ENT 2113 Final Exam

Identify a true statement about the process of generating business ideas.

After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful.

In the context of legal forms of business, identify a benefit of a Subchapter S Corporation over a Subchapter C Corporation.

An Subchapter S Corporation has limitations in the number and type of shareholders unlike a Subchapter C Corporation.

In the context of legal forms of business, identify an accurate statement about a general partnership.

Established partners can bring in new equity partners by surrendering a portion of their ownership position.

A venture capital start-up is oriented toward the personal goals of the founders.

False

An entrepreneur needs to set limits to how much time he or she spends on a business for it to be successful.

False

Boards of advisors are composed of key employees who advise a firm.

False

Entrepreneurial businesses fail to provide a means to meet the varied demands that individuals face in a society.

False

Entrepreneurs driven by circumstantial motivators are often more proactive than those with personal motivation for starting a business. Group starts

False

Patents are inexpensive and easy to obtain and maintain.

False

The business plan for small businesses should be at least 50 pages long.

False

The second column in a gap analysis is devoted to listing the market need.

False

Venture capitalists typically do not invest more than $2 million.

False

Whether hiring for a line worker or a first line manager, an owner should devote the same amount of time in checking references. Group starts

False

In the context of legal forms of business, identify a true statement about sole proprietorship firms.

Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms.

Which of the following personality tests is based on the philosophy of Carl Jung?

Myers-Briggs

A type of gap analysis that compares the possibilities in the marketplace with an individual's competence to address those gaps is called

Opportunity Analysis

Threats to ________ are threats to the success of a new business related to its ability to establish and maintain a high-margin product or service.

Profit Margins

Trilane Systems is a small business. Its owner, Myra, is also its only employee. She handles the business's operations herself and is responsible for all of the business's income and losses. In the context of the legal forms of business, Trilane Systems is a

Sole proprietorship.

Identify a true statement about the history of entrepreneurial businesses in the United States.

The 1880s saw the initial development of the nation's large industrial base.

Which of the following experiences can entrepreneurs evaluate when generating business ideas based on their education?

The courses they took that were particularly enjoyable

Identify a true statement about a large firm that has organizational slack.

The loss of an employee barely affects the abilities of its workforce.

The screening of résumés or applications prior to beginning an interview process for a job and the checking of references is important. Group starts

True

The success of entrepreneurial firms pursuing new opportunities requires a number of deliberate actions by the business founder concerning human resources issues.

True

When a potential business owner has several ideas for a business, he or she needs to identify one on which to perform a due diligence analysis.

True

he Myers-Briggs test is used for personality evaluations. Group starts

True

In the context of risks to new businesses, identify a true statement about risk tolerance.

What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.

Which of the following questions should a new business owner examine when considering leases?

What exactly is the new business owner leasing? Who is responsible for maintenance and improvements? Is there an ability to renew the lease?

A small business owner must possess all of the following except

a sequential formula.

All of these are harvest plan strategies except

franchising.

In the context of legal forms of business, a general partner in a limited liability partnership

has unlimited liability for any debts or judgments against the firm.

Characteristics of an entrepreneurial firm start-up include all except

having over 100 employees.

The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion.

interactive; linear

Small companies have flourished in the United States because they

respond more quickly to their customers' needs.

What does a potential entrepreneur need to consider when starting a new business?

risk tolerance prior experience personality orientation

Which of the following types of firms do business incubators work best with?

scientific firms

Which of the following is an advantage that small firms have over large businesses?

the ability to respond quickly to changes

The first column in a gap analysis is devoted to various business ideas.

True

Identify a true statement about the process of generating new business ideas.

As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful.

In general, the greater the debt a business owner is willing to take on, the ________ the risk tolerance.

Higher

In the context of legal forms of business, identify a true statement about limited liability partnership (LLP).

In a limited liability partnership, limited partners can work at the firm but not be active in its management.Correct

Some communities offer facilities that house new businesses and provide resources for them. These are called ________.

Incubators

Which of the following is true of robber barons in the context of the history of entrepreneurial businesses in the United States?

They indulged in great abuses in order to succeed in their business.

Identify a defining characteristic of entrepreneurial firms.

They tend to be oriented toward the personal goals of the founder.

A patent is a claim of intellectual property that covers a specific innovation.

True

A person who is passionate about a hobby might be able to turn that hobby into a successful business.

True

A rule of thumb in the founding of businesses has always been that an owner whose business is both a vocation and an avocation is difficult to beat.

True

According to the agency theory, a manager at a large firm is more likely to exploit organizational resources for his or her own benefit than the owner of a small firm.

True

Entrepreneurial Businesses have the ability to make greater profits in markets that have been ignored by larger corporations.

True

In a Subchapter C Corporation, it is possible to have a double taxation situation.

True

In the context of the triggers that encourage new business formations, circumstance motivators tend to result in more of a defensive positioning. Group starts

True

The Americans with Disabilities Act (ADA) applies fully to any firm with more than 15 employees.

True

The Fair Labor Standards Act (FLSA) establishes a minimum wage for all workers, except workers on small farms and administrative employees.

True

The U.S. Small Business Administration

aid(s), counsel(s), assist(s), and protect(s) the interests of small business concerns.

The development and implementation of a new business is part ________ and part ________.

art; science

Years ago, economists mistakenly predicted that small businesses would

be replaced by a smaller number of big businesses.

In the context of supports for new businesses, why are established businesses often hesitant to buy from a start-up business?

because it is not clear if the new business will be able to fulfill an order or service a product in the future.

Successful new business ideas can come from

books and magazines. an individual's background. hobbies.

In the context of entrepreneurial orientation, the presence of ________ often leads young people to be pioneers in an area, as they are not limited by the restrictions of the past.

bounded rationality

In the context of business risks, how can an entrepreneur identify competitors to a new potential business?

by observing what potential customers do to satisfy their current needs or wants

The founders of a small business need to be involved in which of the following tasks when starting the new business?

design funding operating

Which one of the following is a huge advantage for small business owners to start a business?

desire to be one's own boss

James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n) ________.

draw

Carla and John enter into a partnership and form a business. Under the partnership agreement, Carla is directly responsible for the management of the firm and its liabilities. John has a minor financial stake in the firm and works there, but he is not held responsible for the taxes and debts owed by the firm. In the context of the legal forms of business, Carla and John have formed a ________,

limited liability partnership

Before establishing a new business, the first thing founders should do is

list their personal skill sets.

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will

lose only their investment in the business rather than their life's savings.

When should a new business owner ensure there are sufficient financial resources to operate the business?

prior to the start

All of these are potential issues for an owner in a family business except

reprimanding a family member. promoting a family member. firing a family member.

The break-even point is defined as

the level where revenue coming into the firm is sufficient to cover expenses.

The World Bank estimates that one of the strongest factors in the growth of any nation's GNP (gross national product) is ________.

the presence of small and medium-sized enterprises

In a lease, a landowner can enter a business premises for all the following reasons EXCEPT

whenever the landowner wants to.