Intro to Business Ch 7 review
people who risk their time, money, and other resources to start and manage a business
entrepreneurs
Bertha runs a fashion boutique. She prefers to personally interact with her customers to gauge the styles that would suit their personality. Her customers also prefer talking to her in person to share their preferences in colors, designs, styles, and fabric as they value her suggestions. The opportunity of _____ is highlighted in the given scenario.
providing personal customer service
Rudy, a food truck owner, has sizable followers on his website where he personally interacts with them and thanks them for their support. He also lets his followers know his location and the menu for a day in advance. The opportunity of _____ is highlighted in the given scenario.
providing personal customer service
Which of the following is an advantage of starting a business from scratch?
You do not have to deal with a prior owner's bad decisions
Which of the following is an intimidating obstacle that small businesses face?
High health insurance costs
Which of the following is a threat that a small business is most likely to face?
High risk of failure
The primary reason people choose to become entrepreneurs is to:
earn more money
an organization-affiliated with the SBA- that provides free, comprehensive business counseling for small business owners from qualified volunteers
SCORE (Service Corps of Retired Executives)
Which of the following statements is true of starting a business from scratch?
hard to get credit from both lenders and suppliers
Olivia runs a spa for women. She employs only two helpers and one receptionist. This enables her to focus most of her resources on procuring products required to provide comfort and high-quality services to customers. The opportunity of _____ is highlighted in the given scenario.
having lower overhead costs
Robert started his company in his parents' garage because he could not afford to rent an office space. Most of his finances were spent on procuring the essential items to set up his company. As a result, he was able to save funds for the future. The opportunity of _____ is highlighted in the given scenario.
having lower overhead costs
Technological tools such as the Internet and email have:
made it easy for small business owners to manage their firms on the go
In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?
Angel investors are wealthy individuals, whereas venture capital firms are companies.
Natalie is a professional baker who dreams of owning her own cake business. She does not have any ideas or concepts for starting a cake shop, but her wealthy uncle is ready to fund her initial capital. Natalie's risk appetite is low and she wants to run a business that has less than 10 percent chances of first-year failure. Which of the following could be the best solution for Natalie to pursue her dream of owning a cake shop?
Buying a cake shop franchise
Maurice wants to make a documentary film on the unequal distribution of money in the world and its effect on different social classes. Instead of approaching a production house, he creates a website for the project where he pitches his idea through a short video and requests the viewers to donate any amount of money to cover the production cost. In the given scenario, which of the following is Maurice using to get the capital for his film?
Crowdfunding
___ is the process of funding ventures by raising money from a large number of investors via the Internet.
Crowdfunding
Gemini Inc., a large conglomerate, offered Timothy's new logistics company the much required financial support in exchange for a 40% ownership in the company. It also provided Timothy with an experienced group of people to help him make crucial decisions for the company. In the given scenario, which of the following statements is true of Gemini Inc.?
It is a venture capital firm
Suresh quits his nine-to-five job at a multinational company and starts his own event management company. In his new company, he does not practice a nine-to-five work regime. Instead, he organizes meetings with clients by making appointments that favor his schedule. Which of the following advantages of entrepreneurship is highlighted in the given scenario?
Flexibility
Wendy quit her job as the regional manager of Rubicon Inc., a multinational company, and started her own fashion boutique. Within two years, she began earning more than what she earned during her tenure at Rubicon. Which of the following advantages of entrepreneurship is highlighted in the given scenario?
Greater financial success
Which of the following is a drawback of buying a franchise?
If the national brand suffers, so does the business (Halo effect)
Maude worked as a lead animator in an animation company. However, she could not exercise her freedom while working on projects because she was bound by the decisions made by the company. Fed up with this, Maude quit her job and started an animation firm where she accepts only those projects that allow her free rein in terms of creativity. In the given scenario, Maude most likely started her own firm because it offered _____.
Independence
Richard, an employee in an investment firm, was dissatisfied with the way his superiors handled business dealings. For that reason, he quit his job and started his own business so that he is able to make all management decisions without interference from anyone. Which advantage of entrepreneurship is highlighted in the given scenario?
Independence
Which of the following is a disadvantage of starting a business from scratch?
It takes sheer sweat equity to build a customer base
David wants to open a new gymnasium with state-of-the-art equipment and qualified trainers. However, he can only afford either of the two. He decides to get the equipment first to start the gym. However, without qualified trainers to operate the equipment, David loses his customers and is forced to shut down the gym. Which of the following threats is most likely highlighted in the given scenario?
