MGT 4220 SB Ch.5-8

Reverse auctions are:

often used when a business is looking for someone to do work on a freelance basis like designing a website or translating a document.

The ______ section describes the components and supports available for a firm.

organization

The point of indifference is the

price at which a buyer is indifferent about buying or not buying a business.

In a takeover, a buyer or _____ seizes control of a business without the permission of all business owners.

raider

In the context of the situations where a part-time business makes sense, pursuing such a business is usually the only profitable way to seize an opportunity when _____.

the business situation restricts the time in hand to create a business plan

Due diligence is

the process of investigating a business to determine its value.

The ______ section starts with a paragraph showing the overall financial results in sales and profits.

financial summary

The industry is the

general name for the line of product or service being sold or the firms in that line of business.

One of the best predictors that a founder will be successful is

his or her level of experience.

Which of the following statements about a company description are correct? (Check all that apply.)

-In the case of an existing business, it may include its history. -It will include a firm's most recent milestones that have been achieved. -One will read a brief description of the business, e.g., age, current status, location, and the markets it plans to serve.

Which of the following are advantages to buying an existing business? (Check all that apply.)

-The seller will often provide some financing. -The business' plant and equipment and employees are already place. -There are established customers and sales.

Which of the following are one of the four resources that entrepreneurs have access? (Check all that apply.)

-Their own knowledge. -A network of friends and business associates. -Access to capital. -Their own skills and abilities.

The ______ is the post tax income an entrepreneur personally seeks from an business.

magic number

The ______ and ______ section is the second most important section of the business plan, because it describes who will buy the firm's product or service.

market; target customer

A vision statement is a

simple 5 to 10 word statement that expresses the fundamental idea or goal of the firm

Moonlighting is

working on ones own part time after his or her regular job.

The title page typically contains which of the following information? (Check all that apply.)

-Date the version was completed. -Company name. -Contact information including owner names, address, and telephone numbers.

A business' good will is

the value of the business in excess of the value of the identifiable assets.

In the context of a to-do list, which of the following statements are true? (Check all that apply.)

-A to-do list should be with an entrepreneur at all times for it to be effective. -Typically, business owners maintain a to-do list of 6 to 20 items in a week, and they prioritize these items on a daily basis.

A facility that offers subsidized space and business advice to companies in their earliest stages of operation is called a(n)

Incubator

_____ are inventors who use modern techniques like 3-D software and 3-D printers or do-it-yourself electronics to create new items.

Makers

______ is the money left after operating expenses are deducted from a business.

Net profit

Inventors or makers use _____ for idea generation and refinement or funding to bring their products, figuratively and literally, together.

crowdsourcing platforms

Which of the following is generally included in a business plan's table of contents? (Check all that apply.)

-Page numbers for each section. -Major section headings. -Minor sections within each major section.

Which of the following is one of the methods used to estimate the value of a firm's assets? (Check all that apply.)

-Replacement value. -Book value. -Net realizable value.

Which of the following are essentials skills that a successor should have? (Check all that apply.)

-Technical knowledge. -People skills. -Leadership skills. -Knowledge of own limitations. -Financial knowledge.

The single greatest advantage of purchasing a franchise is

getting a complete business system.

Which of the following statements about the generic strategies are correct? (Check all that apply.)

-They are three applicable classic strategies for businesses of all types--differentiation, cost, and focus. -The differentiation and cost strategies are aimed at mass markets. -The term "generic" comes from the fact that they are so widely applicable.

Which of the following is a resource that all entrepreneurs have access to?

A network of friends and business associates.

Which of the following are disadvantages of starting a business from scratch? (Check all that apply.)

-Bank credit is usually hard for a new business to qualify to receive. -A start-up requires a great deal of time to establish. -The business owner will have to attract, hire, and train employees. -A new business has no initial name recognition.

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

-Each business has risks that are specific to it. -How risks are assessed is common among businesses. -Examples of risks include wrong numbers, an inadequate cash cushion, and uncertainty of sales

Which of the following statements are disadvantages of purchasing an existing business?

-It is difficult to value a small business. -The business may have a poor reputation. -Finding a successful business that is right for the entrepreneur can be difficult.

