreneur experiences the advantages of market success and financial stability while facing the continuing management challenge of remaining competitive in a changing environment. entrepreneur formulates a plan for making a profit by generating revenues that are greater than the costs of doing business.

Poor financial control

Aisha has been successfully running a salon for over a year. She decided to use her profits and expand her business by selling her homemade organic hair care products. This involved miscellaneous costs that exhausted her funds, and she had to file for bankruptcy. Which of the following is most likely the main reason for Aisha's failure? Lack of commitment Poor financial control Ethical failure Late entry into the business Lack of motivation

succession

Ali, a small business owner, is concerned about passing the business to his heirs after his retirement or death. He should prepare a formal _ plan. retirement contingency business succession liquidation franchising

lack of business expertise.

New small business startups often fail because of: lack of business expertise. strict financial controls. high ethical standards. slow growth. strategic leadership.

Succession problem

Toby and William are both general managers at Alton & Sons, their father's business. After a heart attack, their father decides to retire. He is faced with the challenge of choosing between one of his two equally capable sons to replace him in the business. Which type of problem related to family businesses is the father facing? Family business integration Succession problem Family disagreement Role confusion Family business feud

Lack of expertise

implies that a business owner does not have the skill-sets required in the essentials of business operations, including finance, purchasing, selling, or production. Lack of experience. Insufficient financing Lack of expertise Ethical failure Growing too fast

Equity financing

involves giving ownership shares in the business to outside investors in return for their cash investments. Debt consolidation Equity financing Debt financing Securitization Risk management

Debt financing

involves going into debt by borrowing money from another person, bank, or financial institution. Debt financing Risk management Securitization Debt consolidation Equity financing

Entrepreneurial

leadership brings the venture into being and sees it through the early stages of an enterprise. Transactional Entrepreneurial Bureaucratic Transformational Democratic

Strategic

leadership manages and leads the venture into maturity as an ever-evolving and still- growing enterprise. Strategic Entrepreneurial Bureaucratic Transformational Democratic

Business incubators

offer space, shared services, and advice to help get small businesses started. Business councilors Business incubators Succession plans Social advisors Internet entrepreneurships

limited partnership

"Sheng's Designs" is an architectural firm owned by four investors but Sheng is the only one who handles the day-to-day business management of the firm. They share their profits, but their losses are restricted to the amount invested by each. This is an example of a limited partnership general partnership corporation limited liability corporation sole proprietorship

limited liability partnership

A , common among professionals such as accountants and attorneys, limits the liability of one partner for the negligence of another. general partnership sole proprietorship limited partnership limited liability corporation limited liability partnership

plan for making a profit by generating revenues that are greater than costs.

A business model is a: plan that describes the organizational structure of the company. plan for making a profit by generating revenues that are greater than costs. plan to determine the strengths and viability of a company's organizational structure. model that depicts the detail of an organization's workflow. model that lists the details of all the employees of an organization.

classic

A entrepreneur is a risk-taking individual who takes action to pursue opportunities others fail to recognize, or even view as problems or threats A. serial B. classic C. follow-through D. sustainer E. social

being the first to exploit a niche or enter a market.

A first-mover advantage comes from: making improvements to existing product lines. being the first to exploit a niche or enter a market. being the first to take a free-ride on the opportunity created by a pioneer. the ability to poach trained personnel from an established business. taking risks while strategizing to improve an existing market.

franchise

A is a business in which the owner of a business sells to another the right to operate the same business in another location. non-profit organization franchise joint venture family business wholly-owned subsidiary

What is a corporation? What advantages does a corporate form offer? Does a corporation have to file an "S1" registration statement? (Word Limit: 100 Words). (5 points)

Answer: A corporation, commonly identified by the "Inc." designation in a name, is a legal entity that is chartered by the state and exists separately from its owners. The corporation can be for-profit, such as Microsoft, Inc., or nonprofit, such as Count-Me-In, Inc.—a firm featured early in the chapter for helping women entrepreneurs get started with small loans. The corporate form offers two major advantages: (1) It grants the organization certain legal rights (e.g., to engage in contracts), and (2) the corporation becomes responsible for its own liabilities. This separates the owners from personal liability and gives the firm a life of its own that can extend beyond that of its owners. Yes, a corporation has to file an "S1" registration statement.

