New Venture Creation Final Exam
True or false? A web development company has its employees do most of the work of the business. This is called self-management.
FALSE
True or false? An organization need only consider short-term risks when starting out.
FALSE
True or false? Being a woman makes it easy to gain entry into the tech industry.
FALSE
True or false? Copyrights are issued by the secretary of state's office.
FALSE
True or false? During the rebirth stage, industries change or business owners fail to keep their offerings relevant.
FALSE
True or false? Financial accounting statements are only useful to the owners of the business.
FALSE
True or false? Juan is the owner of a widget shop. He tells a client that his machine can produce 1,000 widgets in an hour if the machine does not have to be resupplied with raw materials, cleaned, or shut down for repairs. Juan is referring to the machine's operational capacity.
FALSE
True or false? Large corporations employ the greatest percentage of the US workforce.
FALSE
True or false? Multistate businesses only collect sales tax in their home state.
FALSE
True or false? One of the advantages of bootstrapping as a financing method is that the owner makes personal sacrifices.
FALSE
True or false? Risk attitude is the amount of risk the business can support.
FALSE
True or false? Seventy-five percent of business venture-backed startups succeed.
FALSE
True or false? The first questions entrepreneurs need to ask themselves are: When can I take my company public? When can I obtain a patent?
FALSE
True or false? The lean plan should never be revised.
FALSE
True or false? The most common type of legal risk is breach of contracts.
FALSE
True or false? When a business uses bartering for services, there are no accounting transactions to worry about.
FALSE
True or false? With an S corporation, you can have 150 shareholders.
FALSE
True or false? You and your former partner are in legal battles because they wanted out of the business. This could be avoided if a nondisclosure agreement was included in the forming documents.
FALSE
True or false? You should not consider the entrepreneurial team members' expectations when launching.
FALSE
True or false? Henry Ford was the first person to describe the division of labor that is used in Western economic models.
FALSE Adam Smith
True or false? During the growth stage of the business cycle, the market could be saturated, and there may be lower-cost alternatives for the customers.
FALSE maturity stage
Distinguish between tangible and intangible resources, giving specific examples of each.
tangible resources: assets that have a physical form as they can be seen, touched, and felt (ex: land furniture, equipment) intangible resources: assets that cannot be seen, touched, or felt, such as intellectual property, patents, designs, and processes (ex: patents, trademarks, customer lists, recognition)
True or false? Outsourcing work to contractors is a preferred method of getting sales work completed if the organization is under financial strain.
TRUE
True or false? Research indicates that a majority of reported misconduct involved managers.
TRUE
True or false? The basic accounting equation can be stated as Assets - Liabilities = Owner's Equity.
TRUE
True or false? The business plan should begin with an executive summary.
TRUE
True or false? The business structure impacts the tax circumstances of the owners.
TRUE
True or false? The statement of cash flows is a mandatory financial statement.
TRUE
True or false? The total cost of ownership of equipment needed to run a business includes the sticker price, delivery, installation, set-up, calibration, and operational expenses.
TRUE
True or false? Using new distribution channels is one strategy for growth.
TRUE
True or false? You can contact the secretary of state's office in your state to ensure your business meets the legal requirements for licensing and permits.
TRUE
True or false? A business can have negative owner's equity and still be profitable.
TRUE
True or false? A design patent involves the actual design of an invention.
TRUE
True or false? A noncompete clause prevents someone from working for a competing organization generally for one year.
TRUE
True or false? An LP has an unlimited number of general and limited partners.
TRUE
True or false? An MVP is an early stage prototype.
TRUE
True or false? An effective leader is aware of his or her shortcomings and chooses employees who can compensate for those shortcomings.
TRUE
True or false? Company culture supports the values and behaviors that you want to advance throughout the organization.
TRUE
True or false? Customer frustrations with existing product packaging are addressed in the customer empathy map.
TRUE
True or false? During the lean pitch you should discuss what you have accomplished thus far in terms of sales/profits.
TRUE
True or false? Entrepreneurs operate in a competitive environment.
TRUE
True or false? Equity crowdfunding is raising capital through the online sale of securities.
TRUE
True or false? Franchising is a type of licensing.
TRUE
True or false? If you think your business has a great deal of growth potential so that you might want to sell interest in the business, you should use the corporation business structure.
