New Venture Creation Quizzes
Angel investors prefer to invest in local businesses and are flexible about the Return on Investment (ROI) they receive.
true
The good thing about buying a franchise is there are no upfront fees or ongoing royalties you have to pay.
false
Friends and family members are almost never a source for equity financing.
false
Going public is a great way to secure low cost debt financing.
false
Having a strong purpose for your business makes your work more enjoyable, but it generally does not improve your probability for success.
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If you are not willing to give up all of your hobbies, interests, and other activities, you will not be able to build a successful business.
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If you buy a company for $300,000 that is producing $100,000 in net income you will immediately earn a 50 percent return on your investment.
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It is best to select core team members based on the skills they possess first and their character second.
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It is best to write a full business plan first, and then develop a business model just before launching your new venture.
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It is very difficult for younger entrepreneurs to buy an existing company because it requires a large amount of capital.
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Knowing your industry may help, but most business successes come from simply being in the right place and the right time.
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The best primary mentors know your strengths and weaknesses, understand business, are passionate about what you are doing, and have lots of contacts.
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The best way to gain industry experience is to work in that industry.
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The more you know about the industry in which you launch your business, the greater your probability for success.
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The ultimate validation of your business concept is to line up a number of customers who commit to buy your products or service as soon as you launch your venture.
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There are a wide variety of business models companies can use to make money.
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Three viable ways to learn about an industry are to work in it, work in a related industry, or regularly use the products and services.
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Through networking, a couple of primary mentors can help you find ten good contacts that can help you build your business.
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Two critical concepts to keep in mind when building a business are effectiveness and efficiency.
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When trying to secure debt financing through a bank, the loan officer will want collateral to secure the loan such as your car, house, and other possessions.
true
When you start a business in an industry if which you have worked you usually know the customers, competitors, suppliers, channels of distribution, and missing pieces.
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When your customers love your business purpose they generally won't shop for the same products elsewhere.
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Your new business will have the highest probability for success when discover a genuine need, have experience in the industry, create a low-cost prototype, find some early buyers, and can make money with your business.
true
A "sledgehammer" solution is one that gets the job done with minimal resources.
false
A full business plan is shorter than a typical business model.
false
A good idea is the most important factor in the success of a new business.
false
A high percentage of entrepreneurs who build successful businesses have had no experience in their industry whatsoever.
false
A lot of serious and regular product users try to start businesses, but the failure rate is very high for this group.
false
A strong purpose for building an excellent business is to make as much money as you can, as fast as you can.
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A true business opportunity exists when you have these factors present: a large market, adequate funding, unique intellectual property, and several strong partners.
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Millennials are attracted to new technology and edgy products, but they generally don't care about corporate values or social responsibility.
false
Most mentors will expect to be paid, so it is important to add funds in your startup budget for advisory services.
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Most successful entrepreneurs build the same company they set out to create.
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Most successful entrepreneurs use debt financing to fund their business startups.
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Nearly all successful entrepreneurs start off by writing a full length business plan.
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One highly successful approach to building a business is to raise funding, work on your product until it is near perfect, and then launch an aggressive marketing campaign to find potential customers.
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One of the most important things you need to start a new business is enough funding to get you through the first two years.
false
Sources for equity financing include credit cards, trade credit, private lenders, and the Small Business Administration.
false
Successful entrepreneurs are good at finding key people, but are reluctant to create a sense of ownership for team members.
false
Successful entrepreneurs build three types of teams: friends and family members, experts in the industry, and financial advisors.
false
Successful entrepreneurs seek financial resources first, and then find nonfinancial resources when necessary.
false
The best way to determine what skills your company needs and which ones you possess is to meet with a counselor and complete a battery of tests.
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The best way to find mentors and advisors for your Brian Trust is through advertising.
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Aspiring entrepreneurs should consider buying a business or franchise as an alternative to starting a new venture.
true
Before finding mentors, advisors, and team members you need to assess the skill sets needed most in your business.
true
Bootstrapping involves bringing together all the resources you can find, yours and other peoples, to start and grow your business.
true
Building your business on a strong motivating purpose gives you the staying power to get through the hard times you will face.
true
Businesses that have a strong engaging purpose generally do better than those that don't.
true
Companies that sell franchises have already developed a proven business system with products, training, marketing, and ongoing support.
true
Decent people with limited experience can still make great team members if the job skills required can easily be learned in a brief period of time.
true
Equity financing could end up being far more expensive to you than debt financing if your business is wildly successful because your investors may own a large percentage of your company.
true
Even if you haven't worked in an industry, you can still succeed if you are a serious and frequent user of the products and services.
true
Having a strong motivating purpose for building your business will not be as helpful if you can't communicate it clearly to your mentors, team members, and customers.
true
After you launch your business, you will not need to make many changes if you have developed a sound business model.
false
An advantage of buying a franchise is you get a company that is already up and running with employees, customers, and sales.
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Angel investors are loan officers at banks who specialize in small business lending.
false
Businesses for sale will typically sell for 8 to 10 times the net income they are producing.
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Efficiency is achieving all of your important goals, and effectiveness is doing it with as few resources as possible.
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The major goal of acquiring resources is to build out your full product line before you start selling anything to customers.
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The solution of "opening doors" is usually used by governments and large corporations.
false
With debt financing you offer individuals or organizations ownership in your company in lieu of required payments.
false
With equity financing you borrow money from an individual, bank, or credit union and pay the loan back with interest.
false
Your gross margin is your sales price, minus the cost of your goods, minus all other business expenses, divided by your sales price.
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Your profit margin is your sales price minus the cost of the goods you are selling, divided by your sales price.
false
A business model primarily explains how a new venture will make money and sustain itself over time.
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A critical requirement for staying in business in the long run is to make sure that your pricing, cost of goods, and expenses allow you to make money.
true
A good way to generate business ideas is to think of the problems or pain points you experience while looking for products and patronizing other businesses.
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A good way to keep your passion and drive for your business alive is to regularly set and achieve important goals.
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A very important part of a business model is how you will generate revenue streams for your new venture.
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If you have no knowledge of an industry in which you want to start a business, you can always bring in partners who know that industry well.
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It is OK to sell a product that isn't quite perfect or isn't exactly what you might end up selling later.
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It is best to think about a plan for contingencies and pivots before you need to implement them.
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One important advantage of starting off very lean is that it forces you to focus on key customers, early sales, and cash flow.
true
One of the benefits of buying a franchise is that the franchising company will generally have agreements in place with vendors and suppliers that give you better prices.
true
One of the best ways to determine if a franchise is a good opportunity is to call existing franchisees of the business.
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One of the first things a business model addresses is the customer group for whom you will be creating value and the need, problem, or pain point you will be solving for them.
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One of the most common ways to evaluate a business that is for sale is to evaluate the income it is producing as a return on your investment.
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One of the reasons having a strong purpose is important is because it leads to passion and perseverance.
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Resources for bootstrapping a business may include mentors, free consulting, bartering, outsourcing, and borrowing rather than buying.
true
The best businesses have a 50 percent gross margin or better and a 10 to 20 percent profit margin.
true