Which of the following statement about test marketing products are correct? (Check all that apply.)

-It is very valuable especially for gaining early customer feedback. -Pioneering business can benefit from test marketing new products or services. -It means to sell a product or service in a limited area, for a limited time.

Which of the following are benefits of own a franchise business? (Check all that apply.)

-The franchisor offers training to new franchisees. -Getting help selecting a suitable location and getting assistance with the construction of the facility. -Being able to purchase a turnkey business with a well-established model.

Which of the following statements about the market section are correct? (Check all that apply.)

-The market refers to the total population of customers that will buy your product/service. -These market section also covers ways it is organized and the channels. -Data that is provided by professional, trade or industry associations can be used in writing this section.

What is the UFOC document that a franchisor provides to a potential franchisee?

It is an important document created by the franchisor that explains the firm's operations, requirements, and costs of owning the franchise

Which of the following are advantages of starting a business from scratch? (Check all that apply.)

-The entrepreneur decides how big or small to keep the business. -The entrepreneur can obtain the latest technologies, the best location, and equipment. -An entrepreneur can build the business to suit his or her preferences. -There are no existing employee problems, debts, law suits, etc.

Which of the following are true of key resource acquisitions? (Check all that apply.)

-They are the only way of purchasing a sole proprietorship. -They are also known as bulk asset purchases.

Which of the following are the advantages of home retail businesses? (Check all that apply.)

-They can be set up quickly and with ease. -The cost of starting a home retail business is low.

The goal of the appendixes section of a firm's business plan is to _____.

provide the most important supporting information that helps explain the significant selling points of the firm's plan

Which of the following are true statements in the context of strategy in the small business? (Check all that apply.)

-A good strategy results in increased survival chances and more profits for a small business. -A strategy may be thought of as a blueprint for planning or a standard for comparison of actions.

A reverse auction is:

an auction in which the low bid gets the business or wins.

A ______ is a document designed to detail the major characteristics of a firm.

business plan

A ______ is the purchase of substantially less than 100% of a business.

buy-in

Industry dynamics

changes in competitors, sales and profits in an industry over time

The ______ provides the reader with the vision or tagline and a brief description of the business in about a paragraph.

Company description

_____ are responsible for advertising and facilitating the sale of businesses for a payment, usually a percentage of the selling price.

Brokers

Which of the following is a benefit of purchasing an existing business?

The business is already successful, so there is good demand for its products and services.

Select the description that defines the term market.

The business term for the population of customers for the business' product or service.

As a firm's successor-to-be, an individual gains responsibility, authority, experience, and skill in various activities and functions of the firm.

True

Which of the following slide categories are included in a pitch deck? (Check all that apply.)

Why Now slide Team slide

Which of the following statements regarding a cover letter are correct? (Check all that apply.)

-Traditionally cover letters were done on business stationery. -Readers usually read the cover letter first, so it should be well written. -The cover letter is a one-page document that introduces the business plan and owner and indicates why the recipient is being asked to read it.

Which of the following is an example of an initial goal decision? (Check all that apply.)

-What is the product and/or service idea.? -Whom the target customer will be? -What is expected out of the business?

In the context of the mechanics of pitching, which of the following is a true statement?

An entrepreneur presenting a pitch deck should use his or her own laptop or tablet.

Where is the company name, contact information, and version date are found in a business plan?

Title page

A transfer is a(n)

endgame strategy in which ownership is moved from one person or group to another.

_____ refers to the notions and actions that explain the profit-making means of a firm.

Strategy

______ strategies are three widely applicable classic strategies for businesses of all types-differentiation, cost, and focus.

Generic

In the context of storytelling arcs, the greater time available to a firm owner when pitching means he or she can engage prospective clients in telling more of a tale about how he or she recognized and solved a problem.

True

Franchising is defined as a legal agreement that _____.

allows one firm to operate using the name and business processes of another firm

A business plan's ______ are a listing of the major plan's headings and sections along with the page number.

table of contents

Which of the following is a major questions that part-time entrepreneurs should ask before starting their business?

-How to organize the business as far as permanence? -What kind of products and services to sell? -How to organize the business as far as cost and time?