Lack of funds
Timothy wanted to start a coffeehouse. However, he could not afford to buy the space to start his business. Which of the following threats is highlighted in the given scenario?
Lack of funds
Margie decided to pursue her passion for cooking. With personal resources to fund her initial capital, she started a food truck in one of the busiest streets of her hometown. After a month of running the food truck, Margie realized that she was not getting enough customers because there were several other similar food trucks in the area. In this scenario, which of the following threats did Margie's business face?
Lack of knowledge and experience
Mohit is very passionate about music and opens a recording studio of his own. However, he does not know much about running a business and within a short period, starts running into losses. Therefore, he shuts down the business. Which of the following threats is highlighted in the given scenario?
Lack of knowledge and experience
Mabel has a business idea of starting a store that would only sell hair products. Although she needs to raise capital to start her business, she does not want to share the ownership of her firm with anyone else. With a good appetite for risk, which of the following financing resources would be most ideal for her to start her business?
Microloan program from the SBA
an agency of the federal government designed to maintain and strengthen the nation's economy by aiding, counseling, assisting, and protecting the interests of small businesses
Small Business Administration (SBA)
local offices- affiliated with the Small Business Administration- that provide comprehensive management assistance to current and prospective small business owners
Small Business Development Centers (SBDCs)
Felix lost his job at an investment firm because of downsizing during a period of recession. To keep himself financially stable, he opened a food truck that became a huge success. Which of the following advantages of entrepreneurship initially motivated Felix to start the food truck?
Survival
In the context of small business opportunities, which of the following statements is true of market niches?
They fail to offer enough potential for small, specialized companies
Identify a true statement about angel investors.
They invest in promising start-up companies because they want to make money
In the context of funding options for small businesses, the _____ assists entrepreneurs by partially guaranteeing loans from local commercial lenders.
U.S. Small Business Administration
Angela runs a fashion boutique for women. Her customers can use an online editing software to create a rough image of the design and style they want Angela to use. The opportunity of _____ is highlighted in the given scenario.
Using technology
Herbert uses prominent social media websites to promote his newly opened restaurant. He constantly posts promotional offers and provides coupons that customers can redeem to avail discounts when they dine in the restaurant. The opportunity of _____ is highlighted in the given scenario.
Using technology
Which of the following funding options provides advice and guidance to start-up businesses along with the funds?
Venture capital
Lois wants to start an art gallery. However, because of lack of adequate funds, she decides to borrow money from a bank. The bank is hesitant to give money to Lois because it cannot verify whether her business would be able to earn enough profit to repay the borrowed amount within the stipulated period. However, after a thorough research, the bank grants her the money. In the given scenario, Lois uses _____ to fund her business.
a loan
individuals who invest in start-up companies with high growth potential in exchange for share of ownership
angel investors
In the context of opportunities and threats, overhead costs for small businesses:
are often lower than big companies
a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.
business plan
Small business start-ups are likely to find that getting commercial loans are:
difficult because lenders are reluctant to give loans to firms that do not have a track record
a small segment of a market with few competitors than the market as a whole. Market niches tend to be quite attractive to small firms
market niche
Rahul owns a guitar store that is famous for customizing guitars. From choosing the wood for the body to the type of pickups, everything can be selected by the customer. This feature attracts beginners and professionals alike to Rahul's store. The specific nature of the business makes it unique and results in fewer competitors. This allows Rahul to choose the prices for his services. The opportunity of _____ is highlighted in the given scenario.
market niches
Tina owns a workshop that specializes in making intricate wooden decorative items. She makes scale models of most of the existing objects around the world. She faces virtually no competition in her business and thus enjoys a stable growth. The opportunity of _____ is highlighted in the given scenario.
market niches
In the context of small business opportunities, because of their size, many small firms can:
offer personal customer service
Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.
personal resources
Which of these is a benefit of buying an established business over creating one from scratch?
the organizational structure is in place
Michael wants to launch a new product. He creates a website specifically for this on the Internet and uploads a short video demonstration of his product on the website. He also appeals to the viewers to make donations to help him start production. People respond well to his idea and help him collect enough financial resources to start his business. The opportunity of _____ is highlighted in the given scenario.
using technology
companies that invest in start-up businesses with high growth potential in exchange for share of ownership
venture capital firms