CH 6 HW entrep
Only a small percentage of new ventures succeed.
True
The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture.
True
Researchers have described a "fully developed new firm" with a number of characteristics, including:
a and b both apply (full-time commitment and formal financial support)
A solid analysis is
a critical task in starting a new business.
An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the
feasibility criteria approach.
Which formula defines the quick ratio?
financial assets/current debt
Venture classifications include which of the following types of venture?
high-growth ventures
One of the external problems new ventures face is
market knowledge
A new venture should be
unique
It is reported that _____ new firms have emerged in the United States every year since the mid-1990s.
600,000
Most entrepreneurs are objective when they evaluate their new idea.
False
Most entrepreneurs are well schooled in the technology associated with their ventures.
False
Most entrepreneurs hire lawyers to brief them on the legal issues surrounding a new venture.
False
Overall market understanding rather than a time-consuming focus on market niches is sufficient for an evaluation.
False
Many entrepreneurs do not understand the marketing life cycle of a new product.
True
A new venture must go through_______phases.
three
In determining the potential market, one should look into the future.
three to five years
Failure of a new venture can be avoided
through a careful profile analysis.
Which of the following is critical to a product's success?
timing, objectivity, marketing approach
Product/market problems include which of the following?
unclear business definition
In shaping the ultimate success or failure of a new venture, which of the following statements is applicable?
A single strategic variable is seldom responsible.
There are five specific phases that a new venture goes through.
False
There is a great abundance of reliable data concerning the start-up, performance, and failure of new ventures.
False
Timing has little to do with the success or failure of a new venture.
False
"Intensity of competition" changes the dominance of problem areas.
True
Which of the following is a major reason for the failure of a new venture?
inadequate market knowledge
A common pitfall in selecting a new venture is
proper objective evaluation.
A checklist approach allows the entrepreneur to identify major strengths and weaknesses in factors of a new venture.
all of the above (the financial, the marketing, the organizational)
The evaluation process must be done by a research firm.
False
Market feasibility analysis relies on
general economic trends and competitor data
Poor financial understanding is characterized by which of the following?
inadequate understanding of costs and funding requirements
Name the pitfall described by the statement, "Engineers and technically trained people are particularly prone to falling in love with an idea for a product or service."
lack of objective evaluation
What is a critical consideration when assessing customer availability?
length of time needed to determine who the customers are and what their buying habits are
Timing is especially critical in which area?
marketing
Three specific phases that a new venture goes through are
prestart-up, start-up, poststart-up.
When a customer sees a product that is superior to its competitors, ______ becomes less important.
price
Which of the following as a factor contributing to new-venture failure?
product/market problems.
Rapid technological advances in many industries cause a concern for in new venture development.
rapid product obsolescence
In recent studies of new venture problems, dominant problems at start-up were related to:
sales/marketing
Sales growth is a critical factor in the
start-up phase.
Product design, reliability, and safety are all examples of
technical feasibility
The entrepreneurial motivations of individuals usually relate to which of the following factors?
the environment, the venture, the entrepreneur
The comprehensive feasibility approach is closely related to
the preparation of a thorough financial plan
A product does not have to be patented in order to be introduced into the marketplace.
True
Feasibility analyses include technical, market, financial, organizational, and competitive analyses.
True
In a lifestyle venture, independence, autonomy, and control are the primary driving forces.
True
The growth pattern of sales is critical for an entrepreneur to make correct forecasts.
True
The type of venture that is expected to attract venture capital would most likely be a
high-growth venture.
A common human resource problem is
inflated owner ego.
Financial considerations play a major role in
smaller profitable ventures.
Functional design of the product and attractiveness in appearance are an aspect of
technical feasibility.
Which evaluation method enables an entrepreneur to judge the potential of the business?
the profile analysis
Which of the following are questions an entrepreneur can ask to gain insight into the viability of a venture?
All of the above are correct. (Is it proprietary? Is the potential market large? Are the initial production costs realistic?)
Two important factors classified as managerial that could be a cause for failure include human resource problems and the concept of the team approach.
True
When premature entry into the marketplace causes the failure of a new venture, it can be termed
poor timing.
The results of a profile analysis enable the entrepreneur to judge
the potential of the business.
Obtaining external financing is considered one of the major types of problems for a new venture during its first year.
True
Pricing becomes less of a concern when customers become aware of a product's unique characteristics that are superior to the competition.
True
Proper understanding of the market will help an entrepreneur avoid failure with a new venture.
True
Since the mid-1990s, the number of new start-up ventures has been approximately 1500 per day.
True
The maverick entrepreneur who avoids reaching out and finding help is a myth of the past.
True
A feasibility criteria approach focuses strictly on the financial feasibility of a new venture.
False
With a nonroutine venture, the initial innovation will maintain the company's competitive advantage without new technology.
False
During the prestart-up phase of a new venture, which of the following are among the crucial five factors for success?
uniqueness of venture and expected growth
Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by:
using less debt as initial financing and generating revenue in the initial stages.
Surprisingly, growth of sales is generally not considered a critical factor in assessing new ventures.
False
The decision of an entrepreneur to ignore the market is a safe one if he or she is sure that the idea will be a success.
False
Which of the following are key questions to ask when screening an idea?
Is it proprietary?
Many entrepreneurs lack
venture uniqueness.
Lack of finished product availability can affect
both a and b. (the company's image and the success of any venture)
Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business.
True
The amount of capital required to start a new venture .
can vary considerably depending upon the industry
Independence and autonomy are the major driving forces behind which of the following types of ventures?
lifestyle ventures
Many entrepreneurs lack _____ for their new venture.
objectivity
General sources for a market feasibility analysis include
pricing data.
In recent studies of new venture problems, dominant problems during the growth stage were related to
sales/marketing
Hiring and promotions on the basis of nepotism rather than qualification fall under the managerial problem of
the concept of a team approach.