It was discussed in class whether a Non-profit Organizations were Taxed or not. Explain where a Non-profit Organization may be responsible for Taxes, and which Taxes. How does the IRS determine whether a Non-profit Organization is Taxed or not? (word limit: 200 words). (16 points)

Answer: Non-profit organizations do not aim to gain any form of commercial or monetary profit and mostly operate for philanthropic or environmental purposes. They are eligible for state sales, property, and income tax exemptions. However, they are not exempted from federal income tax. To be exempt from federal income tax, the organization must apply for exemption under section 501(c)(3) of the Internal Revenue Service tax code (within 27 months after the end of the month in which it was created) which is applicable to non-profit organizations that operate for charitable, educational, scientific, or religious purposes. While non-profit organizations may avail other tax exemption benefits, they are obliged to pay employee taxes.

Explain the different types of partnerships. (Word limit: 100 Words) (5 points)

Answer: The simplest and most common form is a general partnership where the partners share management responsibilities. A limited partnership consists of a general partner and one or more "limited" partners who do not participate in day-to-day business management. They share in the profits, but their losses are limited to the amount of their investment. A limited liability partnership, common among professionals such as accountants and attorneys, limits the liability of one partner for the negligence of another.

sole proprietorship

Arianne has a passion for designing clothes and decides to open her own clothing store. She starts it by taking personal loans from family and friends, and hires a few people to run the store She maintains a tight control over costs as she does not want to incur further debts. Arianne's store is an example of a . sole proprietorship corporation limited liability partnership general partnership limited liability corporation

Internal locus of control

Arthur, a young college graduate, started a store for traditional musical instruments. He liked working independently and without being directed by others. He believed that his destiny is under his own control. Which of the following personality traits of an entrepreneur is exhibited by Arthur? Internal locus of control High energy level High need for achievement Tolerance for ambiguity Flexibility

social entrepreneurship

Barbara, a florist, realized the need for easily accessible organic compost in her neighborhood. Her neighborhood consists mainly of senior citizens who are unable to procure their own gardening supplies. She quickly established "We Compost," a non-profit organization that delivers compost to each household in her neighborhood. This is an example of . serial entrepreneurship classic entrepreneurship intrapreneurship necessity-based entrepreneurship social entrepreneurship

business plan

Before starting on his new venture, Mike writes down the specifics of his ideas, the amount of money needed, and future business operations. Mike is involved in preparing a . succession plan business portfolio business plan competitive analysis mission statement

Social entrepreneurship

Colin and Becky started a garbage disposal and recycling program called "No More Trash" in their city, which has seen enormous growth in the last few years. The public waste management system has proved to be a failure as the authorities are overwhelmed by the influx of people from all parts of the country. Which of the following kinds of entrepreneurship is "No More Trash" an example of? Serial entrepreneurship Necessity-based entrepreneurship Intrapreneurship Internet entrepreneurship Social entrepreneurship

Lack of experience

Daphne decided to open her first store in Dallas. Being new to the business, she was unable to cope with the demands of running her store, and after several bad decisions, she finally had to shut it down. What was most likely the main reason for the failure of Daphne's business? Lack of experience Insufficient financing Lack of commitment Ethical failure Growing too fast

Necessity-based entrepreneurship

Wendy, a single parent of two boys, has started a small bakery in her house. She cannot work away from home because her children are very young. Which of the following kinds of entrepreneurship is this an example of? Serial entrepreneurship Necessity-based entrepreneurship Intrapreneurship Internet entrepreneurship Social entrepreneurship

partnership

Emma, Heidi, and Hilda have opened a new cafe. Each of them have contributed $1,500 toward start-up costs and have agreed on dividing costs and profits equally. The legal structure for the company can best be described as a: proprietorship. partnership. trade alliance. corporation. benefit corporation.

thrive on performance feedback.

Entrepreneurs: do not like situations with high degree of uncertainty. thrive on performance feedback. have an external locus of control. are unwilling to admit problems and errors. do not like autonomy.

general partnership

Erik and Elsa own a pet grooming business. Erik manages the financial responsibilities while Elsa manages the customers. This is an example of a . sole proprietorship general partnership corporation limited liability partnership limited liability corporation

details of the product characteristics, distribution, promotion, pricing, and market research.

In a business plan outline, the marketing strategy contains the: description of the size of market, competitor strengths and weaknesses, and five-year sales goals. overview of the business purpose and the business model for making money. description of the management and staffing skills needed and available, compensation, and human resource systems. details of the product characteristics, distribution, promotion, pricing, and market research. description of cash flow projections for one to five years, breakeven points, and phased investment capital.

manufacturing or service methods, supplies and suppliers, and control procedures used.