TRUE
True or false? If you think your business has a great deal of growth potential so you might want to sell interest in the business, you should use the corporation business structure.
TRUE
True or false? It is important to understand the sociocultural factors of your customers in order to allocate your marketing resources optimally.
TRUE
True or false? Outsourcing work to contractors is a preferred method of getting sales work completed if the organization is under financial strain.
TRUE
True or false? The business structure impacts the tax circumstances of the owners.
TRUE
True or false? The total cost of ownership of equipment needed to run a business includes the sticker price, delivery, installation, set-up, calibration, and operational expenses.
TRUE
True or false? You can contact the secretary of state's office in your state to ensure your business meets the legal requirements for licensing and permits.
TRUE
True or false? You should only have one Gantt chart for the organization.
TRUE
Why is the initial decision about entity selection so important?
The business may have the potential to evolve into a much larger business.
Why is the initial decision about the entity selection so important?
The business may have the potential to evolve into a much larger business.
NFL quarterback Tom Brady, MLB pitcher Nolan Ryan, and medical news reporter and neurosurgeon Dr. Sanjay Gupta all agree that ________ is vital to entrepreneurial success.
teamwork
double taxation
the act of paying income taxes twice on the same income.
The code of conduct establishes ________.
the guiding principles and details of what is acceptable and not acceptable
Which entity determines if an organization is not-for-profit?
secretary of state
Which of the following is best if you want to manage the business yourself and protect your personal assets?
single-member LLC
An entrepreneur who just starts doing business is automatically classified as the ________ business structure.
sole proprietor
At which stage in the business cycle are resources most scarce?
startup
Which of the following improve the performance of established products through characteristics that mainstream customers adopt?
sustaining technologies
Assets that have a physical form are called ________.
tangible
True or false? Only 5 to 30 percent of new products are successful.
TRUE
How does the lean startup method enable products/services to get to customers in a shorter period of time?
Companies learn from customers during the planning process.
Describe the benefits of performing a baseline study.
Comparing actual outcomes with expected outcomes is a form of internal comparison called baselining. Baselining is important because the entrepreneur must conduct a self-evaluation on what the business has done versus what it can or should do.
True or false? Job creation is a financial measure of value.
TRUE
True or false? Most entrepreneurs start their business by using their personal savings.
TRUE
Small businesses are defined as organizations with fewer than ________ workers.
50
Discuss the challenges facing women and minorities in the entrepreneurial field.
According to a 2018 Capitol Hill discussion on women, minorities, and entrepreneurship, the current entrepreneurial demographics show that only 12 percent of US innovators are women and that US-born minorities accounted for 8 percent, with African Americans making up only one-half of 1 percent of this group. Some of the challenges identified in this discussion for groups other than the traditional entrepreneurs described include life choices such as childbearing, access to funding, and lack of support and follow-through to support women and minorities in their interests related to potential entrepreneurial activities.
Which of the following is the best description of accounting's role in business?
Accounting statements provide information to managers to operate the business and to other users to make decisions regarding the economic condition of the business.
Which of the following is an example of a closed group?
American Association of University Women
Which of the following is an example of a college or university special interest group?
Botany-Microbiology Club
Describe and give an example of each of the following common business model types: direct, multisided, and marketplace
Direct businesses are the most common and involve one-sided actors—that is, users—becoming your customers. A coffee shop is a classic example. In multisided models, users and customers—multi-actors—are usually different people. Ad-based models, big data, and enterprise are common examples where the products are free to users, and their value is monetized by a different customer base. Marketplace models are a more complex variant of multisided models made up of two different customer segments of buyers and sellers. eBay and Airbnb are well-known examples of marketplace models.
Describe how a cross-disciplinary team benefits both the team members and the employers.
Doing this causes there to be more of a relationship between coworkers. As opposed to coming t work and only talking with coworkers when required. This helps form the workers of the organization as a business family. Leading them to discover common goals and ambitions as well as possible issues.
What is the first step in any entrepreneurial venture?
Establish the nature and purpose of the business.
True or false? During the rebirth stage, industries change or business owners fail to keep their offerings relevant.
FALSE
True or false? Employees work for leaders because they are obligated to on the basis of assigned roles.
