Chapter 5 - Management 3000E

Which of the following activities is essential to the role of entrepreneur?

Active involvement in operating the business c. Being one's own boss d. Starting a new business venture e. All of these. E

What is the difference between a small business and a business owned by an entrepreneur?

An entrepreneur's business depends upon the personal involvement of the entrepreneur in the day-to-day management of the business; small businesses may not. b. An entrepreneur's firm may be of any size, while a small business must be too small to have a significant impact on its environment. c. An entrepreneur's business must be new, while a small business may have been in existence for any length of time. d. An entrepreneur's business may be privately or publicly owned; a small business must be privately owned. e. All of these

Which of the following pieces of advice is likely to lead to entrepreneurial success, according to your text?

Be flexible in order to take advantage of changing opportunities. b. Work for someone else in your desired field before starting your own business, in order to gain experience and skills. c. Make the new venture your full-time job and devote significant amounts of time to handson management. d. Have enough money to operate for at least six months to one year without any profit. e. All of these. E

Which of these is a correct comparison of large and small businesses?

Big businesses are less efficient at producing and delivering specialty products than small businesses.

Which of the following is a true statement?

Buying an existing business is less risky than starting a new business from scratch.

Four general factors contribute to the success rate of small businesses. Which of the following is NOT one of those factors?

Careful analysis of market conditions

____ has been responsible for recent shifts in the economies of scale in many industries.

Changing technology

Which of the following is a role performed by successful small businesses?

Creation of new jobs

Which of the following is a strategic challenge that faces a small business?

Emphasizing distinctive competencies b. Writing a business plan c. Finding a niche market d. Raising capital e. All of these.

In terms of the number of new jobs formed each year, how does small business compare with big business?

Entrepreneurial business success, more than business size, accounts for most new job creation.

Todd wants to start a new business. With which of the following methods of starting a new business will he pay a share of the income from the business in return for the use of such things as trademarks and business formulas?

Franchising

Hundreds of small businesses under contract make parts for Honda. This is an example of which of the following roles of small businesses?

Importance to large businesses

In times of economic prosperity, small firms are the first to hire additional workers and big firms are last. In times of economic downswings, small firms are the first to eliminate workers and big firms are last. This reflects which attribute of small firms as compared to large firms?

Increased flexibility

Which of the following is an example of a company that has identified a new market?

Low-dose Bayer aspirin introduced into the Chinese market.

Ellie makes handmade gift bags, candles, and jewelry in her spare time and sells them to her friends. Ellie is participating in which industry?

Manufacturing

In which of the following industries are you LEAST likely to find a small business owner performing well due to a lack of economies of scale?

Manufacturing

Which of the following is an example of identifying a new niche in an established market?

Modifying a computer so that it is usable by untrained persons

What percentage of businesses in the United States is classified as small businesses?

More than 90 percent

Which of the following is NOT generally considered to be a role performed by small businesses?

Provision of capital for expansion of large businesses

Madeline's kennel has ineffective advertising. Where should she go for help with a promotion program?

Small Business Institute (SBI

Which of the following is a true statement?

Small businesses are about as likely to innovate as large businesses.

Which of the following is the most common entry method for owners of new businesses?

Starting a new business from scratch

Which of the following is NOT one of the reasons for new business failure described in your text?

Sufficient capital

Kristen was interested in opening a restaurant, but the local market was already saturated. Instead, Kristen decided to begin a business preparing meals directly in customers' homes. Which of the following distinctive competencies of small business is Kristen displaying?

The ability to identify new niches in established markets

Which of the following explains why small businesses are generally more effective than large companies in specialty retailing?

The dollar size of the market is too small for large companies.

If an entrepreneur were considering a new business, which of the following would be a DESIRABLE characteristic of the industry being considered?

The new company will sell a newly patented invention that is not yet well known but is expected to dominate the market.

Why should a new entrepreneur, who has to be careful how she spends every penny, join the National Federation of Independent Businesses (NFIB)?

