Small Business MGMT Midterm

Which of the following statements is true of a franchise?

A franchise is a prepackaged business bought, rented, or leased from a company

Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. In Connie's business plan, which of the following statements is true of a vision statement?

A tagline or a slogan is a good way to present vision statements

Which of the following is try about business to business transactions?

B2B e commerce is larger than B2C e commerce

________ means taking business away from ones employer

Cannibalizing

Crowdsourcing is funding a business online through the collective involvement of others who provide donations, loans, or investments. T/F

False

Differentiation strategies target a niche segment of the market. T/F

False

For the successor of a family business, ownership transfer is best accomplished after the death of the founder. T/F

False

In deciding whether to make the move from part time to full time entrepreneurship, the key questions is usually government regulations. T/F

False

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

False

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

False

In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers. T/F

False

Incremental innovation is also called a blue ocean strategy. T/F

False

Key business functions are the abilities or skills of the entrepreneur at finding expendable components necessary to the operation of the business cut as time, information, location, financing, raw materials, and expertise. T/F

False

Selling your product or service in a limited area, for a limited time is known as parallel marketing. T/F

False

Taking products and services made in your home country and selling them in other countries is called importing. T/F

False

The absolute lowest price that a buyer would be willing to pay is called the "point of indifference" in the negotiation process. T/F

False

The elevator pitch is much shorter than a vision statement or tagline. T/F

False

The general environment is part of the internal environment. T/F

False

The three principles that are absolutely critical in the process of effectual reasoning are affordable loss, strategic partnerships, and contingencies. T/F

False

There are two ways to think about opportunities and business creation-one way is the effectuation model of entrepreneurship where you think about what you need to do to cause your new product or service to come into existence. T/F

False

When studying the business costs of ethical failures in large businesses, the more damaging costs received more executive attention. T/F

False

_______ is the general name for the ling of product or service being sold, or the firms in that line of business.

Industry

Which of the following is true of entrepreneurial alertness?

It allows entrepreneurs to notice things that have been overlooked

A _______ is a narrowly defined segment of the population that is likely to share interests or concerns.

Niche market

_______ is the idea and actions that explain how a firm will make its profits

Strategy

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

The meta strategy for a high growth venture is novelty

A license is a legal agreement that grants rights to use a particular piece of intellectual property. In return, you are required to pay the owner of the license. T/F

True

A situation that occurs when a person's values are in conflict, making it unclear whether a particular decision is the right thing to do is considered an ethical dilemma. T/F

True

All entrepreneurs have at least four sets of resources: access to capital; their own skills and abilities, their own knowledge, and the of friends and business associates. T/F

True

An opportunity that makes it possible for a new business to gain a foothold in a market is called an entry wedge. T/F

True

Big business often has trouble with innovations, but, small, new, businesses are more likely to see new revenues in innovations. T/F

True

Business plans are essential for external legitimacy and internal understanding. T/F

True

Delegation is not for everyone and every situation. T/F

True

Every business faces risks in the real world, so every business plan needs to spend some time addressing them. T/F

True

For corporations, certification for businesses owned by women or minority is handled by organizations that are not affiliated with the government or big business. T/F

True

Founders of small businesses often find it very difficult to give up decision making authority to family members. T/F

True

Gaining legitimacy in small businesses is especially difficult for entrepreneurs seen as "different" women, minorities, home based businesses, or businesses started by young people. T/F

True

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

True

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

True

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

True

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

True

One way entrepreneurs display passion is by being persistently focused on the business. T/F

True

Several models exist for the life cycle of the small business firm. Each divides the stages a bit differently. T/F

True

Strategy is the idea and actions that explain how a firm will make its profits. T/F

True

Succession plans deal with he people who will take over what roles they will fill and what supports they will receive. T/F

True

The feasibility of an idea is the extent to which it is viable and realistic. T/F

True

The major ways you cope with competitive pressures is by undertaking some combination of strategic actions and tactical actions. T/F

True

Universalism is an ethical model that suggests people get their ideas of right and wrong from their family, religion, education, and community. T/F

True

When considering how to organize the business you are creating, one consideration is permanence, which is related to legitimacy. T/F

True

The CEO at River Castle Inc. asked the employees to prepare a report on ways in which the company could become more environmental friendly. The reports revealed areas in which the company had been unnecessarily adding to its carbon footprint and consuming excessive energy due to faulty machines. As a corrective action, all the faulty and outdated equipment were replaced with efficient equipment. This is an example of ______

a green audit

Which of the following is a way to start business with established customers?

a spin off

Innovation driven economies ________

are focused on high value added manufacturing but are marked by a very large service sector

Getting the business organized and registered is an example of _______ competency.

boundary

A _______ plan is a document designed to detail the major characteristics of a firm-its product or service, its industry, its market, its manner of operating and its financial outcomes with an emphasis on the firms present and future.

business

The _______ of an organization will be a part of its task environment

competitors

In an imitative strategy, an entrepreneur ______

does more or less what others are already doing

The motivations, cognitions, attitudes, aptitudes, and behaviors that lead to a propensity to create solutions to problems or seeking opportunities to do something new or better is called

entrepreneurial mindset

The sum total of forces outside of an entrepreneur and a firm is called the ______

environment

One of the quickest and simplest ways to screen an idea for business potential is through the

feasibility study

Which of the following is the primary goal for performing due diligence?

finding any inefficiencies, unnoticed opportunities, waste, and mismanagement

Which of the following is one of the ways to get into small business ownership?

franchising

Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. The ______ rate is the percentage of people who buy out of the total population of people approached.

hit

Access problems for women and minority owned small businesses crop up most often as discrimination.

in financing

Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. One variant of the traditional business plan is the _____ plan consisting of company and organization sections, with revised cover letter, title page, executive summary, and table of contents to reflect the differences.

informational

Patents and trademarks are examples of

intangibles

The life cycle stage in which a product or service is being invented is known as the ______

introduction stage

A _______ is a legal agreement that grants the rights to use a particular piece of intellectual property

license

For part time businesses, _______ refers to the documented permission from the government to run a business and may be required for certain professions such as beauticians or home based day care providers.

licensing

Which of the following categories does the majority of small businesses fall under?

lifetime/part-time firms

In the SCAMPER tool, "M" stands for

modify

Which of the following is a disadvantage of a start up?

no revolving credit from suppliers or banks

The _______ is the most important element of social capital to customers and supporters of a business, such as bankers, lawyers, and suppliers.

owner

_______ refers to working for 35 or fewer hours a week.

part time employment

An entrepreneur's ______ is most likely to inspire key stakeholders like potential investors, employees, or subcontractors.

passion

_______ refers to the impression of a long term continuity a business gives others

permanence

Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. In Connie's business plan, which of the following pitch desk categories is sometimes given in the form of a user's experience?

problem slide

This stage of the business life cycle occurs once the firm is established in its market.

success stage

Which of the following answer options is not a product based legitimacy indicator?

testimonials

At the tip of the high growth ventures are firms called ________, like Uber and AirBnB with valuations of $1 billion or more.

unicorns

In an attempt to become more innovative, a major pitfall that business owners are most likely to become victim to is

using the first good idea as a business opportunity