FALSE
True or false? The breakeven point is when sales are greater than expenses.
FALSE
True or false? Contingency plans are not included in the founders' agreement.
FALSE
True or false? Issues of cash flow can lead to a quick increase in business growth.
FALSE
True or false? A business plan only serves external purposes.
FALSE
True or false? A product must be built to be an MVP.
FALSE
True or false? Adaptability is about addressing the assumptions that will create customer value.
FALSE
True or false? An entrepreneur needs to purchase printer paper, ink, and other office supplies. These are included in capital expenses.
FALSE
True or false? An organization need only consider short-term risks when starting out.
FALSE
True or false? Disruptive innovations are more advantageous to existing firms rather than new entrants.
FALSE
True or false? Exchange rates are important to consider if you are operating in your home country.
FALSE
True or false? Fixed costs for a business are easy to control.
FALSE
True or false? Grants are an easy way to get funding for your new business venture.
FALSE
True or false? High sales is one reason for business failure.
FALSE
True or false? Highly successful ventures will eventually earn a good deal of money.
FALSE
True or false? In brainstorming, ideas should first be vetted for ease of implementation.
FALSE
True or false? Intellectual property is considered a tangible resource.
FALSE
True or false? Most publicly traded companies go public when they first begin operations.
FALSE
True or false? Original team members for the venture generally stay for the life of the business.
FALSE
True or false? Resource dependence theory can eliminate the effects of competing with other businesses.
FALSE
True or false? Seventy-five percent of business venture-backed startups succeed.
FALSE
True or false? The business model canvas is designed to not be revised.
FALSE
True or false? The first questions entrepreneurs need to ask themselves are: - When can I take my company public? - When can I obtain a patent?
FALSE
True or false? The income statement shows the effects of a company's operating, investing, and financing activities on cash.
FALSE
True or false? The lean plan should be a lengthy document.
FALSE
True or false? The state in which you live is the state in which you must form your business.
FALSE
True or false? Using an idea that has been rejected by someone you are mentoring can provide a viable business venture for you.
FALSE
True or false? When a company issues stock or a stake in the company, the influx of cash is reflected in the investing section of the cash flow statement.
FALSE
True or false? When you lease a vehicle, you can deduct a deprecation value.
FALSE
True or false? A 3-D printer is one of the basic investments in technology that you will need to make for your business.
FALSE
What are fail-safe points? Give a couple of examples of fail-safe points for an organic pet food operation.
Fail-Safe points: These are the points that trigger the entrepreneur to consider what actions are needed to bring the venture back to a healthy position and whether this action is reasonable and feasible. Identifying these trigger points and creating contingency plans before opening the venture can prevent the entrepreneur from becoming trapped by these biases, such as the dangers of becoming overly committed and throwing resources into an impossible situation. the first fail-safe point could be not reaching a large enough target market therefore not allowing the word of your business to venture out into different target markets. You never want to create something that almost seems too optimistic or too good to be true, cause it may cause the customers to think it's a scam or a joke and not take you seriously. Show them you have a plan in place with confidence and accuracy and that will generate a good amount of customers and people who would want to invest into your product or services.
Which of the following is one of the disadvantages of crowdsource funding?
Failed projects could damage the business's reputation.
True or false? The first step to obtaining a patent is filing for provisional two-year patent protection.
False
How does an entrepreneur create a unique value proposition?
Find the intersection between customer problems and your solution.
Differentiate between fixed and variable costs. Using a business idea that you have, discuss some expected fixed and variable costs.
Fixed costs are a payment that you make that generally stays the same price over time. They are a set amount and do not change, regardless of the number of sales. Some examples of this in my ideal dog business would be, rent and insurance While variable costs tend to fluctuate more with the level of revenue and do not have a set price that you pay each month. Some examples of a variable cost may be how much flour you need for your bakery to make dog treats for the dog bakery, as well as labor, and any other raw material needed to make the business run effectively and efficiently. Both of these costs are vitally important to make sure that the business stays running and that you are hopefully able to achieve the goal of breakeven.
Describe a business that you might want to start and discuss the appropriate business structure for your business.
