busi chapter 6

True

True or false: Most entrepreneurs do not get their ideas from a flash of inspiration; they come more from their passions or looking at problems.

True

True or false: The principles of management are similar for a small neighborhood business and a giant global firm.

opportunities

Two advantages small firms have over large firms include more personal customer service and the ability to respond quickly to Blank______.

an inexpensive market research study

Understanding where to locate your business, who your target market is, and how to reach them, can be accomplished through

Micropreneurs

______ want to maintain a balanced life style while doing the kind of work they want to do.

apprenticeships can benefit both the business owner and the apprentice

David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how Blank______.

self-directed and self-nurturing. Explanation Self-directed entrepreneurs know they must be self-disciplined. Success or failure is in their hands. Self-nurturing entrepreneurs believe in their own ideas.

Entrepreneurs emphasize the importance of believing in your own ideas because in the process of developing those ideas you are likely to hear from skeptics. Characteristically, they also know that success or failure is "on them." These attributes are described as

micropreneurs

Entrepreneurs start a business with the desire to grow the business and generate wealth while ( ) start a business that will stay small, allowing them to have a balanced lifestyle and the ability to do the kind of work they want to do.

the resources and qualifications of the owner(s). Explanation A business plan is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s).

A business plan is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and

small business

A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts is a(n):

buy

A market consists of consumers with unsatisfied wants and needs who have both resources and the willingness to:

business plan

A(n) ______ is a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s).

entrepreneurial

A(n) ______ team is a group of experienced people from different areas of business who join together to form a managerial team with the skills needed to develop, make, and market a new product.

incubator

According to a recent study, offering low-cost offices with basic services to new businesses in the early stages of development results in an 87% success rate of ( ) graduates.

why people take the risks of entrepreneurship

After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates:

a market

All consumers with unsatisfied wants and needs who have both resources and the willingness to buy are:

planning and financing

Although there are many functions that are important in both the start-up and management phases of the business, what two functions are considered to be primary concerns? Multiple choice question.

talk with others who have been or are in the import business. Explanation Before starting a business, it's helpful to take classes in business and entrepreneurship and talk to others who have already done it.

Bishara wants to start a small business importing some products from her native Kenya. Before she starts, some good advice to Bishara would be to

an entrepreneurial team. Explanation An entrepreneurial team is a group of experienced people from different areas of business who join to form a managerial team with the skills to develop, make, and market a new product.

Brandon, an experienced backpacker, didn't find the flavor or selection of most dehydrated food appetizing, so he set out to create something better. Brandon, a food chemist, and his college roommate, Travis, now a chef, collaborated to produce some food choices and sell them in upscale outdoor outfitters. Travis asked Cody, a marketing professional who had created a new logo and menus for a restaurant if he would be interested in the venture. This group is referred to as

understands the steps needed to start a small business

Daniel wanted to start his own small business. After spending his own money on marketing research, Daniel asked his friend Chase to be his accountant. They spent a few months writing a business plan, which then they presented to a bank. Daniel:

who have a willingness and the resources to buy. Explanation When starting your business, you must have customers with unsatisfied wants who have the resources and desire to buy.

For a market to exist, there must be potential buyers

global or international

Gaining financing, knowing how to get started in exporting, and navigating bureaucratic paperwork are major hurdles to consider when getting started in ( ) business.

A tendency toward self-discipline

Identify the principle characteristic of an entrepreneur.

billion , 12

In 2019, online retail sales reached over $365 ( ), or approximately ( ) percent of all retail sales.

business

Local community college classes are a good place to start to learn about starting your own ( ).

entrepreneurs or micropreneurs

Many ( ) use their time, money, and energy to turn their passions into sustainable businesses. They are comfortable being their own bosses and are not afraid of failure.

business plan

Mark recently started a small consulting firm. He is drafting a detailed written statement that describes the nature of the business, the target market, the advantages the business will have over competition, and the resources and qualifications of the owner(s). Mark is writing a(n) Blank______.

Entrepreneur Choice Desire to grow the business and generate wealth. Micropreneur Choice Desire to remain small and balance lifestyle with work.

Match the goals with the type of business person.

customer

More personal ( ) service and the ability to respond quickly is an advantage for small businesses.

venture capitalist

Naomi invests in new businesses in exchange for partial ownership in those businesses. Naomi is a(n) Blank______.

the ability to quickly adapt to customer needs. Explanation Understanding the market is very important for small-business success. Due to their size and flexibility, small businesses can often adapt quicker to changes in the market, including changes in preferred product offerings and delivery methods

One advantage of a small business is

venture capital firms may ask for a high stake in your business. Explanation In exchange for taking a large risk with their investments, venture capitalists may ask for a large stake in the business. If the venture capitalist takes too large a stake, you could lose control of the business.

One of the drawbacks of using venture capital is

micropreneur. Explanation Micropreneurs are entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.

Sairsha has perfected the art of glass-blowing. She's made gifts for her friends for years and has always gotten rave reviews, so she decided to make a business out of her craft. She plans to run the business out of her home so she can be there to raise her children and still participate in all of their activities. Sairsha is not interested in growing a large business; she just wants to make extra income. Sairsha is best described as a(n)

Each from different areas of business A group of experienced people Members have complementary skills and are creative

Select all that apply Select the characteristics of an entrepreneurial team that will be developing and marketing a new product.

one that is independently owned and operated one that is not dominant in its field one that meets certain standards of size in terms of employees or receipts

Select all that apply A small business is defined as:

capital planning information management

Select all that apply All organizations require the following:

understanding cultural differences bureaucratic paperwork difficulty finding financing

Select all that apply Among the hurdles small businesses must overcome in starting to operate globally are:

Where to locate What is an effective strategy for reaching your target market Whom to select as your target market

Select all that apply An inexpensive marketing research study may help you determine which of the following?

