MGST Chapter 6

true

An advantage of a small manufacturer over a large manufacturer is the speed with which new products can be introduced to the marketplace. Question options: True False

False

An entrepreneur is the same as a small-business owner. Question options: False True

False

Any company that has fewer than 15 employees is considered to be a small business—no matter who or what owns the company. Question options: False True

False

Because large businesses are more efficient than small ones, they can keep total costs down and make larger profits. Question options: False True

an entrepreneur

David Dworkin is the founder and owner of Swoozie's, a chain of stores that carry diverse lines of wrapping paper, stationery, invitations, and gifts for affluent women. He opened the business with his own money and that of investors who saw profit potential in his idea. Dworkin is an example of which of the following? Question options: a franchisor a venture capitalist a franchisee an entrepreneur

growth-oriented entrepreneur

David Dworkin is the founder and owner of Swoozie's, a chain of stores that carry eclectic lines of wrapping paper, stationery, invitations, and gifts for affluent women. He is a classic entrepreneur who envisions having stores across the United States and Canada. Which of the following type of entrepreneurs best describes David? Question options: a) growth-oriented entrepreneur b) intrapreneur c) multipreneur d) interpreneur

True

Direct Business Development Bank of Canada (BDC) loans are made from funds set aside each year by Parliament. Question options: False True

being her own boss

Edie Lopez is opening a catering business because, as an entrepreneur, she will enjoy which of the following? Question options: guaranteed profits being her own boss shorter work hours interest-free loans

True

Entrepreneurs are less likely to accept the status quo and generally take a longer-term view than small-business owners. Question options: True False

venture capital

Which of the following is financing obtained from investment companies that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money? Question options: equity financing entrepreneurial capital venture capital debt financing

challenge of building a business

Which of the following is the most common motive for becoming an entrepreneur? Question options: challenge of building a business less risk because you are the boss financial dependence dissatisfaction with your current job

to persuade lenders and investors to finance the venture

Which of the following is the most common use of business plans? Question options: to persuade lenders and investors to finance the venture to comply with the Ontario Securities Commission to persuade customers to buy the new product or service to use as a recruitment tool

the owner's personal savings

Which of the following is the primary source of financing for all small business start-ups? Question options: the owner's personal savings supplier and customer credit banks the Business Development Bank of Canada

personal satisfaction

Dakota Lynn Brown is opening a business in which she will sell educational materials to parents who are home schooling their children. As an entrepreneur, Brown will enjoy which of the following benefits? Question options: guaranteed profits shorter work hours personal satisfaction less stress

a business plan

Estes Kennedy has decided that he will open a used bookstore as a sole proprietorship. His next step is to write which of the following before he applies for a business loan? Question options: a venture prospectus a business plan a business essay a market perspective

They will spend money to make their lives more comfortable.

How are baby boomers expected to affect the economy in the future? Question options: They will have no noticeable effect. They will spend money to make their lives more comfortable. They will create a drag on the economy. Because they spend less, they will contribute to an economic decline.

They handle all aspects of exporting, for a percentage fee of the business.

How are export management companies characterized? Question options: a) They handle all aspects of exporting, for a percentage fee of the business. b) They form joint ventures with small exporting businesses. c) They work on flat fees per month. d) They do only consulting work.

a micropreneur

In 1984, Suzanne Pogell wanted to learn to sail, but she could find no one to teach her. She finally convinced someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship. Pogell started small and plans to stay small. Which type of entrepreneur is Suzanne? Question options: a micropreneur an interpreneur an intrapreneur a multipreneur

Are there any problems with the business?

In buying an existing business, the prospective buyer should ask questions about the operation of the business. Which of the following would be the most appropriate question to ask? Question options: How are you going to use the money you receive for the business? Are any of the employees creating problems? Who loaned you the initial investment? Are there any problems with the business?

False

It is not advisable for small businesses to use the services of CPAs and lawyers because most businesses are too small to afford the expense. Question options: a) False b) True

angel investors

Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. Early in the development of this high-growth company, Arnold and Bradford attracted a group of investors who provided them with money needed to acquire other Internet companies with similar missions. What is the investment group called? Question options: angel investors entrepreneurial capitalists equity entrepreneurs investment counsellors

equity

Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. Early in the development of this high-growth company, Arnold attracted a group of investors who provided him with which of the following type of financing? Question options: debt venture equity liquid

burdensome government regulations

Jerome Matthews is opening a small computer repair shop. Like other small-business owners, Matthews probably will experience which of the following? Question options: guaranteed profits short work hours burdensome government regulations interest-free loans

equity

Jim Lightsey sold stock to investors in order to finance his company, which will run an Internet auction for sports memorabilia. Lightsey used which type of financing? Question options: equity liquid venture debt

intrapreneur

Lachlan Stuart is employed by International Paper, a company that values his vision and creativity. To stay ahead in a very competitive industry, International Paper gives Stuart and his division almost complete autonomy to develop innovative and effective communications. Stuart is an example of which of the following type of entrepreneur? Question options: a) insourced entrepreneur b) multipreneur c) intrapreneur d) corporate entrepreneur

micropreneurs

Many classic entrepreneurs who start small and plan to keep their business small are described as which of the following? Question options: intrapreneurs multipreneurs micropreneurs interpreneurs

True

Many small businesses wishing to operate overseas use the services of export management companies. Question options: True False

an entrepreneur

Marc Adler is the owner of Macquarium, a multimillion-dollar communications company that does everything from video productions to creating websites to public relations campaigns. Adler began this company when he could not find anyone in Hollywood who was willing to let him get into the movie making business. Adler is an example of which of the following? Question options: a venture capitalist an entrepreneur a franchiser a capitalistic adventurer

They were outsourced.