For the Business, The Happy Dog Lodge will more than likely become an LLC where the members are not personally liable for the actions of the company. Another benefit of doing the Limited Liability Corporation business model as opposed to others allows management flexibility and tends to have an easy start-up and upkeep.
Which management consultant introduced scientific management techniques into manufacturing industries?
Frederick Taylor
True or false? No matter what industry you are in, you must invest in technology to support the day-to-day functioning of the operation.
TRUE
True or false? Once the business launches, you may find that the venture goes in a different direction that the original plan.
TRUE
Using the business life cycle as a guide, discuss which types of funding sources might be appropriate at each phase in the cycle.
Funding sources are essential to starting and scaling a business. These include an entrepreneur's own savings, bank loans, venture capitalists, angel investors, crowdfunding, and friends and family. It is important to consider the pros and cons of your financing options in relation to your resource needs in order to plan for short- and long-term needs.
Which of the following is a visual method to track assigned activities with a timeline?
Gantt chart
You are considering adding a personality assessment to your employee hiring process. Your dream team advisory board has advised you against it. Make an argument for or against using a personality assessment and support your argument with reasoning.
I strongly believe that employee assessments are vital to keeping a good staff on hand that is committed to working, uplifting, and bettering the image of the company. If the business is not progressing it is regressing and it all starts at the heart of the business, the team you hire. While doing this employee assessment you should ask the employee about their career goals in 6 months and then a year, doing so allows them to strive for that goal. The staff should constantly seek to build its strengths and improve any weaknesses in order to develop the business as a whole. If you don't check on the status of your team to ensure that they still love their job and find satisfaction in what they do, they are more likely to experience burnout, which may lead to a higher turnover rate.
What is meant by a tripartite corporate structure?
In a tripartite approach, three groups are involved in owning and managing a corporation. Shareholders elect directors who appoint officers. Shareholders are owners, and directors/officers may be, and typically are, shareholders.
What should be included in the competitive analysis section of the business plan?
In this section, your competitors should be evaluated, as well as any marketing or feature of your business that will entice customers to choose your business over your competitors
Explain the three major financial statements.
Income Statement: "financial statement that describes how much a company earned while the business was operating and what costs were incurred to generate those revenues" Balance Sheet: "financial statement that summarizes a company's financial condition according to the accounting equation" Statement of Cash Flows: financial statement that explains the sources and uses of the company's cash
Why has lack of reflection been identified as a factor that hinders success?
Increased awareness of thoughts and feelings can lead to recognizing strengths.
How is the statement of cash flows useful?
It allows creditors to analyze how much cash is on hand in order for the business to fund any needed operating expenses.
Why can journaling be beneficial?
It can lead to insights and patterns of behavior that help us grow.
Which of the following is one of the advantages to bootstrap funding?
It creates a strong, lean, efficient customer-focused business.
How does the build-measure-learn loop help the entrepreneur?
It helps the entrepreneur make quick adjustments to products and strategies.
Why have tech companies primarily used the lean startup method?
It is risky to work many years on a product without measuring customer response.
How is a joint venture different from a legal partnership?
Joint ventures are used during a limited period of time and for a single purpose
Which of the following formations has limited liability for all the owners?
LLC
Which of the following is true about assets?
Owners and/or creditors finance the assets of a business.
Which of the following is a true statement about an IPO?
Owners lose part of their ownership of the business.
The ________ model explains how forming networks can help mitigate dependencies among member groups.
RDT
Every business has the ability to accept donations. Why then do for-profit businesses tend to shy away from accepting donations?
Rather than accepting donations one source of funding for a for-profit organization is competing for grants. Where donations are given freely typically without any hesitation or restriction, whereas grants specify how the funds are to be managed and used accordingly.
The target market segment is known as a(n) ________.
SAM
How can SCORE contribute to the needed resources for the entrepreneur?
SCORE is a strong network for finding a mentor.
Explain the funding across the company lifecycle.
SEED: personal saving small investments from family and friends (F&F) angel investors EARLY: Angel investors or funds Venture capitalists or private equity MATURE GROWTH: Self-sustaining private equity sale initial public offering (IPO)
Briefly discuss the resources needed at each phase of the business cycle.
