Small Business CH 1
False
Although interest in entrepreneurship remains high nationwide, the number of women-owned businesses is decreasing.
Be their own boss
According to the textbook, the number one reason that people become entrepreneurs is to
positively influence people's lives
According to the textbook, the passion that motivates people to launch entrepreneurial firms typically stems form the entrepreneur's belief that the business will _________
lifestyle firms, salary-substitute firms, and entrepreneurial firms
According to the textbook, there are three types of startup firms: ________.
To be their own boss. Pursue their own ideas. Financial rewards.
Describe the three primary reasons that people become entrepreneurs and start their own firms
False
Entrepreneurship is the process by which individuals pursue opportunities within the constraints of the resources they control.
True
Established firms with an entrepreneurial emphasis are proactive, innovative, and risk-taking.
Determining how to seize the spotlight
Which of the following is not one of the four steps of the entrepreneurial process?
True
) Innovation is the process of creating something new, which is central to the entrepreneurial process.
The four main characteristics of successful entrepreneurs are: passion for the business, product/customer focus, tenacity despite failure, and execution intelligence. The number one characteristic shared by successful entrepreneurs is passion for their business, whether it is in the context of a new firm or an existing business. This passion typically stems from the entrepreneur's belief that the business will positively influence people's lives. A second defining characteristic of successful entrepreneurs is a product/customer focus. This characteristic underscores two of the most important elements in any business-products and customers. The third characteristic of successful entrepreneurs is tenacity despite failure. Because entrepreneurs are typically trying something new, the failure rate associated with their efforts is naturally high. The litmus test for entrepreneurs is their ability to persevere through setbacks and failures. The fourth characteristic of successful entrepreneurs is execution intelligence. The ability to effectively execute a business idea means developing a business model, putting together a new venture team, raising money, establishing partnerships, managing finances, leading and motivating employees, and so on.
) Describe the four main characteristics of successful entrepreneurs
business model
A firm's ________ is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates.
business plan
A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner.
they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur
According to Chapter 1, a sentiment that venture capitalists often express is that ________.
strength of the entrepreneur
According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.
40
According to a recent Gallop survey, about ________ percent of kids in grades 5-12 say they plan to start their own business.
False
According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence
False
According to the consensus of the research, some people are genetically predisposed to be entrepreneurs.
To take advantage of an attractive opportunity
According to the global entrepreneurship monitor (GEM 2013 study, the majority of people in high-income countries are drawn to entrepreneurship _____________.
12.7
According to the global entrepreneurship monitor (GEM) 2013 survey, about percent of adults in the united states are wither starting a business or are running a business that has been in existence for less than 3 1/2 years
True
According to the opening feature on Pure Fix Cycles, one of the biggest challenges the startup now faces is an increasingly competitive marketplace.
True
According to the results of the GEM 2013 survey, about 1 out of every 8 American adults is actively engaged in starting a business or is the owner/manager of a business that is less than 3 1/2 years old.
entrepreneurial
According to the textbook, Dropbox, Facebook, and LinkedIn are examples of ________ firms.
moderate risk takers
According to the textbook, entrepreneurs are ________.
a major impact on both the economy and society
According to the textbook, entrepreneurship has historically had ________.
passion for the business, tenacity despite failure, product/customer focus, and execution intelligence
According to the textbook, the fours characteristics of successful entrepreneurs are ______
Execution intelligence
Alex and Patty Webb launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that Alex and Patty are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs?
triggering event
An event that prompts an individual to become an entrepreneur, such as losing a job, inheriting money, or accommodating a certain lifestyle, is referred to as a(n) ________.
corporate
Apple is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Apple practices _______ entrepreneurship
creative destruction
As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy.
proactive, innovative, and risk taking
Cody Rodgers is the founder of a company named Extreme Sports apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathlete, skateboarders, and BMX bikers. Today wants his company to pursue a high level of corporate entrepreneurship. To achieve that goal, Cody's firm should be _________.
salary-substitute
Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Stephanie a level of income that is similar to what she would earn in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an example of a(n) ________ firm.
Often fails to live up to its hype
Easy stevenson is starting a firm in the women's clothing industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money
bring new products and services to market by creating and seizing opportunities
Entrepreneurial firms ________.
False
Entrepreneurs are motivated primarily by money.
True
Entrepreneurs are usually moderate, rather than high, risk-takers.
entrepreneurial intensity
Google is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Google has a high level of _____.
The two reasons that entrepreneurial behavior has a strong impact on the United States economy are as follows: innovation and job creation. Innovation is the process of creating something new, which is central to the entrepreneurial process. According to the Small Business Administration (SBA) Office of Advocacy, small innovative firms are 16 times more productive than large innovative firms in terms of patents per employee. In regard to job creation, according to the SBA, small businesses create a substantial number of new jobs in the United States. Firms with 500 or fewer employees create 65 percent of new jobs on an annual basis.
