Entrepreneurship - FINAL

The ________________________, sometimes called the profit and loss statement, reports the profitability of the business for a specified period of time.

Income Statement

This financial statement shows a summary of income and expenses over a given time period. In addition to cash income and expenses, it takes into account non-cash expenses like depreciation. This statement is called a ______________ ________________.

Income Statement

The first step in successful ________________ is understanding the consumer's motivations and decision-making processes.

Marketing

TRUE/FALSE Entrepreneurial opportunities can be generated from things, events or objects that bother someone.

True

TRUE/FALSE Entrepreneurs need to be able to come up with logical ways to solve problems.

True

TRUE/FALSE Equipment installation costs are included in start-up costs.

True

TRUE/FALSE Financial Statements commonly prepared by a business include an income statement and balance sheet.

True

TRUE/FALSE For owners of small businesses, extremely long hours of 70, 80, or even 100 hours a week, and rare vacations, are often the rule rather than the exception.

True

TRUE/FALSE Ownership of portion of a business is called Equity.

True

TRUE/FALSE Problem solving involves creative and critical thinking skills.

True

TRUE/FALSE Psychographics is the study of buyer's attributes relating to personality, values, attitudes, interests, or lifestyles

True

TRUE/FALSE The Accounting Equation may be expressed as Assets-Liabilities=Owner's Equity.

True

TRUE/FALSE The vast majority of radical innovation occurs in new and smaller firms.

True

TRUE/FALSE Using low-cost or free techniques to minimize your cost of doing business is called bootstrapping.

True

The four P's of marketing are: a. Product, price, place, promotion b. Presence, profitability, portability, product c. Positioning, positive cash flow, performance, placement d. Potential, position, positive top-of-mind, principal

a. Product, price, place, promotion

A startup can be very difficult to finance because there are no pre-existing __________ to pledge.

assets

The financial claim by owners on the total assets of a business, calculated as total assets minus total liabilities. a. Credit b. Net Worth c. Bankruptcy d. Financing

b. Net Worth

Every business hopes to have a core of ______________________________________.

brand-loyal consumers

Which of the following methods will yield the greatest amount of emotional data when collecting market research data? a. Postage paid return post card survey b. Telephone interviews c. Face to face visits d. Questionnaire

c. Face to face visits

The funds left over after accounting for the cost of goods sold is called: a. Net Income b. Liabilities c. Gross Profit d. Operating Costs

c. Gross Profit

All of the following are considered marketing research "who's" except _______ a. User b. Influencer c. Neutral d. Decision-maker

c. Neutral

Advertising, insurance, rent and utilities are all considered: a. Gross margin factors b. Unanticipated expenses c. Operating costs d. Cost of goods

c. Operating costs

Successful entrepreneurs are not gamblers; they take________________.

calculated risks

Your _______________________ can be a picture, text, or a combination of the two that makes consumers think of your business.

logo

A cash flow statement is: a. a portion of the profits distributed to owners b. a statement of net income or net loss for a specific period of time c. cash receipts minus cash disbursements during a defined period of time d. a summary of assets, liabilities and owners equity

c. cash receipts minus cash disbursements during a defined period of time

Sarah invested $100 in her brother's coffee shop. The coffee shop was successful within two years. Her brother paid her $200 for her share of the business. Sarah's return on investment rate was: a. 200% b. 25% c. 50% d. 100%

d. 100%

All of the following are ways to protect your ideas except: a. Trademarks b. Patents c. Copyrights d. By-laws

d. By-laws

The legal structure of a new venture is typically described in detail in which section of the business plan? a. Finances b. Executive Summary c. Marketing d. Management

d. Management

The dollar amount of a loan outstanding at a point in time, or the portion of a payment that represents a reduction in loan balance. a. Financing b. Interest c. Asset d. Principal

d. Principal

The body of the income statement consists of an itemized list of a. Assets and Liabilities b. Assets and Owner's Equity c. Cash and Revenue d. Revenue and Expenses

d. Revenue and Expenses

The EXECUTIVE SUMMARY of a business plan should include all of the following except: a. Description of the business b. Unique features and proprietary rights c. Market potential d. Team member resumes and detailed background

d. Team member resumes and detailed background

For a successful entrepreneur, seeking and using ______________ is central to the habit of learning from mistakes and setbacks, and of responding to the unexpected.

feedback

Bootstrapping can create significant competitive advantages.