STARTUP:Initial capital, basic equipment, inventory, few employees, facility (home or location), cost of goods sold, marketing materials, mentorship GROWTH: More capital, additional employees/departments, marketing, additional MATURITY: Branding, outsourcing DECLINE/REBIRTH: New equipment/technology, new products, new patents, equity funding for possible merger
Tamara started a business selling fair trade clothing. Her business has recently expanded from her small town to several larger cities in the state. Which of these statements best describes how her banking needs have evolved?
She opened an account with a small bank and moved to a large bank.
True or false? A design patent involves the actual design of an invention.
TRUE
True or false? A lean startup calls for a product to be shared with early adopters to gain immediate feedback.
TRUE
True or false? A mobile app is an example of a direct business.
TRUE
True or false? Entrepreneurs operate in a competitive environment.
TRUE
True or false? No matter what industry you are in, you must invest in technology to support the day-to-day functioning of the operation.
TRUE
True or false? The total cost of ownership of equipment needed to run a business includes the sticker price, delivery, installation, set-up, calibration, and operational expenses.
TRUE
True or false? The executive summary should include a funding request.
TRUE
True or false? A business can have negative owner's equity and still be profitable.
TRUE
True or false? A decision tree can help the entrepreneur explore all the decision alternatives and their possible outcomes.
TRUE
True or false? A lean plan is a brief business plan to show to potential investors.
TRUE
True or false? A lean startup calls for a product to be shared with early adopters to gain immediate feedback.
TRUE
True or false? A noncompete clause prevents someone from working for a competing organization generally for one year.
TRUE
True or false? A person with an internal locus of control believes that they have significant control and influence over events in their life.
TRUE
True or false? Adding visuals encourages people's brains to think creatively.
TRUE
True or false? An MVP is an early stage prototype.
TRUE
True or false? Capital is required at every step of a business.
TRUE
True or false? Company culture supports the values and behaviors that you want to advance throughout the organization.
TRUE
True or false? Disruptive innovations create new markets.
TRUE
True or false? During the lean pitch you should discuss what you have accomplished thus far in terms of sales/profits.
TRUE
True or false? Each state maintains its own taxation requirements for businesses and not-for-profits.
TRUE
True or false? Escalation of commitment negates the recognition of the need to pivot.
TRUE
True or false? Every business has the ability to accept donations.
TRUE
True or false? If total assets increased by $190,000 and liabilities decreased by $10,000 during a specific period, the total owner's equity increased by $200,000 during that same period.
TRUE
True or false? If you think your business has a great deal of growth potential so you might want to sell interest in the business, you should use the corporation business structure. Group of answer choices
TRUE
True or false? It is important to understand the sociocultural factors of your customers in order to allocate your marketing resources optimally.
TRUE
Develop a customer empathy map for a product/service that you are familiar with.
The customer empathy map is a portrayal of a target customer—the most promising candidate from a business's customer segments—that explores the understanding of that person's problems and needs. First, I would as the most common questions: - With whom are we empathizing? - What do they need to do? - What do they see? - What do they say? - What do they do? - What do they hear? - What do they think? Doing this allows the customers to be seen, heard, and feel as if their voices, opinions, and thoughts matter. Once asking the customers these questions to see how satisfied or unsatisfied they are with the business. This allows room for growth in the business!
Why should entrepreneurs create an employee handbook?
The handbook can protect against conflicts with employees.
What are the common cognitive biases that entrepreneurs face? Which bias do you think you are most susceptible to experiencing?
The illusion of control refers to the entrepreneur believing that he or she can force the market into realizing the venture is the best, or that additional persistence will result in positive results. I believe I could be most susceptible to this bias at this moment in time being that I am not too familiar with what the other markets have to offer and what could actually have the opportunity to be able to improve my sales and need for more supplies. The goal is to be the best but to be humble about it while building a relationship with my competitors to put me t the top.
Why should the angel investor be seen as a valuable resource beyond financial means for the entrepreneur?
The investor has industry knowledge, networks, and experience to help the venture be successful.
How is a lean pitch different from a regular pitch?
The lean pitch includes a validation of the business model with data.
How is a lean plan different from the traditional business plan?
The lean plan only includes the components for the build-measure-learn loop.
What benefits can nonprofit organizations like SCORE offer aspiring entrepreneurs?