In a business plan outline, the operations description contains the: description of cash flow projections for one to five years, breakeven points, and phased investment capital. details of the product characteristics, distribution, promotion, pricing, and market research. manufacturing or service methods, supplies and suppliers, and control procedures used. description of the management and staffing skills needed and available, compensation, and human resource systems. overview of the business purpose and the business model for making money.

financial projection

In a business plan outline, the provides details of cash flow estimate for one to five years, break-even points, and phased investment capital. staffing description financial projection capital need milestones operations description

executive summary

In a business plan, the overview of the business purpose and the business model for making money is contained in the . market strategy market description company description industry analysis executive summary

company description

In a standard business plan, an organization's mission, ownership details, and, legal forms are listed under . market strategy executive summary company description industry analysis staffing description

a family business feud

In family businesses, refers to the problem that arises when members of the family have major disagreements over how the business should be run. budget deficit debt financing an ethical dilemma a reverse culture shock a family business feud

partnership

In the context of business ownerships, a is established when two or more people agree to contribute resources to start and operate a business together. corporation limited liability corporation partnership social enterprise business incubator

not having enough money available to maintain operations while still building the business and gaining access to customers and markets.

Insufficient financing implies: not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth. not having enough money available to maintain operations while still building the business and gaining access to customers and markets. not having expertise in the essentials of business operations, including finance. not keeping track of the numbers, and failure to keep business finances to best advantage. not making the best use of existing monies.

sole proprietorship

Joe has started his one-man audio consulting business under the name Sound Wiz. The legal structure for the company can best be described as a . sole proprietorship partnership trade alliance corporation benefit corporation

birth stage.

Julia is an entrepreneur. At the current stage in which her company is stated, her main concerns are if she will have enough customers and money. Julia's company is in the: birth stage. breakthrough stage. maturity stage. stagnant stage. failure stage.

Debt financing

Karl takes a loan from a reputed bank to set up a recording studio. Which of the following best represents Karl's source of finance? Initial public offering Revolving credit Debt financing Angel investment Venture capital financing

aim to keep operations as simple as possible.

Lean startups: aim to create a sophisticated product with a big budget. focus on increasing their acquisitions. establish a complex and detailed work structure. aim to keep operations as simple as possible. focus on making lives better for underserved populations.

Angel investors

are wealthy individuals willing to invest in a new venture in return for an equity stake. Limited liability partners Sole proprietors General partners Debt financers Angel investors

take risks and create enterprises whose missions is to help make lives better for underserved populations.

Social entrepreneurs: take risks and create enterprises whose missions is to help make lives better for underserved populations. bring buyers and sellers together for online business transactions and take a percentage from the sales. are wealthy individuals willing to invest in a new venture in return for an equity stake. pursue innovations that can change the organization in significant ways. start new ventures because they have few or no other employment and career options.

not having sufficient know-how to run a business in the chosen market or geographical area.

Stating that the failure of a small business was due to "lack of experience" implies: not having expertise in the essentials of business operations, including finance, purchasing, selling, and production. not taking the time to craft a vision and mission, nor to formulate and properly implement a strategy. not keeping track of the numbers, and failure to control business finances and use existing monies to best advantage. not taking the time to consolidate a position, fine-tune the organization, and systematically meet the challenges of growth. not having sufficient know-how to run a business in the chosen market or geographical area.

increase the survival rates for new startups.

The goal of business incubators is to: ensure that established businesses retain their competitive advantage. aid third generation family businesses resolve family business feuds. formulate a succession plan for established family businesses. increase the survival rates for new startups. establish social enterprises.

serial

The main characteristic of entrepreneurs is that they start and run new ventures over and over again, moving from one interest and opportunity to the next. sustainer classic serial first-mover necessity-based

entrepreneurship

The term describes strategic thinking and risk-taking behavior that results in the creation of new opportunities. A. business planning B. partnership C. entrepreneurship D. proxemics E. franchising

an initial public offering

When shares of stock are first sold to the public and begin trading on a stock exchange, it is referred to as . venture capitalism equity financing angel investing an initial public offering an Internet entrepreneurship