Marc Adler is the owner of Macquarium, a multimillion-dollar communications company. Macquarium has done work for several large companies. Even though these companies could have prepared their videos and created their websites in-house, these tasks were handled in which of the following ways? Question options: They were supplied outside normal channels. They were autonomous productions. They were seen as conflicting with the mission statements of the companies. They were outsourced.

to choose a form of business organization

Mark Ghermizian had quit his job and was looking to start a small business so he could be his own boss. When he read that people spend up to 15 minutes every day staring at a bathroom stall door, he decided there was real advertising potential in toilet advertising. Since he has his idea, what is Ghermizian's next step? Question options: to create a name for his business to get financing for his new business to choose a form of business organization to determine if he has the right personality to run a business

visionary

Michael Bronner made a killing in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing company. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for postsecondary education and is extremely successful. Entrepreneur Bonner would likely be described as which of the following? Question options: a) dependent b) not committed c) visionary d) cautious

a multipreneur

Michael Bronner made a killing in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for postsecondary education. The 40-year-old Bronner will more than likely start at least one more new company before he retires. What type of entrepreneur is Bonner? Question options: a) a multipreneur b) an intrapreneur c) a growth entrepreneur d) an interpreneur

True

Most start-ups are in the high-technology sector. Question options: False True

False

Multipreneurs are businesspeople who have tried a succession of entrepreneurial start-ups without finding an area in which they could be successful. Question options: False True

to find the idea for his business

Once Keeler Monroe had decided he wanted to quit working as a tax preparer and go into some kind of business for himself, he did a self-assessment. What will his next step be? Question options: to create a business plan to determine where the funding will come from to find the idea for his business to look for customers

to find financing for the business

Once the business plan is finished, what is the next step? Question options: to find financing for the business to locate customers to create a promotional campaign to choose a business format

a) True

One of the biggest advantages that a small business has is a greater ability to serve specialized markets. Question options: a) True b) False

True

One of the most common reasons for business failures is lack of experience. Question options: True False

True

One of the reasons that there has been a dramatic increase in the number of small business start-ups is rapidly changing technology. Question options: True False

True

One of the reasons women start their own companies is a frustration with their current work environment. Question options: True False

debt

Pim Bouwman quit his lucrative job as a consultant to start a retail website that specializes in Dutch tulip bulbs. To fund his website, he borrowed money from his friends and relatives. In other words, he used which type of financing? Question options: venture liquid debt equity

classic

Pim Bouwman quit his lucrative job as a consultant to start a retail website that specializes in marketing Dutch tulip bulbs. He finds it very satisfying and believes that it will provide him with an adequate income. Bouwman is an example of which of type of entrepreneur? Question options: classic opportunistic growth-oriented risk-aversive

False

Retail stores are the most popular category of small businesses. Question options: False True

True

Small businesses tend to have greater flexibility than large businesses. Question options: True False

intrapreneurs

Some entrepreneurs apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own. They enjoy a high degree of autonomy while receiving a regular salary and financial backing from their employer. What type of entrepreneur are they? Question options: a) insourced entrepreneurs b) intrapreneurs c) multipreneurs d) corporate entrepreneurs

It helps people start and manage small businesses

The Business Development Bank of Canada provides which of the following services? Question options: a) It provides direct loans for business start-ups b) It provides on-site consulting c) It helps people start and manage small businesses d) It helps immigrants with Canadian business start-ups

True

The first step in starting your own business is the creation of a unique marketable idea. Question options: False True

True

The most common use of a business plan is to persuade lenders and investors to finance the venture. Question options: True False

True

The two sources for debt financing are angel investors and venture capitalists. Question options: False True

the ability to serve specialized markets

What is one advantage of owning a small business? Question options: depending on other locations for assistance the ability to serve specialized markets having more financial resources the avoidance of taxes

b) difficulty obtaining financing

What is one of the main reasons the number of people starting businesses has decreased? Question options: a) a desire for more security b) difficulty obtaining financing c) a desire to avoid the stress of business ownership d) a desire for corporate benefits such as extended health insurance, vacation, etc.

Hire outside consultants.

What is one way to ease the burden of managing a business? Question options: a) Operate the business 20 hours a week b) Hire outside consultants c) Do all the work yourself and hire no employees d) Keep minimal inventory on hand

Small business owners accept the status quo and take a short-term view of the future.

What is the difference between small business owners and entrepreneurs? Question options: Small business owners started the business to pursue their idea for a new product or service. Small business owners are risk takers. Small business owners are innovators. Small business owners accept the status quo and take a short-term view of the future.

