Pre-Assessment

Having an exciting purpose or "Why" for building your business is important because: It gets you through the difficult times you will often face It appeals to mentors and team members who can help you succeed It attracts and keeps loyal customers who love what you are doing All of the above

All of the above

The best way to build your "Brain Trust" or group of advisors is to: Have your primary mentors help you develop a list of potential advisors and then start networking with these people Become actively involved in your industry: join associations, attend conferences, meet suppliers and vendors, get to know people who have done what you are trying to do, etc. Go places where successful people go: the chamber of commerce, the rotary club, lectures at business schools, school alumni meetings, etc. All of the above

All of the above

The best way to gain knowledge and experience of the industry in which you launch your new business is to: Work in the industry or a related industry for a period of time Frequently use the products and services of the industry Seriously study the industry and ask people who work in it lots of questions All of the above

All of the above

What do you get when you purchase a franchise? A proven business system Ongoing training and development Agreements with vendors and suppliers All of the above

All of the above

When trying to secure debt financing through a bank, the loan officer will carefully examine: Your capacity to pay back the loan you will receive Any collateral you can pledge to secure the loan Your character, education, training, and experience in the industry All of the above

All of the above

Which of the following are types of business models companies use to generate revenue? Manufacturer, wholesaler, retailer, aggregator Discounter, brick and click, franchiser, licenser Direct sales, subscription, cost plus, party plan All of the above

All of the above

When buying an existing company, the most important criterion to examine is: The reason the owner is selling the business Three years of financial statements and tax returns The number and types of customers the business has All of the above are important when valuing a business

All of the above are important when valuing a business

Developing an initial business model is important to your new venture because: It is essential if you apply for grants, loans and competitions It forces you to develop your writing, speaking, and presentational skills It helps you determine if your new business is feasible and if you want to proceed All the above

All the above

When finding resources for a new business, most successful entrepreneurs: Use collateral they have to secure a line of credit from a bank Secure at least two sources of funding before launching their product or service Raise more money than they will need so they won't run out Are masters of efficiency and create something from practically nothing

Are masters of efficiency and create something from practically nothing

Which of the following are NOT sources of equity financing: Friends and family members Private placement and venture capital groups Public stock offerings Banks and credit unions

Banks and credit unions

When using debt financing to grow your business you: Borrow money through credit cards, banks or private lenders, and then pay the money back according to specific terms you agree on Give up ownership in your business in exchange for funds from family members, private investors or venture capital groups Use your own savings and resources, other people's resources, free consulting services, and grow your company with your own cash flow as much as possible None of the above

Borrow money through credit cards, banks or private lenders, and then pay the money back according to specific terms you agree on

Which of the following is the most effective strategy for starting your new business? Get your friends and family members involved because they know you the best Get as much help as you can from the various government programs in your area Keep everything you do as secret as possible so no one will steal your idea Build a low-cost prototype of your product and prove that customers will buy it before you spend a great deal of money

Build a low-cost prototype of your product and prove that customers will buy it before you spend a great deal of money

The main difference between a business model and a full business plan is: A business plan is a brief overview while a business model is a lengthier document A business model helps you decide if your venture is worth pursuing, while a full business plan helps you get funding and support for your venture Successful entrepreneurs write a full business plan first, and typically develop a business model later as their company grows There is really not much difference between a business model and a full business plan

A business model helps you decide if your venture is worth pursuing, while a full business plan helps you get funding and support for your venture

The five most important factors to consider when deciding if you have a true business opportunity are: Industry growth, market size, competition, vendors, distribution channels Legal entity, patents, trademarks, copyrights, trade secrets Funding options, interest rates, investors, cost of goods, operating expenses A genuine need, your experience, resources, buying customers, ability to make money

A genuine need, your experience, resources, buying customers, ability to make money

Which of the following is generally NOT a strong enough purpose for creating an excellent business and sustaining it in the long run? Wanting to meet a need or solve a problem that you are excited about A strong desire to make as much money as you can as fast as you can Doing something that can make a real difference in people's lives Working on products or services that you absolutely love

A strong desire to make as much money as you can as fast as you can

Most successful entrepreneurs start off with: A proven business model they acquire from someone else Adequate funding from a grant, bank, investor or venture capital group A strong purpose, a true business opportunity, and a lot of passion and perseverance. Formal academic training in business, management or marketing

A strong purpose, a true business opportunity, and a lot of passion and perseverance.