Not devoting enough time to the requirements of running a competitive business

Which of the following best describes lack of commitment? Not having enough funding to maintain operations while still building the business and gaining access to customers and markets Not having sufficient know-how to run a business in the chosen market or geographical area Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production Falling prey to the temptations of fraud, deception, and embezzlement Not devoting enough time to the requirements of running a competitive business

Not taking the time to craft a vision and mission, nor to formulate and properly implement a plan

Which of the following best describes lack of strategy and strategic leadership? Not taking the time to craft a vision and mission, nor to formulate and properly implement a plan Not having enough funding to maintain operations while still building the business and gaining access to customers and markets Not having sufficient know-how to run a business in the chosen market or geographical area Falling prey to the temptations of fraud, deception, and embezzlement Not having expertise in the essentials of business operations, including finance, purchasing, selling, and production

The corporation becomes responsible for its own liabilities.

Which of the following characteristics of a corporation gives it a life of its own that can extend beyond that of its owners? It grants the organization certain legal rights. It is a legal entity that is chartered by the state. The cost for incorporating a corporation is very high. The corporation becomes responsible for its own liabilities. Incorporated businesses require complex documentation.

Sole proprietorship

Which of the following forms of ownership holds the business owner personally liable for business debts and claims? Sole proprietorship Corporation Limited liability partnership General partnership Limited liability corporation

It exists separately from its owners.

Which of the following is true about a corporation? It combines the advantages of the other forms—sole proprietorship, partnership, and limited liability corporation. Only a for-profit business can be registered as a corporation. It exists separately from its owners. For tax purposes, it functions as a partnership. For liability purposes, it functions as a partnership.

The franchise parent receives a flat fee from the franchisee.

Which of the following is true about a franchise? It is one of the least common ways to get involved in a business. It runs under the franchisee's name and guidance. The franchise parent receives a flat fee from the franchisee. It makes use of things like opensource software, while containing costs, staying small, and keeping operations as simple as possible. It refers to a business in which material or goods are given to another person, but ownership is retained until the goods are sold.

They start and run businesses and nonprofits over and over again, moving from one interest and opportunity to the next.

Which of the following is true about serial entrepreneurs? They are born, not made. They pursue innovations within the company that can change the organization in significant ways. They make large investments in new ventures in return for an equity stake in the business. They start and run businesses and nonprofits over and over again, moving from one interest and opportunity to the next. They are primarily responsible for selling of shares of stock to the public at large.

For tax purposes, it functions as a sole proprietorship in the case of a single owner.

Which of the following is true of a limited liability corporation? It is commonly identified by the "Inc." designation in a name. It consists of a general partner and one or more "limited" partners who do not participate in day-to-day business management. The business owner is personally liable for business debts and claims. For tax purposes, it functions as a sole proprietorship in the case of a single owner. It involves the owners going into debt by borrowing money from another person, bank, or financial institution.

They have a high need for achievement.

Which of the following is true of entrepreneurs? They believe that their destiny is beyond their control. They like to avoid risk. They have a high need for achievement. They are averse to autonomy. They have a low tolerance for ambiguity.

They are supported by the U.S. Small Business Administration.

Which of the following is true of small business development centers? They concentrate on establishing social enterprises. They exclusively support all non-profit organizations in the U.S. They are supported by the U.S. Small Business Administration. They offer guidance to entrepreneurs trying to invest in acquisitions. They aid in the development of public sectors.

Karl's decision to expand his private firm overseas despite the risk of facing cultural differences

Which of the following scenarios demonstrates an entrepreneur who has a tolerance for ambiguity? Jean's decision to modify a pre-existing problem-tackling strategy in his private firm Roger's decision to hire an experienced manager to head his new branch in another state Karl's decision to expand his private firm overseas despite the risk of facing cultural differences Sasha's decision to quit her job to enter into a partnership with a well-recognized firm Giselle's decision to join her family's well-established business

necessity-based entrepreneurship

Yvette has recently lost her job and has not been able to find employment elsewhere. She has to support her children, and take care of her mortgage. She realizes a niche for chemical-free house cleaning services. Eventually she opens her own house cleaning service. This is an example of . classic entrepreneurship serial entrepreneurship intrapreneurship necessity-based entrepreneurship social entrepreneurship

Necessity-based entrepreneurship

takes place because other employment options don't exist. Classic entrepreneurship Serial entrepreneurship Intrapreneurship An initial public offering Necessity-based entrepreneurship