Business 5-7

An advantage to buying an ongoing business is

all of these.

Venture classifications include which of the following types of venture?

high-growth ventures

An agreement not to compete is also known as

b.a legal restraint of trade.

Which of the following learning mechanisms are important for converting ideas into form in design methodology?

All of these

Which of the following statements is true?

C. Both sides of the brain are important to the creative process. O

The phase of the creative process when the idea or solution the individual is seeking is discovered is the

C. idea experience.

Franchisees have the option of whether to use the logo and symbols of the franchisor.

False

Most entrepreneurs are objective when they evaluate their new idea.

False

Most entrepreneurs are well schooled in the technology associated with their ventures.

False

Surprisingly, growth of sales is generally not considered a critical factor in assessing new ventures.

False

The cognitive ability of entrepreneurs to acquire and transform information has yet to be studied.

False

There is a great abundance of reliable data concerning the start-up, performance, and failure of new ventures.

False

Which of the following statements is true?

Oa. Innovation is the specific function of entrepreneurship.

Which of the following statements is true?

Ob. The right brain helps people understand analogies and imagine things.

Researchers developed a "Newness Framework" to help depict the differing dimensions of newness that ventures could exhibit, which include which of the following dimensions:

Technology newness

Perhaps the greatest advantage of buying a franchise, as compared to starting a new business or buying an existing one, is that the franchisor will usually provide both training and guidance to the franchisee.

True

The Franchise Disclosure Document (FDD) is a legally required disclosure document that must be presented to potential franchisees during presale discussions.

True

The four basic types of innovation are invention, extension, duplication, and synthesis.

True

The four phases of the creative process are knowledge accumulation, incubation, idea experience, and evaluation.

True

The left hemisphere of the brain is responsible for logical and analytical skills.

True

When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees.

True

O An additional consideration to keep in mind when negotiating to purchase an existing business includes requesting that the seller retain in the firm.

a. a minority interest

The basic suggested venture legitimation strategies include which of the following:

all of these

The entrepreneurial motivations of individuals usually relate to which of the following factors?

all of these

Which of the following mental habits inhibit creativity and innovation?

either/or thinking, stereotyping

O The social and economic environment affecting the local and regional entrepreneurship is now commonly referred to as:

entrepreneurial ecosystem

An approach developed as a criteria selection list from which entrepreneurs can gain insights into the viability of their venture is the

feasibility criteria approach.

The individual who buys the franchise is the

franchisee.

Poor financial understanding is characterized by which of the following?

inadequate understanding of costs and funding requirements

O Overnight package delivery is illustrative of which source of innovation?

incongruities

What are the four types of innovation?

invention, extension, synthesis, duplication

Inflated owner ego, employee-related concerns, control factors and interpersonal problems are factors involved in which of the following causes for venture failure?

managerial problems O

* Many entrepreneurs lack for their new venture.

objectivity

The person who sells the franchise is usually required to do all of the following except:

pay a fee.

A common pitfall in selecting a new venture is

poor financial understanding.

Which of the following is NOT one of the phases in the creative process?

preliminary investigation

Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by:

using less debt as initial financing and generating revenue in the initial stages.

The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture.

True

The prospective investor should get as much information as possible on the franchisor.

True

The rise of incubators, accelerators, and entrepreneurial ecosystems may be an important pathway for entrepreneurs to pursue.

True

The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer.

True

Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach.

True

Which of the following is not a key question a prospective buyer needs to ask in buying a business?

What is the owner's personal net worth?

The inventory should be examined for which of the following?

all of these

Which of the following is critical to a product's success?

all of these

When should a potential franchisee receive the FDD (Franchise Disclosure Document)?

at least ten days before signing a contract or paying any money

Logical and analytical skills are developed in the

left hemisphere of the brain.

The incubation process involves which of the following?

letting the subconscious work

When one designs a unique good or service, the individual is said to have used a(n) approach to starting the business.

new-new

The combination of existing concepts and factors into a new formulation would define which of the following terms?

synthesis

Which of the following are sources of innovation?

unexpected occurrences and incongruities

Obtaining external financing is considered one of the major types of problems for a new venture during its first year.

True

One of the most helpful avenues for developing one's own creative talents is to be aware of the habits and mental blocks that stifle creativity.

True

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business.

True

Synthesis is the combining of existing concepts into a new formulation.

True

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture.

True

Three specific phases that a new venture goes through are

prestart-up, start-up, poststart-up.

Which of the following is a factor contributing to new-venture failure?

product/market problems.

Who must negotiate a final deal to purchase a business?

The potential buyer

Which of the following is NOT true of creative people?

They must be gifted or highly intelligent.

Creativity, in the entrepreneurial context, is the generation of ideas that result in the improved efficiency or effectiveness of a system.

True

Feasibility analysis includes technical, market, financial, organizational, and competitive analysis.

True

In negotiating a deal to purchase an existing business, it is possible to request that the seller retain a minority interest in the firm.

True

Incongruities are gaps or differences between expectations and reality.

True

The four phases in the creative process in order are

background or knowledge accumulation, incubation, idea experience, and evaluation and implementation.

Which of the following is an entity that helps new ventures to develop by providing services such as management training and office space?

business incubator

Looking for different or unorthodox relationships among elements and people is one way to develop creativity. How might a person develop this capacity?

by perceiving in a relational mode

The decision of an entrepreneur to ignore the market is a safe one if he or she is sure that the idea will be a success.

False

is a system distribution that enables a supplier to arrange for a dealer to handle a specific product or service under certain mutually agreed upon conditions.

franchise

Which of the following is an intangible asset?

goodwill

The type of venture that is expected to attract venture capital would most likely be a

high-growth venture.

Innovation is the process by which entrepreneurs convert opportunities into marketable ideas.

True

Many inventions and innovations are a result of inventors seeing new and different relationships among objects, processes, materials, technologies, and people.

True

New venture legitimacy is a major challenge for every entrepreneurial start-up.

True