Entrepreneurship Test 1 (McGraw Hill Ch 1-3)

List the steps that are important to the development of a quality business idea. Start from the first or initial step.

1. List & evaluate one's personal skill sets 2. analyze the market and look for a gap or a need that is not being met efficiently 3. compare one's ability to fill the identified gaps with an opportunity available

When was the initial development of the large industrial base of the United States?

1880s

A venture capital-backed business plan typically runs from _____ pages long.

25-45

The European Union considers any business with fewer than _____ employees to be a small business.

50

________ is a managerial theory that believes individuals act to maximize their own benefit.

Agency theory

In the context of nonfinancial resources, which of the following are to be considered in a gap analysis for a new business? (Check all that apply.)

Special contacts with suppliers Special contacts with customers Physical location of the business

True or false: Small businesses have greater flexibility in responding to changes that take place in their external environment.

T

Personality tests should help you better understand yourself and your strengths and not be used as a guide for your

career

What is included in the second column of the chart used in the gap analysis?

categories of analysis

A founder or founding team must have synergy, which is a combination of: (Check all that apply.)

competitive advantage skill set understanding of an industry

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

People in an entrepreneur's network can help by providing ______ to a new business.

legitimacy

The initial analysis is a process of:

moving from 3 to 5 ideas into a single idea

Excess resources in an organization that allow for redundancy and the quick deployment of personnel in crisis are referred to as

organizational slack

The process of business development from scratch and the process followed by established businesses are ______.

quite different

Research suggests that successful new business ideas are NOT determined by your: (Check all that apply.)

race. parents. gender. religion.

All new businesses have an inherent amount of ________ associated with the starting and operation of the business.

risk

Potential entrepreneurs must understand their level of tolerance to

risk

In hobbies and activities, individuals develop specific ______ to the hobbies.

skills

The World Bank estimates that one of the strongest factors in the growth of any nation's GNP is the presence of entrepreneurial _____ enterprises.

small & medium sized

Individuals or other organizations that may impact the success of a business and depend on the success of the business for their own livelihood are known as ______.

stakeholders

Entrepreneurs can examine business risk by considering three threats to business success. Those three threats are: (Check all that apply.)

threats to the profit margin. threats to sales generation schemes. threats to operational financing.

Each type of business started will require different _______ frames.

time

Examining ______ around the region, nation, or world that may not have reached a particular location is one way of identifying business opportunities or gaps.

trends

Starting a business is often the result of an event or condition within an individual's environment called a(n)

trigger

Which of the following descriptions are characteristics of entrepreneurial firms? (Check all that apply.)

startup is self-funded operation is designed in the image of the founder the number of employees will not be expected to grow beyond 100

True or false: The Myers-Briggs test is one of the most widely used personality tests.

t

Which of the following statements is true of venture capital start-ups?

the are often formed as high-tech ventures consisting of unique characteristics

What are included in the first column of the chart used in the gap analysis? (Check all that apply.)

the business idea a brief explanation of the idea

The greatest advantage of an entrepreneurial business is that it is owned and run by

the same person(s)

Identify a characteristic of venture capital start-ups.

they are inherently risky operations whose growth is dependent on the exploitation of the unknowns in the market

Identify the guidelines that should be ideally followed by entrepreneurs to create business plans for new entrepreneurial businesses. (Check all that apply.)

An entrepreneur should create an attractive, one-page pitch about the business while developing the business plan. An entrepreneur should understand that a business plan should be created in pieces with each piece fitting into a whole picture.

What program is growing across the United States to help start new entrepreneurial businesses in an area? Multiple choice question.

economic gardening

What is the condition that allows the long-run average cost to continue downward as production increases?

economies of scale

Large businesses often have _____.

extensive written procedures

Personality tests can _____.

help one better understand one's traits and tendencies

The greater the debt an entrepreneur is willing to take on to start the business, the _________ his or her risk tolerance.

higher

What are the critical elements that an entrepreneur must solve for success? (Check all that apply.)

sustainable operating profit margin sufficient resources to get the business to a point where it is self-funding develop an ability to generate consistent and growing sales

The first category of start-up businesses are those formed as high-growth, often high-tech, ventures and are referred to as ______.

venture capital-backed firms

What is the suggested starting point for generating business ideas?

Analyzing the skill set of the potential founders

The underlying philosophy of the ______ test is that people are a result of all the experiences of their life.

Enneagram

Which of the following statements regarding personal motivations are correct? (Check all that apply.)

Entrepreneurs who are driven by personal motivators often make career and life-altering changes regardless of practical advice. Entrepreneurs who are driven by personal motivators are often more proactive. Entrepreneurs who are driven by personal motivators more relentlessly pursue their goals.

True or false: Robber barons were responsible for the collapse of small businesses in the 1880s.

