Entrepreneurship test 1

Some communities offer facilities that house new businesses and provide resources for them. These are called ________. temporary business agencies incubators holding facilities small business resource centers

incubators

The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion. linear; process linear; interactive process; interactive interactive; linear

interactive; linear

Which of the following is not included in the second column of labeled categories in a gap analysis? finances nonfinancial resources inventory resources time

inventory resources

Small companies have flourished in the United States because they respond more quickly to their customers' needs. have better organizational policies and procedures. employ more skilled people than larger businesses. often expand easily in mature industries.

respond more quickly to their customers' needs.

Which of the following types of firms do business incubators work best with? tobacco products retail stores scientific firms restaurants

scientific firms

Which of the following is not a characteristic of a high-growth venture? It usually hires a relatively large number of employees. It often hires an experienced president to grow the company. It is designed to reflect the mission of the founder. It has a well-developed organization structure.

It is designed to reflect the mission of the founder.

During the 1970s and 1980s, the ________ occupied the dominant economic position in the world. Americans Germans Russians Japanese

Japanese

Identify a true statement about the potential founder of a new business. An entrepreneur must avoid involving his or her family in a new venture, because such a partnership has a negative impact on the running of the business. An entrepreneur must quickly act on any opportunity he or she identifies to maximize profits. The founder of a new business needs to be intimately involved in its designing, funding, and running. An individual who wishes to start a new business should not confine himself or herself to generating ideas based on skills he or she already has.

The founder of a new business needs to be intimately involved in its designing, funding, and running.

Identify a true statement about a large firm that has organizational slack. Each employee is crucial to the survival of the firm. The firm enjoys extreme financial flexibility and can survive huge annual losses if necessary. The firm's knowledge is concentrated around a few key personnel. The loss of an employee barely affects the abilities of its workforce.

The loss of an employee barely affects the abilities of its workforce.

T/F Alexis de Tocqueville, the French statesman, stated that "the United States was not so much a nation with ventures ... but instead a nation of innumerable small ventures."

True

T/F Close to 50 percent of the millionaires in the United States are entrepreneurs.

True

T/F Future business owners need to understand how their own version of rationality affects their decision making.

True

T/F Having very little to lose financially by a failure could be a trigger for a new business.

True

T/F In the context of the triggers that encourage new business formations, circumstance motivators tend to result in more of a defensive positioning.

True

T/F Potential entrepreneurs often overlook family experiences as a source of knowledge and skills.

True

T/F The Myers-Briggs test is used for personality evaluations.

True

T/F The philosophy of the Enneagram test is that a person is the result of all the experiences in his or her life.

True

T/F Threats to operational financing states that there are a number of obstacles to a new venture in obtaining the necessary financing for its growth.

True

What term is used to describe Walmart's ability to purchase more advertising space at a lower cost per ad? buying bonus volume excess volume excess economies of scale

economies of scale

The potential entrepreneur needs to consider ________ when starting a new business. prior experience capital education rationality

prior experience

T/F A small business's harvest plan is to put the profits back into the company.

False

T/F A venture capital start-up is oriented toward the personal goals of the founder(s).

False

T/F According to Thomas Stanley and William Donko in their book The Millionaire Next Door, 50 percent of the millionaires in the United States are self-employed.

False

T/F Firms that have low initial capitalization have an opportunity to grow faster.

False

T/F Gap analysis involves identifying an opportunity between the demand for a product or service and the availability of the product or service that you can buy from vendors to be resold to your customers.

False

T/F The first step in developing a quality business idea is to analyze the market.

False

The term ________ refers to the fact that women, like minorities, may be hired by large firms but experience limits placed on their advancement. "glass cliff" "grapevine" "androcentric" "glass ceiling"

"glass ceiling"

Which of the following is a characteristic of a venture capital start-up? The start-up is organized according to the image of the founder(s). The number of employees is not expected to be more than 50 to 100. An experienced president is hired to grow the start-up. The start-up is funded by the founder(s)

An experienced president is hired to grow the start-up.

Identify a true statement about gap analysis. A gap analysis requires extensive research. A gap analysis should be completed in a short period of time. One should ignore the financial requirements and the nonfinancial resources that a business needs when doing a gap analysis. The first column in a gap analysis includes a realistic estimation of an individual's personal resources.

A gap analysis should be completed in a short period of time.

________ states that individuals make decisions that maximize their own individual benefits. Self-fulfilling prophesy Organizational benefit theory Agency theory Individual benefit theory

Agency theory

All of these are potential issues for an owner in a family business except All of these choices are correct. promoting a family member. firing a family member. reprimanding a family member.

All of these choices are correct.

What does a potential entrepreneur need to consider when starting a new business? All of these choices are correct. prior experience personality orientation risk tolerance

All of these choices are correct.

