Entrepeunership Final

The firm's mission statement:

D. All the responses are correct

_____ is an organization form that treats the firm as a unique entity:

D. Sub chapter C Corporation

A ____ is an agreement between two parties to perform certain activities for some consideration:

A. Contract

_____ demonstrates how a set of activities are dependent upon each other and which activities take the longest time:

A. Critical path chart

A ____ defines companies within a specified geographic radius that will be in direct competition for the same customers:

A. Industry

A company seeks to have inventory present only shortly before it is used: This is called:

A. Just-in-time inventory

_____ is the threat to the success of a new business related to its ability to establish and maintain a high margin product of service:

A. Profit margin

___ are promotions that are strictly financial agreements in which a business pays for some outputs, such as TV advertisements :

A. Pure promotion

A tool to better understand competitors and their capabilities is:

A. competitive map

A small business plan is developed with certain goals in mind, which of the following is not a goal:

A. comprehensive (30 to 45 pages)

An investment in the firm by the owner is called:

A. equity

There are special funds, neither equity nor debt, that do not require repayment and are designed to aid businesses in specific areas:

A. grants

The timing of a new business is a function of all the following except:

A. line of credit

When a corporation suffers loses, the founders will:

A. loose only their investment in the business

A ___ describes estimates by the small business owner of what the balance sheets and income statements will look like in the future:

A. pro forma

The acid test is also commonly kwown as the:

A. quick ratio

A small business owner plays a _____critical role than the senior leadership of a large company

A. more

Debt is a form of ____ financing:

B. non-equity

All of these are advantages for a small business except:

C. Economies of scale

The potential entrepreneur needs to consider ____ when starting a new business:

D. All of the responses are correct

TEST 4: Human resource management include ___ the individual:

D. All of the responses are correct (hiring, inspiring, managing)

The term for when a new business has reached a level where revenue coming into the firm is sufficient to cover expenses:

D. Break-even point

_____ are resources which combine to allow a firm to do things better than its competitors:

D. Capabilities

TEST 2: The first step of an external analysis is to:

D. Determine in which industry the new business will compete

According to a recent study by the National Federation of Independent Businessmen's Foundation, new products ideas for small business start ups originate from all of the following except:

D. Existing records of a business

An entrepreneur can not leave his or her business due to the amount of money that was invested. This is called:

D. Exit barrier

The process of systematically examining the difference between what is expected and what occurs is called:

D. Gap analysis

This is a document that describes the job that is to be filled:

D. Job description

Michael Porter states there are two means to view business strategy:

D. Low cost and differentiation

The new business person should be guided by ____ to develop a critical path chart:

D. Operational data

Pricing something that ends in 9 cents making a big difference in the buying of the product. This is because of a consumers:

D. Perception

The two primary motives for small business owners to start a business are

D. Self-employed and potential for personal rewards

TEST 3: ___ is the simplest form of a business to establish in that the person who owns it and the business itself are treated as the same:

D. Sole proprietorship

A small retail center located along a major road is called a ____

D. Strip shopping center

___ promotions has very limited financial cost, but have time commitment requirements from individuals in the firm:

D. Virtually free

In a partnership it is expected that the founders will contribute to the founding of the firm with:

D. any of the responses could be correct (cash, services, property)

A job offer is finalized by _____

D. candidate signs the offer

When Target buys more ad space in large volume, this is called:

D. economies of scale

Omaha Nebraska offer facilities that house new business and provide resources for them. These are called:

D. incubators

A competitive advantage in business could be ____:

D. All of the responses are correct

___ examines how far the company turns credit sales into cash.

B. Accounts receivable turnover

___ are high net-worth individuals that invest in business not as a business,but as an individual

B. Business angels

Small business resources are more ___ than large firms:

B. Constrained

All of these are sings to identifying a sustainable competitive advantage except:

B. Develop a list of all potential customers

If a small business has employees, the business must have a:

B. Employer Identification Number (E.I.N)

This theory states that we all judge how we are treated relative to how we see others being treated:

B. Equity theory

Glass ceilings in a large corporations involve:

B. Limits to the level of opportunity to the corporate hierarchy.

In forming a new business, the first thing a founder should do is:

B. List their personal skill set

*New business should try to ___ the amount both fixed and total assets in order to conserve cash.