Which of the following are components of a sound business model? Title page, table of contents, executive summary Five years of financial projections and return on investment Customer segments, value proposition, distribution channels A detailed analysis of your industry and competitors

Customer segments, value proposition, distribution channels

When bringing full time team members into your company, it is best if you can: Always put critical skills first above everything else when hiring Hold hands before you go steady, go steady before you get engaged, and get engaged before you get married Bring in core team members immediately, even before your launch your venture Always hire friends, family, roommates, and people you know well

Hold hands before you go steady, go steady before you get engaged, and get engaged before you get married

Before building your supporting cast of mentors, advisors, and team members you need to: Have 10 to 20 customers buying your products Resolve all potential problems with your product or service Know exactly what skill sets your business needs to be successful Generate at least $10,000 in sales and be profitable

Know exactly what skill sets your business needs to be successful

The very best way to know if you have identified a genuine need or problem that potential customers have is to: Ask business experts what they think about the situation Read a lot of literature about the need or problem you are exploring Take a class in entrepreneurship at the local junior college or university Line up a number of customers who commit to buy your product or service as soon as you launch your venture

Line up a number of customers who commit to buy your product or service as soon as you launch your venture

An essential requirement for staying in business in the long run is to: Purchase new equipment that will not break down Hire friends and family members who you can trust Make sure your pricing, cost of goods, and expenses allow you to make money Take continuing education classes about important business practices

Make sure your pricing, cost of goods, and expenses allow you to make money

Which of the following is the most common approach to valuing a business that is for sale? Asset appraisal Market value Income potential Discounted cash flow

Market value

Which of the following is NOT an effective bootstrapping strategy for launching your new venture? Forming partnerships with your first customers and suppliers Negotiating a sufficient bank loan with favorable terms Bartering or trading for the supplies, products or materials you may need Using your mentors, advisors and other sources for free or low-cost consulting

Negotiating a sufficient bank loan with favorable terms

Which of the following is generally NOT a component of a business model? Revenue streams Cost structure Key resources Personal history

Personal history

To keep your passion and perseverance alive while building your business you need to: Giving up everything you are doing other than your business for three to five years Revisit your purpose, set and achieve goals, remember the advantages of ownership, take regular breaks, and manage your thoughts Regularly talk to mentors who have gone through the same things you are experiencing Use social media to get ongoing feedback and reviews from your customers

Revisit your purpose, set and achieve goals, remember the advantages of ownership, take regular breaks, and manage your thoughts

Most entrepreneurs do not end up building the exact company they start out to build because: They are not very well organized and don't stick to their original business plan Their mentors, advisors, partners, and investors often give then conflicting advice They pivot several times in order to gain traction based on feedback they receive from their customers about their products, pricing, packaging, and service None of the above are correct because most successful entrepreneurs do build the company they set out to create

They pivot several times in order to gain traction based on feedback they receive from their customers about their products, pricing, packaging, and service

The main reason mentors are so important to the success of your new business is because: They have built the exact same type of business in the same industry as you They provide ongoing encouragement, introduce you to other people who can help, and support you through the ups and downs you will experience They are your primary source for getting funding from grants, competitions, and banks None of the above

They provide ongoing encouragement, introduce you to other people who can help, and support you through the ups and downs you will experience

What is the major purpose for developing a business model? To determine if your new venture can actually make money To get funding from a bank or investors for your new venture To evaluate the competitors you will face in the market None of the above

To determine if your new venture can actually make money

When using bootstrapping to grow your business you: Borrow money through credit cards, banks or private lenders, and then pay the money back according to specific terms you agree on Use your own savings and resources, other people's resources, free consulting services, and grow your company with your own cash flow as much as possible You give up ownership in your business in exchange for funds from family members, private investors or venture capital groups All the above

Use your own savings and resources, other people's resources, free consulting services, and grow your company with your own cash flow as much as possible

"User entrepreneurs" who have a great deal of experience with their product or service but limited experience in their industry usually fail because: They just don't understand the industry they are entering They don't have the contacts with key vendors and suppliers User entrepreneurs can actually do really well because they understand the industry from the customers perspective They usually don't have enough capital to get started

User entrepreneurs can actually do really well because they understand the industry from the customers perspective

Your new business venture will have the highest probability for success when: You get a large line of credit from a bank so you will never run out of money When your friends and family members tell you that you have a great idea When you discover a genuine need or problem, you have some experience in the industry, you create a solution, and your business can make money to sustain itself When you are in the right place and the right time and have a lot of luck

When you discover a genuine need or problem, you have some experience in the industry, you create a solution, and your business can make money to sustain itself

Which of the following is generally NOT a characteristic of owning a franchise? You pay an upfront fee to get the rights to the franchise You pay an ongoing royalty between 2 to 8 percent of your sales You pay a marketing fee between 1 and 3 percent of your sales You can develop your own products that are unique to your market

You can develop your own products that are unique to your market

When using equity financing to grow your business you: Use your own savings and resources, other people's resources, free consulting services, and grow your company with your own cash flow as much as possible You borrow money through credit cards, banks or private lenders, and then pay the money back according to specific terms you agree on You give up ownership in your business in exchange for funds from family members, private investors or venture capital groups Entrepreneurs seldom use equity financing to launch and grow a new business

You give up ownership in your business in exchange for funds from family members, private investors or venture capital groups

Which of the following is NOT an advantage of buying an existing company? You have a lot of freedom do develop your own products, services, and systems You pick up existing customers and immediate cash flow You can usually pay yourself a salary right from the beginning You have a parent company that can provide products, marketing, and ongoing training

You have a lot of freedom do develop your own products, services, and systems

Having worked in the industry in which you start your business is helpful because: You most likely have a college degree in that particular field You have made a lot of money and have adequate savings You know the customers, competitors, suppliers, and missing pieces You know how hard it is to succeed in that industry

You know the customers, competitors, suppliers, and missing pieces