You should not use a cookie-cutter business plan program because All of these choices are correct. a good plan is best developed by the individual contemplating the business, not by a paid consultant. potential investors are often family members, which makes it critical that the entrepreneur seeks to ensure the chances of success by doing thorough planning and thinking. each business plan should have its own voice, feel, and presentation.

All of these choices are correct.

Identify a true statement about the process of generating new business ideas. Entrepreneurs should focus on generating ideas and funding a new business based on them, but they must not become personally involved in its success. As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful. While generating business ideas, an entrepreneur needs to focus on exploitable market trends rather than use personal experience to inform the process. Family is generally the best source of ideas for a new business.

As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful.

During Eisenhower's presidency, who stated that "what is good for General Motors is good for the nation"? Henry Ford Charles Wilson Franklin Roosevelt Andrew Carnegie

Charles Wilson

Which personality test indicates the different ways individuals deal with other people and their environments? Myers-Briggs Big Five Enneagram Insights

Myers-Briggs

Which of the following statements is true about venture capital start-ups? They ensure that the business is oriented toward the personal goals of the founders. They refrain from developing operations in multiple locations very shortly after the initial investment. They are funded by angel investors who invest more than $2 million and expect extraordinary returns. They have a management structure designed to take advantage of the skills of the founder or founders.

They are funded by angel investors who invest more than $2 million and expect extraordinary returns.

Which of the following is a difference between large organizations and entrepreneurial businesses? Unlike large organizations, entrepreneurial businesses are burdened by policies, procedures, corporate layers of management, and public stockholders. Unlike entrepreneurial businesses, large organizations will regularly ignore business opportunities if they fail to believe the results will generate high profits. Unlike large organizations, entrepreneurial businesses do things more efficiently because they are easily able to achieve economies of scale. Unlike entrepreneurial businesses, large organizations have a better understanding of the local community in which they conduct business.

Unlike entrepreneurial businesses, large organizations will regularly ignore business opportunities if they fail to believe the results will generate high profits.

In the context of risks to new businesses, identify a true statement about risk tolerance. In new markets, entrepreneurs must be willing to put up with risks that outweigh their personal risk tolerance. Risks must be determined by entrepreneurs based on the findings of focus groups with other entrepreneurs in the same industry. What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances. Entrepreneurs can avoid a majority of the risks associated with new start-ups by allowing competitors to invest in their new businesses. Explanation

What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.

A small business owner must possess all of the following except an in-depth understanding of the market. a sequential formula. passion for starting a business. necessary skills to run the business.

a sequential formula.

Years ago, economists mistakenly predicted that small businesses would replace bigger businesses. be replaced by franchises. be replaced by a smaller number of big businesses. replace franchises.

be replaced by a smaller number of big businesses.

In the context of supports for new businesses, why are established businesses often hesitant to buy from a start-up business? because the supply structures of established businesses are resistant to incorporating new supply sources because it is more profitable for established businesses to fulfill any requirements through resources already present within their organizational structures because it is not clear if the new business will be able to fulfill an order or service a product in the future because small businesses are typically family-run establishments, making them unreliable in the long run

because it is not clear if the new business will be able to fulfill an order or service a product in the future

Why can a small business owner make decisions quicker than a big business? All of these choices are correct. because the decision maker is both the owner and the manager of the business because managers in big businesses have less knowledge than a small business owner because the owner can delegate the decisions to committees

because the decision maker is both the owner and the manager of the business

In the context of business risks, how can an entrepreneur identify competitors to a new potential business? by observing what potential customers do to satisfy their current needs or wants by conducting a brainstorming session with other entrepreneurs by observing the market and identifying companies that have seen the maximum growth in the past quarter by performing a gap analysis evaluation to identify potential competitors

by observing what potential customers do to satisfy their current needs or wants

While developing a quality business idea, what should potential business founders ideally do after evaluating their personal skill sets? propose a business idea to potential investors brainstorm for potential business ideas with family interview successful entrepreneurs to generate business ideas carefully analyze the market and look for a gap

carefully analyze the market and look for a gap

Threats to ________ are threats to the new business in financing its growth, including high development cost. operational financing profit margins sales generation schemes deficit gaps

operational financing

A type of gap analysis that compares the possibilities in the marketplace with an individual's competence to address those gaps is called opportunity analysis. descriptive analysis. predictive analysis. market analysis.

opportunity analysis.

Which of the following can be a threat to operational financing? a team with a high asset base low development costs low inventory needs swift expansion plans

swift expansion plans

Which of the following is not a personal motivation for an individual to start a business? willing to make career-changing moves feeling driven to achieve goals taking a defensive position being proactive

taking a defensive position

Which of the following personality tests was developed by two independent research teams who analyzed data collected from thousands of people? the Enneagram test the Myers-Briggs test the Big Five test the DISC assessment

the Big Five test