True

TRUE OR FALSE Entrepreneurs are the mechanism by which our economy turns supply into demand.

True

TRUE OR FALSE Entrepreneurship is the process of getting into and operating a business of one's own.

True

TRUE OR FALSE Entrepreneurship is the process of starting, opening and growing a business.

True

TRUE OR FALSE Failure is part of the dynamics of innovation and economic renewal.

True

TRUE OR FALSE Most entrepreneurs find themselves working long hours, especially during the start-up period of the business.

True

TRUE/FALSE A break-even analysis helps analyze costs and the level of sales needed to cover costs.

True

TRUE/FALSE Business sources of capital could include inventory financing.

True

TRUE/FALSE Cash flow is not the same as profitability.

True

TRUE/FALSE Creative ideas can be generated from the world in which a person lives.

True

TRUE/FALSE Current ratio is calculated as current assets divided by current liabilities.

True

TRUE/FALSE Debt-to-asset ratio is calculated as total liabilities divided by total assets.

True

TRUE/FALSE Each person can be inspired to generate new uses for a common everyday object such as a pencil, plastic milk jug, pop bottle.

True

TRUE/FALSE Money borrowed with the understanding that it will be repaid is referred to as Credit.

True

TRUE/FALSE Venture capitalists may provide financing in exchange for an equity position in the business.

True

Start-up costs differ from operating costs as follows. a) Start-up costs happen once in a business life. b) Start-up costs are annual expenses. c) Start-up costs are usually paid with investor resources. d) Start-up costs are tax free.

a) Start-up costs happen once in a business life.

The items and property owned or controlled by an individual or business that have commercial or exchange value. Items may also include claims against others. a. Assets b. Liabilities c. Bond d. Credit

a. Assets

The term used to describe money invested in anticipation of return over a long period of time as used in capital assets, capital investments, and capital improvements. a. Capital b. Liability c. Depreciation d. Loan

a. Capital

Maria buys soda in six can units for $.40 each. She sells the cans of soda individually through her catering business at $.80 each. Maria's pricing strategy is: a. Key stoning b. Optimizing c. Leveraging d. Journalizing

a. Key stoning

The amount of funds left over after operating expenses for a business is called: a. Net Income b. Liabilities c. Gross Profit d. Operating Costs

a. Net Income

Financial obligations of a business a. Assets b. Liabilities c. Bond d. Credit

b. Liabilities

In market research, the term "demographics" means: a. The process of deciding who will buy a product or service. b. Numeric facts about particular groups of people. c. Price, product, placement, and positioning.

b. Numeric facts about particular groups of people.

Sherylann meets with her potential customer face to face. She explains the unique features and benefits the prospect will enjoy if they switch to her quick-printing service. The process she is using is: a. Marketing b. Selling c. Positioning d. Up-selling

b. Selling

When selecting insurance coverage, which statement is typically correct? a. The more the deductible, the higher the premium b. The more the deductible the lower the premium c. The more the deductible, the less the coverage d. The higher the deductible, the better the coverage

b. The more the deductible the lower the premium

The ____________________________ is a snapshot of your business, including its assets, liabilities, and capital.

balance sheet

The _____________________________________ is a snapshot of your business, including its assets, liabilities, and capital.

balance sheet

Which of the following documents is most analogous to a business plan of a high-potential venture? A) A blueprint B) A roadmap C) An investment contract D) A 'How To' manual

A) A blueprint B) A roadmap

_____ Which of the following two statements have a better chance of spurring creativity? A.Can we put it to other uses? B. We've never done anything like that before.

A.Can we put it to other uses?

Short Answer/Essay: Compare and contrast the advantages and disadvantages of being an employee verses an entrepreneur? Complete each of the four sections below. · Describe the advantages of being an employee. · Describe the disadvantages of being an employee. · Describe the advantages of being an entrepreneur. · Describe the disadvantages of being an entrepreneur.