There are many benefits that come with being a nonprofit organization. tax-exemption, access to grants, credibility, US postal services discounts, limited liability protection and more.
Discuss some advantages and disadvantages of partnerships.
There are many pros that come with being in a partnership, the first being that you have an extra set of hands to help around the business. Doing so also entails the benefit of having a different perspective on situations and gaining that additional knowledge that you wouldn't by yourself from that different perspective. with the extra set of hands, you have less financial burden, paperwork, and fewer tax forms. With that also comes some cons, where you will not have the authority to make a decision on your own. All decisions for the business must be run by the business partner first. Doing so possibly includes the risk of having disagreements which could hinder the feelings toward one another.
Why do entrepreneurs provide their financial statements?
To give a snapshot of their operations, cash flow, and financial health
Using a business idea that you have, develop the value proposition for the product or service.
We aim to not only make it easier on you but on your doggo(s) as well. We are an environment focused on managing your dog's stress.
Do you see value in journaling as outlined in the text? Why or why not? Try journaling about one day in your life this past week.
Yes, because it allows you to put your random thoughts on paper. You have the likelihood of retaining that information better as well since you physically wrote it down. Journaling could also be beneficial in a way to help elevate any stress that may be weighing on your shoulders.
Financial analysis typically includes ________.
a breakeven calculation
Describe the differences between patents, copyrights, and trademarks.
a patent is a legal grant of protection for an inventor over the rights, usage, and commercialization of an invention for a set time period. A copyright grants the creator of a work the exclusive right to reproduction of the work for a specified period of time A trademark is a registration that provides the owner the ability to use a name, symbol, jingle, or character in conjunction with a specific product or service and prevents others from using those same symbols to sell their products. A trademark can be protected for an unlimited number of ten-year renewable terms as long as it is still in use.
Which of the following is considered a liability?
accounts payable
What is the purpose of the customer empathy map?
accurately portray the target market for the product/service
What is a major purpose for using the business plan externally?
as an investment tool
Intangible resources are ________.
assets that cannot be seen, touched, or felt
Why will a disruptive technology fail in most instances?
because a different business model will be needed
Why is direct labor considered a variable cost?
because it can fluctuate with sales revenues
Why are venture capitalists likely to fund businesses in technology, media/entertainment, and pharmaceutical industries?
because they expect to have a high payout in three to five years
Why are venture capitalists likely to fund businesses in the technology, media/entertainment, and pharmaceutical industries?
because they expect to have a high payout in three to five years
Which of the following happens when entrepreneurs compare their business with an industry average or a market segment?
benchmarking
Discuss the similarities and differences between bootstrapping and utilizing your personal savings to fund a business venture.
bootstrapping funding strategy that seeks to optimize use of personal funds and other creative strategies (such as bartering) to minimize cash outflows
Discuss the steps in the build-measure-learn loop.
build-measure-learn loop: step-by-step approach on how to maneuver a startup, how to change course if necessary, how to persevere, and how to accelerate the expansion of a business The build-measure-learn loop is a framework that helps entrepreneurs develop their idea into a minimum viable product (MVP), measure its impact on people, and learn if there is a need to pivot (change) or persevere.
Which of the following could be considered collateral for a loan? (Select all that apply.)
buildings, machinery, and inventory
Which of the following is the ending of a business due to lack of goal attainment?
business failure
Describe at least two differences between a business incubator and a business accelerator.
business incubators are typically fee-based with an open-ended duration business accelerators are typically growth based with a fixed duration. Although they have these differences they also have similarities in going through and having training, mentoring, and business support.
Discuss the components of the business model canvas.
business model canvas: developed by Osterwalder and Pigneur, used to develop a business model for a venture, including nine blocks that are mapped out to address customer segments, customer relationships, channels, revenue streams, value propositions, key partners, key activities, key resources, and cost structure
The statement of cash flows is not useful for ________.
calculating the overall value of the business
Why do most businesses fail within the first few years?
cash flow issues
Charitable missions include all of the following except:
collecting taxes for a government body
Which business structure operates as a separate legal entity apart from the owners?
corporation
Which of the following is most likely to obtain large amounts of investments by the issuance of stock?
corporation
One advantage of a business incubator is ________.