The organization offers excellent networking opportunities.

Which of the following is the main reason why small businesses experience success in the wholesale industry?

They are able to develop personal working relationships with several sellers and buyers.

____ are a group of small investors seeking to make profits on companies with rapid growth potential.

Venture capitalists

Which of the following questions is important for entrepreneurs who are starting a business from scratch?

Who are my customers? b. Who are my competitors? c. What quantity will my customers buy? d. What price will customers pay? e. All of these. E

Which of the following best describes "crossovers from big business," a term your text uses to describe an important trend in business start-ups?

Workers leave employment at big corporations to found their own businesses.

A written summary of the business strategy and its implementation plan is known as

a business plan.

When an entrepreneur pays a parent company a monthly percentage of the gross income of her business in return for using the parent company's name and products, this is known as

a franchise agreement.

The current trend in business start-ups by women and minority entrepreneurs is

a large increase in the rate of start-ups by women and minorities.

After success in the market for executive pet care, Maverick Pet Partners moved to high energy pets that need runs and fitness training as opposed to just being let out to a fenced yard. MPP identified

a niche.

Amelia Whalen wants to start her own equestrian center from scratch. To determine whether this is a good idea, she needs to find the answers to which of the following questions?

a. Who are my customers, and where are they? b. Who are my competitors, and where are they? c. How can I differentiate my product from that of my competitors? d. In what quantities and at what price will my customers buy my service? e. All of these. E

The definition of "small business" requires that the business's sales and assets

be too small to influence the external environment.

The ____ tells how much money is needed to operate a new business.

cash budget

The aspects of a business that the firm performs at a higher level than its competitors are known as the firm's

distinctive competencies.

The idea that manufacturing costs per unit decrease as the number of units produced increases is known a

economies of scale.

Dr. Ting developed the BPro blood pressure watch. He sold three of his four clinics to finance production. He now sells BPro in Singapore and the United States. He is an example of a(n)

entrepreneur.

Jacques Torres is founder, CEO, and owner of Jacques Torres Chocolate in Brooklyn NY. He is a(n)

entrepreneur.

Venture capital companies typically

exchange money for partial ownership in the new business. b. prefer to work with companies with rapid growth potential. c. want some management control over the new business. d. All of these. D

The most significant disadvantage to franchising as a means of acquiring a business is

high start-up costs.

When revenue from gaming went flat in the US, Wynn Resorts opened casinos in Macau, islands close to China, where gaming was already popular. Wynn Resorts was benefitting from

identifying new markets.

Bill's new business venture is having trouble with employee benefits, and Bill has hired a human resource expert to give advice. The type of new-venture advice Bill is seeking is called

management consulting

There are job scams that target people who need to work from home. They get people to pay $600 for supplies to make jewelry and then rejects everything made as not meeting the company standards. This scam operates in the ____ industry.

manufacturing

Maverick Pet Partners was founded by a NYC lawyer looking for a career change. It caters to the area's executive clientele. MPP found a ____ relating to highly successful and demanding clients.

niche

The Cutting Garden is a flower shop operated out of Carol's living room on main street. It operates in the ____ industry

retailing

Mike Bergen worked in corporate human relations. He left to start his own executive placement firm. He operates in the ____ industry.

services

Service businesses are the fastest growing segment of small-business enterprises primarily because of

size of initial capital investment required.

Jeffrey Gundlach wrote a business plan to start DoubleLine. Later he used it to convince Oaktree, a finance firm, to form a partnership. This type of financing is ____.

strategic alliances

The most important element of a business plan's financial plan is the cash budget, which shows

the expected inflows and outflows of money.

A manufacturing firm with common stock that is publicly traded has 100 employees and $10 million in sales. The firm would not qualify as a "small business," according to the definition in your text, because

the firm is not privately held.

Tesla, an electric car maker, initially had financing with a small group of investors seeking to make profits through rapid growth. Tesla's source of financing was

venture capital.