ENT chap 1
new business triggered by circumstance motivators
They staying power of these businesses is determined by the other competing opportunities; they are opportunistic start-ups
Cash flow, management team, and competitive advantage are key criteria presented in the _______________ plan that provide essential information to potential investors.
business
The process of business development from scratch and the process followed by established businesses are ____________.
different
A difference between entrepreneurial businesses and venture capital-backed firms is that...
entrepreneurial business' resources are more constrained than those of venture capital-backed businesses
three types of specific risks
Financial; Strategic; Market retaliation
Which of the following are reasons for the recent growth in the number of women starting new businesses?
Frustration with the glass ceiling; greater control over work-life
steps in the process of generating ideas do not occur in a _________ fashion but should occur in an __________ manner
linear; interactive
often for only a few dollars each and are made directly to entrepreneurs to encourage self-development in developing nations
microloans
The initial analysis is a process of:
moving from three to five ideas to a single idea
the business owner whose business is both ____________ and ____________ is difficult to beat.
vocation; avocation
75% of self-employed millionaires are _______
entrepreneurs
Recent trends indicate that larger corporations have been ___________ , while entrepreneurial businesses have been ____________ rapidly.
downsizing; growing
Which of the following are required in the initial analysis of a business opportunity?
focus; financial investments; time
characteristics of venture capital-backed firms
formed with a harvest plan in place; either start or grow quickly to employ a relatively large number of employees; have a developed organizational structure
threats to operational financing
high development costs; rapid expansion costs; high inventory needs; an entrepreneurial team with a low asset base
Students need to consider their own resources and abilities early when they think about starting an entrepreneurial business because of the ___________
importance of an owner to a new business
The business plan for a new entrepreneurial business is developed to serve as a guide to manage the business, to provide potential investors with critical information to evaluate the business, and to:
provide a self-evaluation
entrepreneurial business' resources are more constrained than those of venture capital-backed businesses
true
one-page pitch sheet
unique document that clearly lays out the crucial information about a new business idea and provides an effective starting point for every potential employee, investor, or supplier
What is provided by the Economic Gardening program in the US?
Financing for the venture; support classes; tax incentives
Which periodical is published annually and documents the 500 largest corporations by sales in the U.S.
Fortune
economies of scale
When it is easier for a large firm to produce large volumes of item than it is for a small firm to produce smaller volumes of item; condition that allows the long-run average cost to continue downward as production increases
Agency theory
a managerial theory that believes individuals act to maximize their own benefit
Which of the following statements about agency theory are correct
agents often maximize their own benefit; owners always act to maximize the value of the business; managers are considered agents
Large firms can sometimes do things more efficiently because of their ability to operate on a larger scale than can a small firm. This implies that large firms obtain __________ in some industries.
economies of scale
Which are ways an entrepreneurial business can act as catalysts for societal change
entrepreneurial businesses are willing to pursue smaller markets ignored by larger firms; entrepreneurial businesses have an understanding of the local community
Civic leaders often look to who as a means to promote economic strength for a community, region or state?
entrepreneurs
The desire to own and operate a business is the ________ step in entrepreneurship
first
which of the following are required in the initial analysis of a business opportunity
focus, financial investments, time
Silicon Valley and Boston's 128 corridor are well known for:
generating new employment with entrepreneurial ventures; providing a growing tax revenue base; providing a basis for significant improvements to the area's economic vitality
Unlike the business plan of a venture capital-backed business, the entrepreneurial business plan is developed as a __________
guide for the running of the business
A ________ plan is a plan to exit the business that allows the investors to take advantage of growth.
harvest
Individuals outside an industry are able to establish a new business in a manner not previously considered because they __________
have bounded rationality DEF: rational decision making that is constrained by the background and history of the person making the decision
Why are hobbies a good skill source
hobbies require the development of specific skills; individuals are passionate about their hobbies
characteristics of gap analysis methodology for a new venture using a chart
it is a reasonably quick analysis; it requires minimal research
People in entrepreneurs network can help by providing ________ to a new business.