Identify and discuss the three primary reasons that entrepreneurial behavior has a strong impact on the United States economy.
The three types of startup firms are: salary-substitute firms, lifestyle firms, and entrepreneurial firms. Salary-substitute firms are small firms that afford their owners a level of income similar to what they would earn in a conventional job. Examples of salary-substitute firms are dry cleaners, convenience stores, restaurants, accounting firms, retail stores, and hairstyling salons. Lifestyle firms provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so. Examples of lifestyle firms include ski instructors, golf pros, and tour guides. Entrepreneurial firms bring new products and services to market by creating and seizing opportunities. There are many examples of entrepreneurial firms in computer software, biotechnology, and medical devices.
Identify the three types of startup firms, and discuss how they differ. Provide examples of each type of firm.
Small businesses outperform their larger counterparts.
In regard to patent activity (issuance), which of the following statements is correct?
True
In terms of the "types" of startup firms, entrepreneurial firms bring new products and services to market.
Joseph Schumpeter
In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that, over time, make current products and technologies obsolete. This process is called creative destruction.
triggering event
Jan Berry recently received a $500,000 inheritance from her maternal grandmother. Jan decided to use the money to start a business. According to the textbook, the inheritance that Jan received was the ________ that prompted her to start a business.
True
Joseph Schumpeter argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity.
lifestyle
Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm.
False
Over the past 10 years, the demographic makeup of entrepreneurial firms has remained fairly stable in the United States and around the world.
Entrepreneurs love the spotlight.
Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviews and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?
Fixed gear single speed bikes
Pure Fix Cycles, the company profiled in the opening feature of chapter1, was launched by four co-founders and sells
True
Small businesses outperform their larger counterparts in terms of patent activity (issuance).
Product/customer focus
Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacturer a new innovative food blender. Stacey's desire is to sell her food blender to as many people as possible because she firmly believes in the merits of her product. Stacey's story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur?
Candidate A: visionary, energetic, moderate risk taker
Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?
gain access to mentors, partners and investors
The Partnering for Success feature in Chapter 1 focuses on start-up incubators and accelerators. According to the feature, participating in a start-up incubator or accelerator is an excellent way to ________.
tenacity despite failure
The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on Pandora, the Internet streaming music company. The feature's main purpose is to illustrate the importance of ________ as a key characteristic of the founders and employees of entrepreneurial firms.
a lack of passion and resolve
The What Went Wrong> feature in chapter 1 focuses on Prim failed largely as a result of _______
False
The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.
True
The four main characteristics of successful entrepreneurs are: passion for the business, execution intelligence, product/customer focus, and tenacity despite failure.
Entrepreneurs are tenacious.
Which of the following is not one of the five common myths about entrepreneurs?
a passion for the business
The number one characteristic shared by successful entrepreneurs is ________
True
The number one characteristic shared by successful entrepreneurs is passion for the business.
False
The number one reason that people become entrepreneurs is to pursue financial rewards
False
The passion that entrepreneurs have typically stems from the ability to pursue their own ideas.
be their own boss, pursue their own ideas, and realize financial rewards.
The three primary reasons that people become entrepreneurs and start their own firms are to _________
a substantial increase
There has been ________ in the number of minority entrepreneurs in the United States over the past several years.
False
Unfortunately, statistics show that there is very little interest in entrepreneurship among young people in the United States.
Entrepreneurship is the process by which individuals pursue opportunities without regard to the resources they currently control. The essence of entrepreneurial behavior is identifying opportunities and putting useful ideas into practice.
What is entrepreneurship? What is the essence of entrepreneurial behavior?
There is tremendous interest in entrepreneurship across the world
Which of the following is an accurate characterization of interest in entrepreneurship?
Short attention span
Which of the following is not a personality trait or characteristic common among entrepreneurs?
Deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm
Which of the following is the correct sequence for the four steps in the entrepreneurial process?
The highest percentage of entrepreneurs falls in the 30 to 39 age range.
Which of the following statements is correct regarding entrepreneurial activity and age ranges?
The majority of business founders have no prior work experience.
Which of the following statements is incorrect regarding entrepreneurial activity and age range?
The number of women-owned businesses is decreasing.
Which of the following statements is not true about women-owned businesses in the United States?
As high as 50 percent after four years
Which of the following statements regarding survival rates of entrepreneurial firms in the United States is correct?
Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs.
Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs?
Pessimistic disposition
Which of the following was not identified in the textbook as one of the common traits and characteristics of entrepreneurs?
The ability to stick to a plan even when faced with evidence that changes are needed
Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization?
Innovation
________ is the process of creating something new, which is central to the entrepreneurial process.