Chapter 6: Entrepreneurship and Starting a Small Business

________ refers to accepting the risk of starting and running a business.

Entrepreneurship

Most entrepreneurs get ideas for products and services __________.

from looking around and asking questions

Most entrepreneurs get ideas for products and services ___________.

from looking around and asking questions

All organizations require the following:

-information management -planning -capital

Select reasons why people become entrepreneurs.

-profit -opportunity -independence

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.

entrepreneurial

The section of the business plan that is designed to initially captivate and energize a potential financial investor would be the...

executive summary

What are the three main factors addressed in a business plan?

goals, plan, metrics for succes

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:

increasing

Business __________ are centers that offer businesses in the critical stage of early development low-cost offices and access to basic services such as accounting, legal advice, and secretarial help.

incubators

The best way to define a(n) ___________ is all consumers with unsatisfied wants and needs who have both resources and the willingness to buy.

market

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?

planning and financing

Which section of the business plan details and outlines the authority structure that exists inside the company?

the management plan

Entrepreneur

Desire to grow the business and generate wealth

Micropreneur

Desire to remain small and balance lifestyle with work

Which of the following are good ways to learn how to run your own business?

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

An inexpensive marketing research study may help you determine which of the following?

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

What two questions do entrepreneurs often ask themselves?

-What really irritates me, and what product or service would help? -What do I want, but can never find?

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?

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

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

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

A small business is defined as:

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

Select the characteristics of an intrapreneur.

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

What two items are described in a business plan?

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

What are three attributes of successful entrepreneurs?

-tolerant of uncertainty -action-oriented -highly energetic

Some common causes of small business failure include:

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

Identify the principle characteristic of an entrepreneur.

A tendency toward self-discipline

What is the best definition of entrepreneurship?

Accepting the risk of starting and running a business

Which business need to write business plans?

All businesses should write business plans in order to create a framework for success

__________ are creative people who work as entrepreneurs within corporations.

Intrapreneurs

What advice would established entrepreneurs likely tell a new, would-be business owner?

Make sure your business is not undercapitalized.

What is the outlook for online businesses?

Online sales are projected to increase.

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

True

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

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

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

accounting system

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?

apprenticeship

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) __________.

business plan

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

buy

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.

entrepreneurial

Some causes of small-business ___________ 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.

failure

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

global

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.

incubator

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.

micropreneurs

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

opportunities

The SBA defines ____________ a business as one 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.

small

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:

understands the steps needed to start a small business

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

venture capitalist

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:

why people take the risks of entrepreneurship