chapter 4 business final
which of the following are likely to increase the success of a start-up business
make sure business provides product/service with proven demand, create/update detailed start-up budget, join mentoring program, such as SCORE, have partner who has complementary skills, choose business w high margin, use business incubator
which of the following statements are disadvantages of purchasing an existing business
may have poor rep, difficult to value small business, finding successful business thats right for entrepreneur can be hard
which of the following is a problem associated with using asset valuation methodologies
time consuming as they involve identifying and estimating all assets of a business separately
the four basic forms of franchising are
trade name, product distribution, conversion, business format franchising
using effectual reasoning, entrepreneurs begin imagining
what they can accomplish with the resources they have at hand
which of the following statements are disadvantages of purchasing an existing business
facilities/equipment may be in need of repair, employees may not like change, may be declining
the bet realizable value is the amount
for which an asset will sell, less the cost of selling
the single greatest advantage of purchasing a franchise is
getting a complete business systems
most new businesses that are started
imitate a business that already exist in community
a minimum viable product is the
least version of product that can be produced at low cost and sold to buyers for feedback to improve product
caveat emptor is Latin for
let the buyer beware
which of the following questions should a potential franchisee know before signing a franchise agreement
how to terminate contract, how to transfer franchise license, hot to terminate the contract
which of the following are true about business accelerators
most are privately owned, most take equity stake in an entrepreneurs business in return for small amount of business stock
which of the following is one of the methods used to estimate value of firms assets
net realizable value, replacement value, book value
which of the following is a resource that all entrepreneurs have access to
network of friends and business associates
which of the following are disadvantages of starting a business from scratch
requires great deal of time to establish, bank credit is hard to receive, no initial name recognition, will have to attract, hire, train employees
in the context of franchise agreements, a franchisor
sets conditions and standards and grants operating permissions
astart-up is
a new business started from scratch
bootstrapping means
low-cost or free techniques to minimize cost of doing business
the vast major of start-ups are considered
me-too ventures
which of the following are one of the four resources that entrepreneurs have access
network of friends and business associates, own skills/abilities, access to capital, own knowledge
which of the following are advantages of starting a business from scratch
obtain latest technologies, best location, equipment,decides how big/small want business to be, suit owners preferences, no existing employee problems
synergy is a combination in which
a whole is greater than the sum of its component parts
true or false: an advantage of a start-up is that the owner of the start-up can make use of legacy locations, buildings, software, equipment to boost productivity
false
casual reasoning is also called
predictive reasoning
asset valuation methods are based on the postulation that
the value of a business is the value of its resources and holdings minus the value of any obligations
one of the best predictors that a founder will be successful is
their level of experience
business format franchising includes
trade names, products, operating methods, marketing plan, national advertising program
which of the following is a similarity between lean operations and bootstrapping
both focus on finding ways to achieve desired business objectives with limited start-up capital
the replacement value is the
cost to acquire an essentially identical asset
which of the following are benefits of own a franchise business
help selecting suitable location and getting assistance with construction of facility, able to purchase a turnkey business with well-established model, franchisor offers training to new franchises
master franchises are required to
open a minimum number of stores within a specified time period
conversion franchising provides
opportunity for independent businesses to combine resources
an asset is something a business
owns that is expected to have economic value in the future
franchise
prepackaged business bought, rented, or leased from company
due diligence
process of investigating business to determine its value
product distribution franchise
provides franchises with specific brand name products to resell
a spin-off is a business that is created by
separating part of an operating business into separate entity
casual reasoning is the process of
setting a goal and then determining the strategy and resources required to attain the goal
book value is the difference between
the original acquisition cost and amount of accumulated depreciation
lean business practices address the specifics of new business
creation, particularly internet-based businesses, where rapid experimentation and constant monitoring of viewers choices are possible
which of the following are included in the wrongdoing that due diligence attempts to find
fraud perpetrated by firm owners, missing info about obsolete equipment
brokers are responsible for
advertising and facilitating the sale of the business for a payment, usually percentage of selling price
trade name franchising is an
agreement that provides only the rights to use the franchisors trade name and.or trademarks
revolving credit is a credit that
allows a borrower to pay all or part of a loans balance at any time
revolving credits cannot be easily gained by
start-ups from suppliers and financial institutions
which of the following, according to Sarasvathy, is a critical principles in the effectual reasoning process?
strategic partnerships, affordable loss, leveraging of contingencies
asset valuation methods are based on the postulation that the
value of a business is the value of its resources and holdings minus the value of any obligations
which of the following statements about a firms intangibles are correct
value likely misstated, asset and liabilities that have no physical existence, ex)trademarks, patents, good will, accounts payable
which of the following are advantages to buying an existence business
established customers and sales, seller often provides financing, business plant equip and employees already there
steps in purchasing a business
examine locations, detailed business plan for acquisition, be able to purchase/operate business, study financial statements, interview customers and suppliers, negotiate price, cunduct extensive interviews w sellers
affordable loss is the minimal possible
expenditure of capital and other resources in order to bring an entrepreneurial idea to market
leveraging contingencies is the practice of and ability to
seize upon novel opportunities that become apparent during the conduct of business
lean operations and bootstrapping share which of the following underlying ideas
waste not want not, stay close to customers, create, standardize, repeat
which of the following statements regarding strategic partnership or alliances are correct
entrepreneurs seek out partnerships with other companies, these partnerships happen through serendipity, often key to young companys success
which of the following statements regarding affordable loss are correct
entrepreneur can walk away with small loss and go to next idea if current won isnt working, bringing product or service to market with min capital, effort, time expenditure,
rank order that should take place when purchasing a business
extensive interviews w seller, study its financial statements, look at locations, interview customers and suppliers, detailed business plan, negotiate price
which of the following is true of brokers
always trying to get the highest price
which statement describes effectual reasoning
begins with what resources are available and restraints there are on those resources
the three most commonly used methods to estimate a firms assets values are
book value, net realizable, replacement value
effectual reasoning is a logical process in which one
analyzes resources available and restraints on the use of resources to create an attainable goal
bricolage refers to the process of
analyzing resources available and creating a product/service from them
a businesses intangibles are its
assets and liabilities that have no physical existence
which of the following statements about spin-offs are correct
become regular business practice utilized by both large and smaller firms, gain access to resources that parent my lack, created by separating part of operating business to separate entity
strategic partnerships or alliances are formal or informal relationships with
customers, vendors, mentors to ensure success of an entrepreneurial venture
me-too ventures
business is common idea in community
spin-offs that are created to eliminate non-core activities help to
reduce capital requirements
which of the following is true of lean business practices
refer to methodically removing wastage of time, materials, money throughout business
in the context of disadvantages of start-ups, revolving credit allows
borrowers to pay all or part of a loan balance at any time
which of the following statements are the two primary goals for conducting the due diligence process
find any inefficiencies, unnoticed opportunities, waste, mismanagement,find any wrong doing
franchising is defined as a legal agreement that
allows one firm to operate using the name and business processes of another firm
