Chapter 5

__________ not only invest in businesses but play an active role in managing them.

. Venture capitalists

Monica, a​ doctor, owns a small health care clinic that serves underserved people in a​ lower-income neighborhood. What type of entrepreneur is​ Monica?

A social entrepreneur

Ellie, a computer​ programmer, has decided to start her own small​ computer-programming business. She plans to start the business using money that she has saved over the​ years, perhaps borrowing funds from family and friends and possibly trading services with vendors or clients. What type of financing is Ellie planning to​ use?

Bootstrap financing

Dujin recently ate at a Jimmy​ John's sandwich shop and really loved the meal. He thinks he would like to own and operate a Jimmy​ John's of his own. If he did own and operate his very own Jimmy​ John's, what would Dujin​ be?

He would be a franchisee.

All of the following statements about the Small Business Administration​ (SBA) are true​ EXCEPT:

It is a department of the federal government.

Jake has a small property management business. Although the business is reasonably profitable and he could expand it if he​ wished, he is content to keep it relatively small so that he has time to be actively involved with his young family. Which of the following terms would best describe​ Jake?

Micropreneur

All of the following statements about business plans are true​ EXCEPT:

They provide funding for the business.

Mid-Town Omaha,​ Nebraska, is an area that the state and federal governments have targeted for economic​ revitalization, and businesses are offered tax benefits for establishing businesses and hiring there. This type of area is called​ a(n) __________.

enterprise zone

Daya was in the information technology industry but now owns a consulting business in which she develops online computer courses from home. Sick of the​ "rat race," she now enjoys a less demanding schedule and has more family time. Daya is an example of​ a(n) __________.

lifestyle entrepreneur

All of the following characteristics would describe entrepreneurs EXCEPT​ ________.

risk-averse

When her children are at school during the​ day, Domenica frequents yard sales and then sells those items on eBay. Domenica would best be described as​ a(n) _______.

​home-based entrepreneur

Henry started a business in a new sector of the economy that is poised to expand rapidly in the next 10 years. He hopes his business will likewise experience rapid expansion. What type of entrepreneur is​ Henry?

A growth entrepreneur

Aisha worked for a cable company for years and noticed how horrible the customer service was.​ So, one​ day, Aisha decided she wants to start her own business training small businesses on how to provide outstanding customer service. Which of the following terms would best describe​ Aisha?

An entrepreneur

Serwaa wants to open a​ not-for-profit organization that serves lunch to elderly people living on fixed incomes. There are a couple of programs she has applied​ for, which, if she​ qualifies, will provide money that she does not have to pay back. What type of funding did Serwaa apply​ for?

Grants

Amit just started a new business that teaches other small businesses to provide excellent customer service.​ However, Amit has strong customer service skills but lacks knowledge about teaching. What should Amit do to fix this talent gap without having to hire employees or pay for expensive​ consultants?

He should see if other entrepreneurs are interested in forming an entrepreneurial team.

Milo is seriously considering buying a small​ fast-food franchise. His​ friend, a successful​ entrepreneur, warns Milo to make sure he has done as much research as he can about the franchise before​ "signing on the dotted​ line." What does he want Milo to​ do?

He wants Milo to perform due diligence when evaluating the franchise opportunity.

Which of the following statements about an opportunity niche is​ true?

It is a need or want that is currently going underserved or unserved.

Gorditos is a restaurant in Seattle that has been in business for over 20 years. It is phenomenally​ successful, and the owners have been asked on several occasions if they have any plans for expansion or starting a​ franchise, but they have no desire to do so or grow the business in any way. What type of entrepreneurs are​ they?

Micropreneurs

Kareem has a very successful​ party-planning business, and he is considering expanding the business by selling its goods and services under the​ company's name to independent​ third-party operators who would use his marketing methods and business model in exchange for a fee. Kareem is thinking about becoming​ a(n) _______.

franchisor

Edie is looking at purchasing an existing business and is trying to determine how much to pay for it. She finds it easy to determine the value of the property and inventory but is having a difficult time determining the value of the existing​ owners' __________: their reputation with the​ community, loyalty of​ customers, and employee morale.

goodwill

Which of the following statements about angel investors is​ true?

They are willing to put up their own money to fund businesses in hopes of eventual profit. Your answer is correct.

Chuck, a new​ entrepreneur, has five experienced business owners who offer him guidance on issues related to starting and running his new business. This group of business owners is​ Chuck's __________.

advisory board

Javier has been accepted into a program at a local university for student entrepreneurs that will help provide​ guidance, support, business​ networking, and possibly even funding to start his dream business. This program is known as​ a(n) __________.

business incubator

A(n) __________ is one that is independently owned and operated and that is not dominant in its field.

small business

In​ 1985, Anya started a small business selling large bags of popcorn to the public. Almost 30 years​ later, her business has over​ 15,000 locations​ nationwide, all independently owned and operated. At this​ point, Anya provides​ popcorn, advertising, and support to the owners. She also runs ads on the Internet and television advertising the popcorn business. What is​ Anya?

A franchisor