F

True or false: Every business in the Fortune 500 started out as a large corporation.

False

Which of the following are questions an entrepreneur should answer regarding work experience? (Check all that apply.)

In what areas would you be considered an expert? In what businesses have you worked? What aspects of the job were most enjoyable? What skills were critical to the jobs you performed?

Which of the following questions could be explored to identify additional skill sources? (Check all that apply.)

In what industry would I prefer to work? What type of magazines and books do I read? What skills were involved in the three greatest accomplishments of my life?

Which of the following is a principal cause of new business failure?

Insufficient financial resources at founding

Identify a characteristic of a gap analysis for a new venture.

It is supposed to be completed by the entrepreneur or entrepreneurial team.

Identify a true statement about organizational slack.

It provides large organizations with flexibility that is unavailable to the typical entrepreneurial venture.

Which of the following statements is directly associated with the circumstantial motivators for starting a business?

The staying power of an opportunistic start-up is mainly determined by other competing opportunities.

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.

Which of the following are ways entrepreneurial businesses can act as catalysts for societal change? (Check all that apply.)

entrepreneurial businesses are willing to pursue smaller markets ignored by large corporations entrepreneurial business have an understanding of local community

A difference between entrepreneurial businesses and venture capital-backed firms is that _____.

entrepreneurial businesses resources are more constrained than those of venture capital-backed businesses

Civic leaders often look to ______ as a means to promote economic strength for a community, region, or state.

entrepreneurs

The ______ 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 firm.

glass

Identify a finding of the federal General Accounting Office's (GAO's) analysis of the impact of the closure of military bases.

in cities w base closings, several new businesses rose up to fill the economic gap that had resulted from the closings

Which of the following sources of skills for a new business is often the most overlooked?

Family experiences

Which periodical is published annually and documents the 500 largest corporations by sales in the United States?

Fortune

Once a list of skills, abilities, and interests has been developed, the next step is to:

perform a gap analysis

The triggers for starting a business can come from either __________ or negative stimuli that occur in the individual's life.

positive

Which of the following businesses could be most likely pursued by individuals who do NOT prefer to work with people? (Check all that apply.)

Order fulfillment Internet-based businesses Bookkeeping

__________ motivations come from the individuals themselves.

Personal/Self

Identify the typical triggers for starting a business. (Check all that apply.)

Receiving evidence that an idea is not only doable, but there is a concrete way to improve on a given problem Experiencing the inability to climb the corporate ladder due to circumstances Being spurred to action by attending a seminar, reading a book, or talking with successful entrepreneurs

Which act officially organized the United States Small Business Administration (SBA)?

Small Business Act

The success of entrepreneurial businesses occurs because they are simply more _____ than their larger corporate counterparts.

focused

Research suggests that successful new business ideas are NOT determined by your: (Check all that apply.)

gender parents race religion

Which of the following are goals of the business plan for a new entrepreneurial business? (Check all that apply.)

provide self-evaluations a guide to managing the business to provide investors w necessary info

The Fortune 500 is published annually by Fortune magazine and documents the 500 largest corporations (by ______) in the United States?

sales

A personality test can help one ____ (in regards to the business)

select the type of business to start

An individual's hobbies and past work experience contribute to the individual's personal _____ set.

skill

Without the needed _____, the founders would be faced with not holding any advantage over the competitors who have the necessary depth in the area.

skill

In the context of businesses listed in Fortune 500, Henry Ford (Ford Motor Company), Steve Jobs (Apple), Ralph Lauren (fashion), and Sam Walton (Walmart) all started out as _____.

small-business owners

True or false: An entrepreneur's prior experience places boundaries on what he or she will consider when making decisions.

T

Which of the following statements regarding entrepreneurial businesses are correct? (Check all that apply.)

They are generally dependent on a single person or a few individuals. They have limited flexibility in responding to emergency issues such as the need to hire replacements if the company loses key individuals.

Identify a true statement about the circumstantial motivators for starting a business.

They tend to result in more of a defensive positioning than do personal motivations

What is the method used to identify an opportunity that exists between the demand for a product and the supply provided by firms in the market?

gap analysis

Which of the following statements are true regarding education as it relates to skill sets? (Check all that apply.)

Knowledge gained from formal education provides a skill set. Technology skills acquired through education can be particularly valuable. An opportunity that uses your education is another source of a business.

Which of the following are advantages that small, new businesses have? (Check all that apply.)

Small businesses are owned and run by the same person(s). Small businesses can respond quickly to opportunities or threats as they arise. Small businesses fill niches that large firms simply cannot afford to fill.

True or false: An entrepreneur's risk tolerance, prior experience, and personality orientation shape their analysis of a business idea's potential.

T

Which of the following are true regarding the process of generating ideas? (Check all that apply.)

The process typically requires interaction. The process typically requires consideration. The process typically requires iteration.