B. Minimize

___ promotion cost something but also has an element of community:

B. Mixed model promotion

____ is a series of ratios along four areas of company performance (liquidity, activity leverage and profitability) that provides a picture of the health of the company.

B. Ratio analysis

All of the following are triggers to start a new business except:

B. Risk Level is intolerable

TEST 1: ______ is the growth engine of the economy:

B. Small business

*As more competitors enter the radius for the business, the radius grows _____:

B. Smaller

___ insurance covers liability for workers who are injured on the job:

B. Workers compensation

A ___ is a summary of the assets and liabilities of the small business

B. balance sheet

This accounting system recognizes expenses as they are paid and recognizes revenues as generated:

B. cash based

James has the benefit of gaining customers loyalty by being the first company to bring out a new gourmet burger. This is a form of:

B. first mover advantage

In the Philo Asian Grille study, during the initial start up period, expenses were _____ than expected

B. higher

The greater the debt the owner is willing to take on a new business the ______ the risk tolerance:

B. higher

A Board of Advisors should have both ___ and ____ to assist the small business owners:

B. insight, experience

When the small business owner is doing job advertising, the company needs to attract the ____ pool of applicants to choose from:

B. largest

*Dennis measures the short term ability of his company to meet its obligation. He would use ____

B. liquidity ratios

A ____ is a contractual agreement where the business receives money that must be repaid over a period of time:

B. loan

Once a small business owner defines the geographic area, the next step is to define the ____ segment of the market that it is seeking to serve.

B. particular

A ___ exists if the service or product performs a similar function:

B. substitute

A small business has _______ formal procedures as compared to a larger firm to operate the company:

B.Few

___ is working with and learning from a company outside of your industry that has a skill that is critical to the firms operation:

C. Benchmarking

____ is a national decision making process that is constrained by our experiences, history, and culture:

C. Bounded rationality

When the small business owner pays an individual a percentage of sales; this is called a ____

C. Commission

A small business determines the cost and then adds some level of profit determined to be appropriate:

C. Cost-plus pricing method

When defining potential customers an owner must:

C. Define a specified radius around the business

In the Rodriguez Family Auto Repair Shop case, Alex realized in order to be competitive against larger firms he needed to:

C. Develop rapport with his customers

___ funds are funds received by a business in exchange for a percentage ownership of the company:

C. Equity

The Fortune 500 companies employ _____ employees than 10 years ago.

C. Fewer

There are two types of partnerships:

C. General, limited

Promotion of a product or service is considered as:

C. Marketing

Fragmented markets have:

C. No clear dominant competitors

_________ occurs in large companies that have excess resources:

C. Organizational slack

A ___ is a claim of intellectual property that covers a specific innovation

C. Patent

A harvest plan in a small business means the owners is:

C. Planning to exit a small business

____ is a useful measure when there is separation between management and ownership in view of performance:

C. Profits

This term means a set amount of compensation for a given time period:

C. Salary

___ is an analysis by the small business owner of the best and worst case scenarios:

C. Sensitivity analysis

Individuals or other organizations that impact the success of a business are called:

C. Stakeholders

Marketing efforts that require little capital are called:

C. bootstrap marketing

A ____ is a listing of each type of activity and each asset within the company.

C. chart of accounts

These ___ costs must be paid no matter how many goods are sold:

C. fixed

In a limited partnership there must be a :

C. general partner

Company analysis should proceed from the___ and move toward the ___

C. general, specific

Hiring a consultant is expensive, but it also _____ the insights that could be obtained:

C. limits

John needs to know who his customers are and how to attract them. He needs a ____:

C. marketing plan

According to the book, the most dangerous situation for a new business is:

C. rapid growth

The largest group of new business owners is:

C. women

*If the current ratio is just over 1.0 it reveals to the company they have just enough money to meet ___ percent of its short term obligations:

D. 100

The cash flow statement is used to describe ___ percent of the activities that provide and use cash during a specified period of time:

D. 100 percent

What percentage of business has a production process:

D. 100%

When completing a conceptual map, an entrepreneur needs to visit _____ potential competitors:

D. 100%

*____ measures the efficiency with which the company can handle its resources:

D. Activity ratio

_____ states the individuals act to maximize their own individual benefit:

D. Agency theory