Prin of Entrepreneurship

Check My Work True or False? A nonprofit corporation is not permitted to make a profit.

False

True or False? A sole proprietorship is a legal entity that has a sole owner who is responsible for all profits and losses.

False

True or False? Brand image is about how you convey the effectiveness of your brand in the market.

False

True or False? Do not provide a call to action but do finish on time.

False

True or False? If you want to retain earnings for expansion, an S-Corporation will enable you to do that.

False

True or False? Investors always require a business plan before investing.

False

True or False? It's OK to present in a casual style that doesn't sound like you prepared.

False

True or False? Nonprofit corporations are always tax exempt, so donors can get a tax write-off.

False

True or False? Once you choose the correct legal form of organization, it should not be changed.

False

True or False? Pricing should be designed to cover total costs.

False

True or False? The strongest proof of concept is a prototype.

False

True or False? What you put into your pitch is more important than what you take out.

False

True or False? You are most likely to write a business plan because a banker or investor asked you to. a. True b. False

True

True or False? You should not discuss what you think your business is worth in your business plan.

True

Choose the best answer to complete the following sentence. The purpose of a business process map is to:

b. detail how information flows through the business.

The price at which a willing seller would sell and a willing buyer would buy in an arm's-length transaction is:

b. market value.

What is the first step in the process of preparing to write a business plan? a. Develop a timeline based on tasks identified. b. Identify strategic partner interests. c. Identify who is responsible for what. d. Build a prototype.

c. Identify who is responsible for what.

The business plan preparation process includes: a. working diligently to get the job done. b. identifying who is responsible for what. c. developing a timeline and tasks. d. All the above.

d. All the above.

To rightly consider that you have captured the mass market, which group of adopters would you want to have adopt your product?

d. Early majority

Check My Work Which of the following is NOT a possible stakeholder in a new venture? a. Bankers b. Investors c. Strategic partners d. Government

d. Government

All the following are elements of a one-paragraph marketing plan EXCEPT the:

d. broad market and industry.

Before starting a business you should: a. raise money. b. write a business plan. c. hire employees. d. do feasibility analysis. e. develop a product.

d. do feasibility analysis.

The perceived value arrived at by interpreting balance sheet and income statement information including liquidated asset value is:

d. intrinsic value.

True or False? In a lean startup, we assume we know the customer.

false

True or False? Once you believe you know your customer, you can safely spend money on marketing.

false

True or False? When preparing your pitch, write fast first to get your ideas down, then organize and refine.

True

True or False? An Iowa State College study found that most farmers waited to see whether the first new-product trials were successful.

True

True or False? Both investors and lenders want to understand the risks the business faces and how their investment will be protected.

True

True or False? Communication is what the listener does.

True

True or False? Corporations account for about 62 percent of all business receipts.

True

True or False? In a partnership, a partner is personally liable for the business debts and obligations of the other partners.

True

True or False? Ratios are used to compare changes in a business from period to period and to analyze a company's performance.

True

True or False? Say what you say with certainty so the audience has confidence in you.

True

What should you NEVER do when answering a question from a potential investor? a. Ask the investor to repeat the question. b. Commit your company to a change in course. c. Restate the question to confirm your understanding. d. Admit that you don't have the answer.

a. Ask the investor to repeat the question. c. Restate the question to confirm your understanding. d. Admit that you don't have the answer.

At the feasibility stage, what are the three most important financial questions? (Select all three.)

a. Can we keep overhead to a minimum? c. Can we make money? e. How long will it take to be self-sustaining?

What are consumers' expectations going forward? (Select all that apply.)

a. Consumers want experiences targeted to their precise needs. b. They want experiences with no learning curve. d. Consumers want to interact with anyone, anytime, anywhere as easily as possible.

Corporations are different from all other forms in what ways? (Select all that apply.) a. Corporations require the establishment of a board of directors. b. A corporation is a legal entity. c. A corporation can sue and be sued, acquire and sell real property, and lend money. d. A corporation provides limited liability.

a. Corporations require the establishment of a board of directors. b. A corporation is a legal entity. c. A corporation can sue and be sued, acquire and sell real property, and lend money.