Which of the following statement about business plans are correct? (Check all that apply.)

-It details the firm's product or service, industry, market, operations, and financial outcomes. -An important reason to create one is to gain external legitimacy. -It is a document designed to detail the major characteristics of a firm.

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

-Often a gradual transfer to the heir should take place. -One should not wait until his or her death to transfer ownership of the business. -A comprehensive succession plan should be created far in advance of a planned transfer.

Which of the following statements regarding moving from being a part-time to full-time entrepreneur are correct? (Check all that apply.)

-The business has to be able to be the entrepreneur's main source of income. -Using an employer's transition services, such as COBRA health coverage, can help. -Sometimes an indicator of the right time to become a full-time owner is when there is a big contract or sale.

Which of the following statements are disadvantages of purchasing an existing business? (Check all that apply.)

-The business may be declining, because of new technology that is being used by competitors. -Existing employees may be resistant to change. -The facilities and equipment may be obsolete or in need of major repair.

Which of the following statements regarding the financial summary section of the business plan are correct? (Check all that apply.)

-The financial projects should be conservative. -It often has a summary table showing the business' expected sales and profits. -The summary is followed by "the ask" for funding.

Which of the following are true of a pitch deck created for online access? (Check all that apply.)

-It should include enough slides to ensure people understand the basics of a firm's business. -It should convey an entrepreneur's thinking without him or her being present in person.

Which of the following organizations can provide assistance with transfer of ownership issues and questions? (Check all that apply.)

-Family Firm Institute. -Business broker association. -Experts such as attorneys and accountants.

Which of the following statements about home-based businesses are correct? (Check all that apply.)

-Home-based businesses represent 33% of all firms. -Many retailing and wholesaling businesses are home-based. -Often times inventory is stored at the entrepreneur's home.

The ______ refers to an online repository for the documentation that back ups and details the specifics of the firm's business plan.

data room

Licensing is

documented permission from the government to run one's business.

Which of the following statements regarding employee managers are true? (Check all that apply.)

-Employee managers who run a small business are often would-be entrepreneurs. -One benefit of becoming an employee manager is the opportunity to run a small business while avoiding the risks. -Finding experience professional managers who are willing to work for a small business owner are difficult to find.

Which of the following are true of an elevator pitch? (Check all that apply.)

-It has four success factors: hook, solution, support, and ask. -It is used when someone asks for more detail after hearing a concept.

Which of the following statements regarding the organization section of the business plan are correct? (Check all that apply.)

-It has to communicate to the reader that the firm is structured to make the best use of both the internal and external people. -Its goal is to convince the reader that the business will be successful due to the high-quality people involved with the business. -The section contains information on key personnel and related service providers.

Which of the following statements about the executive summary are correct? (Check all that apply.)

-It is a key component of a business plan because it is often the first part that is read. -It is typically one page in length. -It usually describes a problem, product, market, competitive advantages, the team, and a financial summary.

Which of the following aspects of a business can a business owner consider including in the appendixes section of a business plan? (Check all that apply.

-Results of pilot sales efforts, if any, to prove market acceptance -Specifications of pictures of the products or services offered

Which of the following are true of takeovers? (Check all that apply.)

-They are only possible in businesses with freely transferable stock. -They are hostile events.

Which of the following are the two major questions that must be decided in becoming a part-time entrepreneur? (Check all that apply.)

-What kind of product or service to be offered? -How does the entrepreneur want to organize the part-time business?

Which of the following are situations that may be apt for starting a business on a part-time basis? (Check all that apply.)

-When an entrepreneur is uncertain of the requirements of a full-time business -When an entrepreneur wishes to gain basic experience

Which of the following is true of brokers?

Brokers are always trying to get the highest price.

An advantage of a start-up is that the owner of the start-up can make use of "legacy" locations, buildings, software, and equipment to boost productivity.

False

Professional management is an issue of a person's education and credentials.

False

A business model in which the entrepreneur arranges a customer to host a party, inviting friends, family, and neighbors is called

Home party

______ is a combination in which the whole is greater than the sum of its component parts.

Synergy

Which of the following statements about the number of home-based business is correct?

There were about 9 million U.S. home-based businesses in 2012.