legitamacy
Threats to business success
operation financing; profit margin; sales generation schemes
An __________ that uses your education is a potential source of a business.
opportunity
There are successful business people in all _______ categories
personality
The triggers for starting a business can come from either _________ or negative stimuli that occur in the individuals life
positive
Which often leads young people to be pioneers in an area that are not limited by the restrictions of the past?
presence of bounded rationality
"science" entrepreneurial business development
process of forming and managing a new entrepreneurial business in a clear, sequential manner that is rich in practical application and grounded in research
The process of forming and managing a new entrepreneurial business in a clear, sequential manner that is rich in practical application and grounded in research is the ___________ part of entrepreneurial business development.
science
a harvest plan may include:
selling it to a group of investors; participating in a public offering of stock; selling the business to another firm
By providing resources that new businesses cannot otherwise afford on their own, incubators can help these businesses establish_______________
some level of legitimacy
_____-_______ point is when a business has reached a level where the revenue coming into the firm is sufficient to cover its expenses
break-even
World bank says, the presence of entrepreneurial small and medium sized enterprises is one of the strongest factors in the growth of any nations _________
(GNP) gross national product
steps that are important to the development of a quality business idea
1. list and evaluate one's personal skills 2.Analyze the market and look for a gap or a need that is not being met effectively (gap analysis) 3. Compare one's ability to fill the identifies gaps with an opportunity available
women of color account for _______ of businesses headed by women
1/3
When was the initial development of the large industrial base of the US
1880's
venture capital-backed business plan has how many pages
25-45
The US government considers any business with fewer than ______ employees to be a small business; The European Union considers any business with fewer than ________ employees to be a small business.
500; 50
The repayment rate on microloans is typically ________
99%
What happened regarding the closure of military bases in the US?
Cities with base closings offered tax breaks and programs to support new businesses; cities with base closings experienced higher income growth; cities with base closing experienced increases in new businesses
family experiences that build knowledge and can grow into a new business opportunity
Cooking with family members; tracing family history; working on the house; maintaining the family property
Websites that help a company reach out to a wide community online to get funding and often advice in the process of raising those funds
Crowdfunder.com; Kickstarter.com
What are critical elements that an entrepreneur must solve for success?
Develop an ability to generate consistent and growing sales; sustainable operating profit margin; sufficient resources to get the business to a point where it is self-funding
What program is growing across the US to help start new entrepreneurial businesses in an area?
Economic Gardening
The underlying philosophy of the ________ test is that people are a result of all the experiences of their life.
Enneagram
identify typical triggers for starting a business
Experiencing the inability to climb the corporate ladder due to circumstances; receiving evidence that an idea is not only doable, but there is a concrete way to improve on a given problem; being spurred o action by attending a seminar, reading a book, or talking with successful entrepreneurs.
"Family Business" is synonymous with "Family Office."
False
All entrepreneurial ventures are high tech/high growth.
False
Entrepreneurship is a guaranteed path to economic success
False
The Great Depression of the 1930s was harder on larger more mature businesses than on entrepreneurial businesses
False
True or False: Every business in the Fortune 500 started out as a large corporation.
False
reasons why entrepreneurial business are successful
Fewer layers of management; tends to be more focused than large corporations; free to place energy into satisfying the needs to customers
what businesses would most likely be pursued by individuals who do not prefer to work with people
Internet-based businesses; order fulfillment; bookkeeping
What is true regarding the Great Depression of the 1930's
It encouraged industrial concentration
Which of the following are pairs of variables in the Myers-Briggs test?
Judgement-perception; sensing-intuiting; extroversion-introversion; thinking-feeling
identify the reasons individuals can become frustrated with working in a large corporation
Lack of promotion opportunities; inflexibility of large corporations in dealing with the needs of an individual's family and children
In what time period did the US see a decline in large multinational firms and a rise of new opportunities for entrepreneurial businesses
Late 1970's to early 1980's
components of the entrepreneurial orientation concept
Personality orientation, prior experience, risk tolerance
Which are important elements of a one-page pitch for your business?