Which of the following metrics would be important to a startup business that produces self-improvement videos for sale direct to consumers online? (Select all that apply.)

a. Customer acquisition costs c. Monthly burn rate d. Average order size e. Viral coefficient

An LLC exhibits which characteristics of a corporation? (Select all that apply.)

a. Free transferability of interests c. Continuity of life d. Centralized management e. Limited liability

Which of the following is a startup resource? (Select all that apply.)

a. People c. Financial resources e. Intellectual resources f. Physical assets

Marketing has been described by the "5 Ps". What are they? (Select all five.)

a. Product c. Promotion d. People e. Place f. Price

What are the three broad types of risk that an entrepreneur faces and can manage? (Select all three.) a. Risks that are easy and cheap to overcome but which can produce large rewards b. Risks that result from decisions that take you down the wrong path—sunk costs c. Deal-killer risks that might prevent the launch of the business d. Unknown risks, also known as "Black Swans" Hide Feedback

a. Risks that are easy and cheap to overcome but which can produce large rewards b. Risks that result from decisions that take you down the wrong path—sunk costs c. Deal-killer risks that might prevent the launch of the business

What are some sources of sales for startups? (Select all that apply.)

a. Subscriptions b. Products c. Services

Which of the following is sales growth a function of? (Select all that apply.)

a. Technological innovations c. Market growth d. Product/service innovations

Which of the following are lenders' interests in the business? (Select all that apply.) a. The company's margins b. Return on investment c. Risk protection d. Collateral

a. The company's margins c. Risk protection d. Collateral

What happens in the chasm? (Select all that apply.)

a. The early adopters stop buying. c. The early majority isn't ready to buy the product.

Which of the following are components of a customer journey map? (Select all that apply.)

a. Whether interactions reinforce the customer's expectations. b. What customers need. c. How customers view the company. e. Points where the company does not use the data collected.

Which of the following is determined by where your business lies in the value chain? (Select all that apply.)

a. Whether your company is a manufacturer, distributor, or retailer. b. What your company's profit margins will be. d. How much risk you will need to take. e. Who your customers are.

At the beginning of your executive summary, you want to answer which three questions? (Select all three.) a. Why is this idea compelling? b. What is your competitive advantage? c. Who is on your team? d. What problem are you solving?

a. Why is this idea compelling? b. What is your competitive advantage? d. What problem are you solving?

To help you make decisions that might bring down the cost of starting your business, you should break out cash needs into types of capital resources. Which of the following are these types of capital? (Select all that apply.)

a. Working capital b. Startup expenses c. Capital expenditures e. Safety margin

What is the most important resource for new ventures?

a. cash, investor capital, savings, and loans.

Suppose you've determined that your startup's pre-money valuation (before investment) is $1,000,000 based on one of the generally accepted methods of calculation (discussed in Chapter 16). Assume the co-founders collectively hold 100 percent of the equity. You raise $200,000 in seed capital from an investor.

a. cash, investor capital, savings, and loans. b. financial assets, people, and equipment. c. intellectual property, physical assets, and inventory. d. All the above.

The worth of a business to an investor based on the investor's requirements is:

a. investment value.

Which of the following allows you to prove your concept? (Select all that apply.) a. Writing an effective business plan b. Building a prototype website c. Selling product to customers d. Getting signed purchase orders

b. Building a prototype website c. Selling product to customers d. Getting signed purchase orders

Which of the following is one of the four key activities for which resource decisions must be made?

b. Distribution channels

True or False? After validating the market, you should prepare financial statements. a. True b. False

b. False

What serious mistake did the entrepreneur described in the text with a software-as-service startup make that cost him a lot of money?

b. He didn't understand the needs of his customers and employees.

What are the CRITICAL factors that enter into a decision about the legal form of organization—that is, factors that dictate the form you must use? (Select all that apply.)

b. Your inability to assume personal liability for claims against the business. c. You have co-founders and expect initial losses for the first two years. d. You intend to grow the business to a substantial size.

What is the accounting term for your business' sources of income?

c. Revenue

All the following are metrics to measure the effectiveness of social media tools EXCEPT:

c. cost per click.

The current financial status of the business as measured by financial statements is:

c. going concern value.

Promotion is price-focused and is a _____ strategy while advertising focuses on customer benefits that are non-price focused and is a _____ strategy.

c. push; pull

Customers typically recognize three types of price: the price normally paid, which is the _____; the price compared to a substitute product, which is the _____; and the price paid for specials, which is the _____.

c. standard price; relative price; sale price

True or False? Every company experiences seasonality.

true

True or False? It's important to understand every possible aspect of the customer's life.

true

True or False? The importance of the lifetime value of a customer is that it tells you how much you can spend on acquisition.

true

True or False? When you successfully acquire customers, it's easy to sell them more products.

true