Planning Marketing Financing

Select all that apply Chris spent his own money on marketing research, and consulted his sister Kara, who is an accountant. They spent the next few months writing a business plan. Which of the following are some business functions Chris would have addressed?

starting with enough money to hire a good lawyer and accountant that finding and retaining good workers is hard

Select all that apply Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:

follow the daily sales and expenses manage customer records

Select all that apply Managing a small business became relatively easy with the advent of inexpensive personal computers. Inexpensive computer systems and off-the-shelf or even free, open-source software make it easy for the small business manager to Blank______.

someone who uses company's resources to launch new products a creative person who works within a corporation he or she generates profits by leveraging a firm's human financial and physical resources.

Select all that apply Select the characteristics of an intrapreneur.

provide more challenging opportunities to learn maintain good employee relations be respectful of employees' opinions

Select all that apply Since entrepreneurs can't compete with larger firms' pay and benefits, what are three ways they can motivate employees?

underpricing or overpricing goods or services starting with too little capital no experience in that business or industry

Select all that apply Some common causes of small business failure include:

Financing is often difficult to find. Would-be exporters do not know how to get started.

Select all that apply There are a few hurdles that prevent many small businesses from engaging in the global market. Which of the following are examples of such problems?

the target market the resources and qualifications of its owner(s)

Select all that apply What two items are described in a business plan?

Run a small business during your off hours Talk to other business owners Work for a successful entrepreneur

Select all that apply Which of the following are good ways to learn how to run your own business?

independence profit opportunity

Select reasons why people become entrepreneurs.

they can begin shipping faster. Explanation Small businesses have a few advantages over big business in international trade, such as (1) overseas buyers like dealing with individuals, (2) small companies can usually ship faster, (3) small companies can provide a wide variety of suppliers, and (4) small companies can give personal service. Price is not included in this list.

Small businesses have an advantage over large business in international trade because overseas buyers prefer dealing with individuals rather than large bureaucracies. Small companies can give customers personal service and undivided attention since each overseas account is a major source of business to them and

individualized customer service as opposed to impersonal corporate bureaucracies. Explanation Small companies can give more personal service and more undivided attention, because each overseas account is a major source of business to them.

Small businesses often have advantages in international markets. One advantage is

failure

Some causes of small-business Blank______ include underpricing or overpricing goods or services, starting with too little capital, going into business without first learning something about the industry or market, and underestimating how much time it will take to build a market.

increasing

The expansion and development of the Internet has sprouted a world of small web-based businesses. This, among other reasons, may explain why online sales are rapidly:

financing and planning. Explanation Although knowing your customers, managing employees, and keeping records are vitally important, planning and financing are the primary concerns when first starting your business.

The primary concerns when first starting your business are

Paperwork is often overwhelming. Explanation There are a few major hurdles: (1) financing is often difficult to find, (2) would-be exporters don't know how to get started and do not understand the cultural differences between markets, and (3) the bureaucratic paperwork can threaten to bury a small business.

There are many reasons why small-business owners refuse to go international. What is one of those reasons?

accounting system

To keep track of daily sales, expenses, profits, inventory control, customer records, and payroll a small business needs a good

You should become an apprentice or work for a successful entrepreneur.

What advice is helpful for someone wanting to learn small-business management?

action-oriented highly energetic tolerant of uncertainty

What are three attributes of successful entrepreneurs?

delegate authority to employees

What is a good tactic for entrepreneurs to implement in order to keep a new company growing?

Accepting the risk of starting and running a business

What is the best definition of entrepreneurship?

personal savings and individual investors such as family Explanation The most common source of funding for entrepreneurs is their own personal savings plus funds from friends and family.

What is the most common source of funding for entrepreneurs?

Venture capitalists

What term is given to individuals or companies that invest in new businesses in exchange for partial ownership in those businesses?

apprenticeship

What type of business relationship benefits both a trainee and a business owner and occurs when a trainee is hired to learn small-business management while assisting the owner in getting daily work done?

enterprise zone Explanation Enterprise zones are specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.

When Tyler, a veteran, started his business, he knew he had to keep costs to a minimum and he worried about taxes. He planned to build and distribute safety goggles for construction workers and military personnel. He realized most of his business would not be through walk-in customers but rather large orders from companies. He chose to locate in a government-subsidized area called a(n) __________, where he would receive tax breaks and other government support.

Business incubators

Which of these are centers that offer new businesses in the critical stage of early development low-cost offices with basic services such as accounting, legal advice, and secretarial help?

use technology such as PayPal to fulfill orders, which gives them some assurance of payment. Explanation Technological advances have made it much more feasible for small businesses to trade abroad. PayPal, for one, allows for prompt international payments.

While not knowing how to get started and cultural differences make the prospect of global trade difficult for small businesses, there is one bright spot on the horizon that has brought global trade closer to home. Small businesses can now

Intrapreneurs

______ are creative people who work as entrepreneurs within corporations.

CDFIs (Community Development Financial Institutions) Explanation Community development financial institutions (CDFIs) may be a source of funding for businesses in lower-income communities. CDFIs played a big role in the economic recovery. CDFIs succeeded even after the credit bubble because they maintained the financial discipline other lenders lacked. They have the incentive to make sure their clients succeed because if borrowers don't repay their loans, the CDFIs take the hit, not investors.

__________ are often a source of funding for lower-income communities. These organizations have a significant role in the economic recovery and some start-up businesses have successfully found sources of capital by going through one of these organizations.