Analysis Response - Evaluate advantages and disadvantages of entrepreneurship and explain your reasoning

Would you rather be an entrepreneur or an employee? Explain your reason.

Analysis Response - Evaluate advantages and disadvantages of entrepreneurship and explain your reasoning

Give an example of how the entrepreneur, Henry Ford, responded to society's wants and then ended up changing society and creating more wants.

Answers will vary, but might be something like the following: Henry Ford responded to society's wants of improved transportation or traveling made easier for the individual. The invention of the motor vehicle has changes society immensely by having us become a more mobile society, traveling to jobs miles away from our home or neighborhood, traveling hundreds of miles in one day. Society then has kept creating more wants in a vehicle, such as electric windows seats and doors, warmed seats, air conditioning, VCR and DVD players in motor vehicles.

You are considering opening a coffee house in a fast growing urban area. Identify three sources you could use to find out about nearby competitors:

Any three reasonable sources, but typically you could expect the following: · Yellow pages · Suppliers · Potential customers · Business directories · Local business associations (Food service association) · GPS systems

Identify three elements of a positioning strategy.

Anything that leads the customer to their perception of your brand or product in relation to competing brands. Anything that establishes your image. Mission Statement, Market Category, Customer Pain Points, What makes you different, Brand Identity, Vision, Product Positioning Statement etc.

List 6 of your personal characteristics that relate to the study of entrepreneurship and assess how each might affect your success as an entrepreneur.

Assess your own individual entrepreneurial characteristics.

Dr. Schrag owned the following Assets as of January 1st: Cash $6,600 X-ray-Equipment $9,000 Office Equipment $3,500 Laboratory Equipment $3,000 Top Flight Office Equipment $3000 Bowlus Office Supplies $1000 Forsyth Gas Company $2200 Compute the following Assets_________________ = Liabilities______________ + Owner's Equity______________

Assets = 22,100 --- Liabilities = 6,200 --- Owner's Equity = 15,900

The relationship between the three basic accounting elements: ____________________, ________________, and ______________________, can be expressed in the form of a simple equation known as the accounting equation.

Assets, Liabilities, Owner's Equity

What is at the heart of the entrepreneurial process? A) Innovation and creativity B) Opportunity recognition C) Team work D) Marshaling resources

B) Opportunity recognition

Being opportunity-focused means never lose sight of what? A) Competitive advantages B) The customer and the marketplace C) The economic and funding metrics of the venture D) Distinctive competencies

B) The customer and the marketplace

A financial statement that shows a listing of all assets and liabilities at a given point in time is called a ___________ ___________.

Balance Sheet or Net-Worth Statement

Which of the following is not a persistent myth about entrepreneurs? A) Leaders are born, not made B) Entrepreneurs are gamblers C) Solo entrepreneurs limit their potential for growth D) Entrepreneurs should be young and energetic

C) Solo entrepreneurs limit their potential for growth

_____Which of the following is a barrier to creativity? A. Seeing many "correct" answers B. Being illogical C. Fearing mistakes/failure D. Believing you are creative

C. Fearing mistakes/failure

A financial statement which shows just cash money flowing in and out of the business is called a ___________ ____________.

Cash Flow Statement

A startup will require significant time to become established and thus provide positive ______________________.

Cash flows

Most entrepreneurs launching businesses, particularly the first time, run out of what quicker than they bring in customers and profitable sales?

Cash.

An accountant cannot be a(n) _____________________________ until meeting the state's requirements where he/she plans to operate.

Certified Public Accountant (CPA)

TRUE OR FALSE Entrepreneurship does not occur in the public sector.

False

TRUE/FALSE A mortgage on an office building is an example of an asset.

False

TRUE/FALSE Innovation and creativity cannot be taught and/or learned.

False

TRUE/FALSE Problem solving and ethics are unrelated in an entrepreneurial endeavor.

False

TRUE/FALSE The best opportunities are focused enterprises; what you start out to do is what you end up doing.

False

TRUE/FALSE The foremost purpose of a business plan is to secure financing for the new venture.