cost savings because you are sharing space
In the 2001 film Ocean's Eleven, a team is organized for a casino heist. The team members include a con man, a pickpocket, an acrobat, and an explosives expert. Which of these characteristics best explains the high effectiveness of the team?
cross-disciplinary
In the 2001 film Ocean's Eleven, a team is organized for a casino heist. The team members include a con man, a pickpocket, an acrobat, and an explosives expert. Which of these characteristics best explains the high effectiveness of the team?
cross-disciplinary
What type of pivot is needed when the customer that is studied is not representative of who will buy the product at a larger scale?
customer segment
If you pay $4,250 toward an outstanding amount owed, the effect on the accounting equation is ________.
decrease an asset and decrease a liability
Which of the following groups like to try new products as soon as they come out?
early adopters
Discuss the concept of early adopters and how they fit into the lean process. Do you consider yourself an early adopter? Why or why not?
early adopters: people who like to try new things and can be found at the onset of the adoption process for a product. They are important for the process of a lean start-up because they are not afraid to take risks to become a trend setter. I would like to think I'm an early adopter, but I only buy things after being able to review the product or read reviews from others to make sure that it is something that is worth while.
You source some of your raw materials from a supplier located in the UK. Which category of risk should you be most concerned about?
economic risks
According to the text, which of these mindsets is challenging to leave behind as a new entrepreneur?
employee
You have decided to open an organic pet food store. You will make all the products in-house and will have a small retail space to sell your products. You will also have a website where your products will be sold. Finally, you expect to do some traveling to various dog shows to sell and market your product. Discuss how you will use the concept of enterprise risk management in this organization.
enterprise risk management an integrated cross-disciplinary approach to monitoring risk
Which of the following is also referred to as business structure from a legal perspective?
entity selection
Engineers at a paper manufacturer designed a workstation so that the machine operator did not have to repeatedly reach too far while performing his work. The engineers used ________ to plan the design of the workstation.
ergonomics
You fail to recognize that after the initial launch, customer interest has decreased for your product, but you continue on the same path since launch. You could be experiencing ________.
escalation of commitment
Which of the following best describes a role of an advisory team?
explain options and risks
Which of the following are items that trigger the consideration of the contingency plan in the venture?
fail-safe points
Which of the following is used to help determine whether to continue with the venture?
feasibility study
The ________ type of organizational structure works best when the environment is changing rapidly, the members of the organization have a shared purpose, and there is a need for innovation.
flat
The ________ describes team member compensation, vesting plan, and exit strategy of team members.
founders' agreement
Your business is very successful. You want to open a new location in another state using the same business model. What might be an appropriate strategy for you to consider?
franchising
Not-for-profits are formed to ________.
further a social cause
A(n) ________ is created when two or more individuals agree to work together to operate a business for profit.
general partnership
Which of the following is not a role of accounting statements in a business?
guarantees loans of the business that the owners use for everyday expenses
What is meant by "operates as a separate legal entity?"
has some of the same legal rights has an individual
How can entrepreneurs avoid the misguided perceptions of expectations for the business with other team members?
having an agreed upon founders' agreement
Which of the following is an overinflated belief in yourself?
hubris
People hired by the entrepreneur to perform various duties in the business are called ________.
human resources
Does a nonprofit organization have to worry about break-even analyses or projections?
ideally, the goal of a non-profit organization is to have many sales as possible while managing your money correctly so that it is evenly distributed and you are not spending more or less than needed. The overall go should be to break even so that revenues equal costs
Earning revenue's effect on the accounting equation would be ________.
increase assets and increase owner's equity
Coca-Cola's brand-line extension with Cherry Coke and Coca-Cola with Lime is an example of ________.
incremental innovation
All of the following are political factors to consider except ________.
inflation
Discuss the concept of innovation and how disruptive innovations create new markets. Give an example.
innovation new idea, process, or product, or a change to an existing product or process disruptive innovation process that significantly impacts the market by making a product or service more affordable and/or accessible often by smaller companies in an industry
Which of the following are some of the financial factors that play a large role in startup failure?
insufficient cash flow, too much debt, and lack of capital
Which of the following are considered assets? (Select all that apply.)
inventory and investments
An IT company and a pharmaceutical company collaborate to develop a product to better assess patient status in the emergency room. Which formation is this an example of?
joint venture
When might a joint venture be appropriate instead of forming a partnership?
joint venture temporary partnership in which two different enterprises combine for the purpose of mutual benefits such as sharing of expenses and to work toward shared goals and the associated potential revenue partnership business entity formed by two or more individuals, or partners, each of whom contributes something such as capital, equipment, or skills The most pulling factor for a joint venture is that it can make and claim its own tax deductions whereas business partners must pay their taxes on their part of the partnership.
