Entrepreneurship Test #1 Chapters 1, 2, and 3
Operation Section of Business Plan
you should explain how the business will be managed on a day-to-day basis and discuss hiring and personnel procedures
Which of the following would not be considered a mistake when preparing a business plan
spending time studying the competition
Command Economy
the government determines what how and for whom products and services are produced
When you make an economic choice, the value of the next-best alternative (the one you pass up) is called
the profit motive
The Appendix
to the business plan includes supporting documents that provide additional information and back up statements made in the body of the report
Briefly discuss the economic impact of limited resources
The impact of limited resources is often not good because whenever you running out of something, most of the time it is not good. We used resources for many things, some limited resources are very valuable to us and it would not be good if we ran out of them. We would have to come up with new ways of doing certain things.
Successful entrepreneurs tend to have all of the following characteristics except
They prefer to have someone else do the work
Entrepreneurship
an act of someone who is taking a risk to run and start their own business
The part of a business plan comes after the main body
appendix
Economic wants
are the basis of the economy
Economic Resources
are the means through which goods and services are produced
Your needs
are things that you must have in order to survive
American Entrepreneurs
create products that change the way people live and conduct business
Products you can see and touch are called
goods
A Business Plan
is a written document that describes all the steps necessary for operating a successful business
A self-assessment
is an evaluation of your strengths and weaknesses
Identification of Risks
is not an element of the financial section of a business plan
Scarcity
occurs when people's needs and wants are unlimited and the resources to produce the goods and services to meet those needs and wants are limited
Why are good communication skills are important in the problem-solving process
Good communication skills help you communicate the problem to the problem maker and other people
Banks and investors make financing decisions about new businesses based on
How well they think the business can meet its objectives
What are the three basic components of a business plan
Introduction Main body Conclusion
What are factors of production?
Land Labor Capital
Name the four functions of business
Marketing Operations Human Resources Finance
Name two major factors that can help a business succeed
Operation skills if you are disorganized and if you have bad employees the customer won't want to come to your business. Advertisement skills you have to get your name out there
What is the first of Maslow's needs must be satisfied?
Physiological
Samantha needs $160,000 to start her new business. Her parents have agreed to invest 10 percent of the amount in Samantha's business. She intends to invest $90,000 of her own funds. How much more does she need to borrow?
$54,000
If you intend to borrow 25 percent of the $75,500 you need to start a business, how much of your own funds are you investing
$56,625
Using the six steps of the formal problem-solving model develop a solution to this situation: Scenario: You are just starting your business and very few people know about it. You have very little money and time to get the word out since you are putting all your time and money into the business to get it going. You know that the more people who know about your business the more successful it will get. What are you going to do?
1.Need to get my name out there 2. Need customers 3. Newspaper. Flyers, Facebook and other social media pages. 4. Flyers and Social Media Pages 5. Make and print out flyers and put them everywhere around town inviting people to come see what your store has.Make social media pages and invite people to like or follow them, update frequently. 6. Evaluate and see if that helps you get customers and if that doesn't help try something else.
The rivalry among businesses to sell their goods and services is called
Competition
The appendix to a business plan would likely include
A copy of the owner's resume
Why should your business plan include information and data from objective sources
Because they will not be bias and will tell you what they really think without worrying to much about your feelings because they don't know you on a personal level
Briefly identify four ways a business plan is important to an entrepreneur
Can help be a guide Help get investors Helps you set goals for the near and long future Helps create a picture of what you want for your business
Name the four principles on which the U.S. economic system is based
Choice Market/Free Market Private Property Freedom of Choice Profit Competition
An individual's need or desire for a product or service at a given price is called
Demand
Under which economic system does entrepreneurship function the best? Why?
Free Choice/Free Market because you for the most part get to make all of your decisions as long as they are legal
People who work for someone else are called
Employees
Generally considered a disadvantage of entrepreneurship
Entrepreneurs must make all decisions by themselves
The Small Administration is made up of what
Executives who volunteer their time to provide entrepreneurs with real-world advice and know-how
A business with many variable costs is a higher risk than a business with mostly fixed costs, because fixed costs will be incurred regardless of the level of sales
False
An entrepreneurs create more goods and services, consumers have fewer wants and needs
False
Both employees and entrepreneurs are equally affected by the consequences of the decisions made on the job
False
Entrepreneurs do not need good teamwork skills, because they are the ones calling the shots
False
Experienced entrepreneurs do not need business plans. Only those who are starting their very first business need them
False
I will learn more about starting a dog-walking business, is a good example of a SMART Goal
False
Only advanced economies have the resources necessary to satisfy everybody's unlimited needs and wants
False
The executive summary should be written before the main body of the business plan has been completed
False
The most successful entrepreneurs make decisions based on their intuition or "gut feeling" about a situation
False
Explain what should be included in the marketing section of a business plan
Pricing to be in line with the market you are selling to. Sales all the ways of reaching your target audiences. Advertising and Promotion how are you going to get to reach your audience
Which function of business creates or obtains products or services for a business to sell
Production
An organization that exists to help small businesses and their owners is the
Small Business Adminstration
SMART Goal
Specific Measurable Attainable Realistic TImely
Do not be afraid to identify potential problems and risks in a business plan
True
Handwritten business plan are not acceptable, all business plans, must be word processed and printed on standard-sized white paper
True
Many businesses fail because the owner lacks business knowledge
True
Monopolies usually exist because of barriers that make it difficult for new businesses to enter the market
True
Sometimes a business opportunity arises from a discovery or invention
True
The problem-solving process is not complete until you evaluate your action, since even a well-thought-out solution may not work
True
To avoid inconsisten cies, it is a good idea to have an objective person review your final business plan before you show to investors
True
Your business plan is your best opportunity to let other people know what you want to do with your company
True