False

TRUE/FALSE While very important to the business owner, the business plan does not need to include cash flow projections

False

TRUE/FALSE Assets that will be used or converted into cash within one year are called Long Term Assets.

False Current Assets

A balance sheet, income statement, statement of changes in net worth and statement of cash flow, which are used to measure the financial condition of a business, are all called

Financial Statements

Describe the components of the marketing mix.

Product, Price, Place, Promotion

All of the following are characteristics of a free enterprise system except: a. Anyone can start a business b. Resources are controlled by the government c. Plenty of competition d. Consumers have choices

Resources are controlled by the government

Compare and contrast these two statements and give at least two reasons why that thinking might affect the chances of someone becoming an entrepreneur: Can we put it to other uses? We've never done anything like that before.

Answer: 1. "Can we put it to other uses?" spurs creativity and helps a person think "outside the box." 2. "We've never done anything like that before" puts up a road block to thinking in a new way to encourage creativity. It is a barrier to creativity.

The following entrepreneurs just completed a seminar in bootstrapping. Some of them listened well, while others must have slept through the training. Which ones did well? a. Jennifer offered to clean her neighbor's garage if the neighbor, an artist, would paint a sign for her? b. Jerre cleaned out a corner of her basement to set up her office. c. Milt figured he was well worth the $10,000 a year salary he paid himself from his part time business. d. Gil was running short of cash so he got a cash advance from one of his credit cards.

Answer: a. yes b. yes c. no d. no

Latinos are the fastest growing group in the USA. You are studying the potential of a sports equipment and clothing store. The store will be located in a suburban Texas community. When studying Latinos as potential customers for your store, identity three questions you would ask to better understand the potential Latino buyers actions:

Answer: (Any set of reasonable answers. Here are a few) · What sports do your family play? · Where do you currently purchase sports equipment and clothes? Why do you shop there? · When it comes to sport-team logo wear (sweatshirts, t-shirts, caps) what three teams are your favorites? · How much do you spend on children's (ages 1-14) clothes monthly? · What sports do your family watch on TV?

How does a business type affect the sources of start-up capital?

Investors want to minimize risk while maximizing profits. Entrepreneurs must decide if the investor is product or market orientated and then write the plan that quickly, efficiently and realistically addresses the expertise of the investor.

__________________Is a form of communication designed to reach a large number of people.

Mass media

Which of the following should receive first consideration in the opportunity screening process? a. The Product b. The Financials c. The Market d. Depends on the opportunity

c. The Market

You are preparing a comprehensive business plan for your venture. What types of evidence can you provide that shows a strong and effective entrepreneurial team?

Answer: Any reasonable response. Here are a few typical or expected responses: · Individual team members have worked together at a previous business · Individual team members have association or state or national certifications within the industry. · Team members have worked together on non-profit or profit making boards. · Team members were competitors within the industry.

Brainstorm two entrepreneurial ideas out of reusing or recycling blue jeans into a new product that can be used for soldiers in a hot climate during the day and a cool climate at night. Explain your ideas to the best of your ability.

Answers vary but might include: 1. Making them into rag blankets to keep the troops warm at night. 2. Making them into bags to carry supplies at their camp.

Identify one hobby, talent or interest you have that could translate into a business opportunity. Explain your answer.

Answers will vary

Explain how creative thought might help the entrepreneurial process. How could working with a group of people help and hinder solving the puzzles or thinking creatively about an entrepreneurial idea? Help: Hinder:

Answers will vary but may be something like this... 1. Help: Having more people helped us get more ideas. Having more people helped us bounce ideas off of one another, which helped us keep being more creative. 2. Hinder: People might want to solve it their way and not listen to others. They might say inhibiting creativity statements.

Analyze the following description of entrepreneurial characteristics. o "Entrepreneurs like to take risks to the extreme of being reckless. They seek opportunities that may offer a challenge even if it involves an unreasonable chance of success."

Answers will vary but should be something like the following statements. This description is only partially true. Entrepreneurs do like to take risks however, not to the extent of being reckless or being involved with unreasonable chances for success.