Product offering; business model; customer problem
Which act officially organized the US Small Business Administration (SBA)?
Small Business Act
__________ include key suppliers, customers, and employees. These individuals are critical to the success of a business.
Stakeholders
Big Five test
The researchers surveyed thousands of individuals; it was developed by two independent research teams; the five factors emerged from the researcher's analysis of the data AND open-mindedness; extroversion; emotional stability
Which of the following descriptions are characteristics of entrepreneurial firms?
The start-up is self-funded or closely funded; The operation is designed in the image of the founder; The number of employees will not be expected to grow beyond 100
Which of the following is true of entrepreneurial firms?
The structure of management is designed to take advantage of the skills of the founder or founders of a firm.
What significant, historical event marked the beginning of the decline of entrepreneurial businesses in the US?
World War II
Statements regarding personal motivations
entrepreneurs who are driven by pm often make career and life-altering changes regardless of practical advice; entrepreneurs who are driven by pm are often more proactive; entrepreneurs who are driven by pm more relentlessly pursue their goals
large businesses often have
extensive written procedures
If individuals are not detail oriented, then a business that is procedurally complex and involves managing a wide variety of taste may be appropriate
false
gap analysis includes
finance; time; risk; nonfinancial resources; competitors DEF: method used to identify an opportunity that exists between the demand for a product and the supply provided by firms in the market
Organizational slack
provides larger firms flexibility; not a characteristic of typical entrepreneurial ventures; refers to an excess of resources; def: an excess of resources in an organization that allows for redundancy and the quick deployment of personnel
Glass ceiling
refers to the fact that women and minorities may be hired by large firms but they experience limits placed on their advancement within the firms
Enneagram 9 personality types are
reformer; helper; achiever; individualist; investigator; loyalist; enthusiast; challenger; peacemaker
process of generating ideas
requires iteration; requires consideration; requires interaction
Profits =
revenues minus Expense
what's included in the first column of the chart used in the gap analysis?
the business idea; a brief explanation of the idea
venture capital start-ups
they are often formed as high-tech ventures consisting of unique characteristics;
What is true of robber barons
they dominated the industrial sectors; they were responsible for some of the great abuses in business; they took advantage of the economies of scale
What is true about incubators
they provide common receptionists to new businesses; they provide office machines and basic furniture to new businesses; they provide many critical services to new businesses DEF: a facility that houses new businesses and provides many critical services
circumstance motivators
they tend to result in more of a defensive positioning; they results from environmental changes
New business owners need to be sure that the level of risk is consistent with their ________, __________ and _________
Background, values, family situation
The Income Statement is one of the Financial Statements that also includes...
Balance Sheet and Cashflow Statement
Which of the following statements are true regarding robber barons?
They were responsible for some of the great abuses in business; They took advantage of the economies of scale; They dominated the industrial sectors
The United States Small Business Administration was organized to:
aid, counsel, and protect the interests of small businesses; provide information at all levels of organizational development for entrepreneurial businesses; provide assistance at all levels of management for entrepreneurial businesses.
The finance category on the gap analysis chart examines the:
amount of money require to start a business; amounts of money required to operate a business; amount of family resources that could be committed
The practice, example, and the skill of the founder is the ___________ part of entrepreneurial business development.
art
What's included in the second column of the chart used in the gap analysis?
categories of analysis
Which of the following need to be evaluated in order to provide potential investors with the critical information required when developing a business plan for a new entrepreneurial business?
competitive advantage; cash flow; management team
synergy through a founding team includes
competitive advantage; understanding of an industry; skill set
A business that is procedurally complex and involves managing a wide variety of details may be appropriate for individuals who are __________
detail oriented
a business that is procedurally complex and involves managing a wide variety of details may be appropriate for individuals who are _________
detail oriented
Along with being properly financed and developing sustainable profit margins, in order to be successful, entrepreneurs must...
develop an effective sales generation model