Which type of canvas is most typically used by entrepreneurs?
lean canvas
Compare and contrast the business model canvas to the lean business model canvas.
lean model canvas developed by Ash Maurya as a derivation of the original business model canvas; this canvas differs by addressing unfair advantages, problems, solutions, and key metrics rather than customer relationships, key partners, key activities, and key resources business model canvas developed by Osterwalder and Pigneur, used to develop a business model for a venture, including nine blocks that are mapped out to address customer segments, customer relationships, channels, revenue streams, value propositions, key partners, key activities, key resources, and cost structure
Which of the following is a methodology that helps innovation by continuously testing products and getting feedback in real time?
lean startup
Discuss the lean startup methodology and why it is primarily used in the tech industry.
lean startup methodology entrepreneurs use this method to help them innovate by continuously testing their products and getting feedback from customers in real time. Because they are aware of the risk of working on a product and not measuring the risk of that product or the environment.
Which of the following is a contract in which one enterprise gives permission to another to manufacture and sell its product?
licensing
Which of the following is a characteristic of linear thinking?
logical
Discuss some of the launch considerations in the early stage that the entrepreneur should consider.
market research. They need to know where and how to market their product and/or service to reach their desired target market
A ________ has a center that defines the problem and then branches to identify possible reasons for the problem.
mindmap
To boost sales for your organic pet food, you decide to work through veterinarians in the local area to showcase and sell your products. This is an example of which growth strategy?
new distribution channel
What are the common cognitive biases that entrepreneurs face? Which bias do you think you are most susceptible to experiencing?
optimism, overconfidence, hindsight bias, escalation of commitment, status quo bias, planning fallacy, the illusion of control, and law of small numbers
Which part of the feasibility pyramid asses the capability of management and the sufficiency of resources to bring the product to market?
organizational feasibility
According to research, what are the two most significant biases that contribute to the failure to recognize the venture should be changed or ended?
overconfidence and optimism
The verbal delivery of an idea or business plan is called ________.
pitching
Your goal for the first year of business is to capture 65 percent of the existing target market for your product. This is an example of ________.
planning fallacy
The type of patent that is granted to someone who discovers a new type of plant is referred to as a(n) ________.
plant patent
PEST stands for ________.
political economic social technological
Discuss typical management challenges that can lead to business failure.
poor leadership and/or management lack of planning or preparing not having control over finances
Which of the following is a drawback of utilizing angel investors as a funding source?
possibly being forced out of your own company
Which of the following is (are) the cost(s) of all the resources needed to open the business to the public?
pre-launch costs
Which of the following occurs when customers pay for items before they are launched?
pre-ordering
Which of the following would create a taxable income event from a bartering system?
preparing a tax return in exchange for free office cleaning for a month
Accountants can help entrepreneurs create a ________ that shows how much and where monies will be collected and spent in the early stages of the business.
pro forma
Which of the following is a micro-level purpose of the Small Business Administration?
protect and defend a competitive business environment
Which of the following would not be considered an accounting transaction of the business?
providing a sales offer
Which of the following would be considered a risk of becoming a mentor?
providing advice that later becomes detrimental
Procter & Gamble is an example of a(n) ________.
publicly held corporation
"The weather is beautiful today" is an example of ________ information.
qualitative
Which of the following refers to limiting the number of items entering a country?
quota
The phase of the business cycle in which branding and outsourcing are identified as resource needs is called ________.
rebirth
The quality of the labor pool refers to which part of the feasibility analysis?
resource sufficiency
Which step, where outcomes are thoroughly reviewed, should be done at least once a month?
reviewing your results
All of the following are examples tangible resources except ________.
trademarks
How can entrepreneurs recover from a business failure?
turn obstacles into positive lessons
Which of the following are considered fixed costs?
wages