The entrepreneur assumes the risk of the business

What is the difference between the small business owner and the entrepreneur? Question options: The entrepreneur is responsible for the profits of the business. The entrepreneur assumes the risk of the business. The entrepreneur files taxes for the business. The entrepreneur manages the business.

d) to do a self-assessment

What is the first step in starting your own business? Question options: a)to make a business plan b) to find an idea for a new product or service c) to determine where the funding will come from d) to do a self-assessment

a first operating plan for a new business

Which of the following BEST describes a business plan? Question options: a first operating plan for a new business a focus on the product or service a document for the bankers a detailed description of the competition

multipreneurs

Which of the following are entrepreneurs who start a series of companies? Question options: multi-venturists multi-faceted venturists multipreneurs intrapreneurs

Angel investors

Which of the following are individual investors or groups of experienced investors who provide funding for start-up businesses? Question options: angel investors equity entrepreneurs opportunity entrepreneurs entrepreneurial capitalists

They provide funding for start-up businesses

Which of the following best describes angel investors? Question options: a) They provide funding for start-up businesses b) They are bank loan officers who are responsible for funding start-up businesses c) They are most interested in investing in businesses that are well established d) They provide equity financing to a business by loaning the business money at a low interest rate

They run mini-companies within large corporations.

Which of the following best describes intrapreneurs? Question options: They have the characteristics of creativity and vision, but are not risk takers. They receive higher salaries and better employee benefits. They have a low degree of autonomy because they work for a large corporation. They run mini-companies within large corporations.

owning and operating the business

Which of the following best describes the activity of an entrepreneur? Question options: financing the business locating the business managing the business owning and operating the business

female with high university education

Which of the following best describes the profile of web-driven entrepreneurs? Question options: female with high university education female with high school education male with high school education male with high university education

It is financing obtained from investment companies that specialize in financing small, high-growth companies.

Which of the following best describes venture capital? Question options: It includes all the money the owner of the business invests in his or her new enterprise. It is financing obtained from investment companies that specialize in financing small, high-growth companies. It is another name for the principal that a business borrows from a bank. It is borrowed money invested in start-up businesses and provided by the Business Development Bank of Canada.

The number of people starting businesses has decreased

Which of the following describes the trend in entrepreneurship in recent years? Question options: The number of people starting businesses has remained the same. The number of people starting businesses has increased. The number of people starting businesses has slowed. The number of people starting businesses has decreased.

bank loans

Which of the following does the Business Development Bank of Canada offer? Question options: the elimination of sales and employee taxation for the first three years of operation employee recruiting, hiring, and firing bank loans entrepreneurial ideas

Small businesses are owned by an individual or small group.

Which of the following is a characteristic of small businesses? Question options: a) Small businesses pay very little tax b) Small businesses are owned by an individual or small group c) Small businesses are very influential in their industries d) Small businesses can be based nationally

extreme personal commitment

Which of the following is a disadvantage associated with the ownership of a small business? Question options: a) easier fundraising b) unlimited management skill c) fewer government regulations d) extreme personal commitment

a) a business plan

Which of the following is a formal written statement that describes in detail the idea for a new business and how it will be carried out? Question options: a) a business plan b) a mission statement c) a vision d) a statement of purpose

Business Development Bank of Canada

Which of the following is an agency of the federal government that offers both managerial and financial assistance to small businesses? Question options: Business Development Bank of Canada Business Incubator Agency Business Welfare Administration Federal Aid Program

inadequate planning

Which of the following is at the core of most business failures? Question options: too much inventory poor cash flow low interest rate inadequate planning

the business owner

Which of the following provides the start-up financing for the majority of new small businesses? Question options: the local bank venture capitalists the business owner the Business Development Bank of Canada

growth

Which of the following receives greater focus from web-driven entrepreneurs than from traditional entrepreneurs? Question options: profit growth free time innovation

export trading companies

Which of the following represent international trade specialists who buy goods at a discount from small businesses and resell them abroad? Question options: business trade unions domestic channel members commission house brokers export trading companies

a) an entrepreneur

Which of the following terms would be used to identify the person who takes the risk of starting and managing a business to make a profit? Question options: a) an entrepreneur b) a franchiser c) a venture capitalist d) a capitalistic adventurer

debt; equity

Which of the following two forms of business financing describe borrowed funds and ownership funds, respectively? Question options: debt; equity credit; leverage equity; debt equity; leverage

our rapidly changing technology

Why does small business thrive in Canada? Question options: the owners' ability to avoid outsourcing the owners' regular working hours our rapidly changing technology they have lower costs to comply with regulations

intrapreneurs

Gord Larose and his friend David Allan worked at Oracle, a giant company. They dreamed up a scheme for renting software over the Internet. Instead of quitting their jobs, they reported to work on Monday, explained their plan to their boss, and began working to make their idea a reality. Larose and Allan are examples of which of the following type of entrepreneur? Question options: growth-oriented entrepreneurs interpreneurs multipreneurs intrapreneurs