Small Business MGMT Midterm
Which of the following statements is true of a franchise?
A franchise is a prepackaged business bought, rented, or leased from a company
Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. In Connie's business plan, which of the following statements is true of a vision statement?
A tagline or a slogan is a good way to present vision statements
Which of the following is try about business to business transactions?
B2B e commerce is larger than B2C e commerce
________ means taking business away from ones employer
Cannibalizing
Crowdsourcing is funding a business online through the collective involvement of others who provide donations, loans, or investments. T/F
False
Differentiation strategies target a niche segment of the market. T/F
False
For the successor of a family business, ownership transfer is best accomplished after the death of the founder. T/F
False
In deciding whether to make the move from part time to full time entrepreneurship, the key questions is usually government regulations. T/F
False
In entrepreneurship, every good idea is a viable business opportunity. T/F
False
In order to make profits from a small business, the company needs to make an actual product. T/F
False
In the context of a business plan, a firm's responsiveness to customers is a key concern of bankers. T/F
False
Incremental innovation is also called a blue ocean strategy. T/F
False
Key business functions are the abilities or skills of the entrepreneur at finding expendable components necessary to the operation of the business cut as time, information, location, financing, raw materials, and expertise. T/F
False
Selling your product or service in a limited area, for a limited time is known as parallel marketing. T/F
False
Taking products and services made in your home country and selling them in other countries is called importing. T/F
False
The absolute lowest price that a buyer would be willing to pay is called the "point of indifference" in the negotiation process. T/F
False
The elevator pitch is much shorter than a vision statement or tagline. T/F
False
The general environment is part of the internal environment. T/F
False
The three principles that are absolutely critical in the process of effectual reasoning are affordable loss, strategic partnerships, and contingencies. T/F
False
There are two ways to think about opportunities and business creation-one way is the effectuation model of entrepreneurship where you think about what you need to do to cause your new product or service to come into existence. T/F
False
When studying the business costs of ethical failures in large businesses, the more damaging costs received more executive attention. T/F
False
_______ is the general name for the ling of product or service being sold, or the firms in that line of business.
Industry
Which of the following is true of entrepreneurial alertness?
It allows entrepreneurs to notice things that have been overlooked
A _______ is a narrowly defined segment of the population that is likely to share interests or concerns.
Niche market
_______ is the idea and actions that explain how a firm will make its profits
Strategy
Which of the following statements is true of a high growth venture?
The meta strategy for a high growth venture is novelty
A license is a legal agreement that grants rights to use a particular piece of intellectual property. In return, you are required to pay the owner of the license. T/F
True
A situation that occurs when a person's values are in conflict, making it unclear whether a particular decision is the right thing to do is considered an ethical dilemma. T/F
True
All entrepreneurs have at least four sets of resources: access to capital; their own skills and abilities, their own knowledge, and the of friends and business associates. T/F
True
An opportunity that makes it possible for a new business to gain a foothold in a market is called an entry wedge. T/F
True
Big business often has trouble with innovations, but, small, new, businesses are more likely to see new revenues in innovations. T/F
True
Business plans are essential for external legitimacy and internal understanding. T/F
True
Delegation is not for everyone and every situation. T/F
True
Every business faces risks in the real world, so every business plan needs to spend some time addressing them. T/F
True
For corporations, certification for businesses owned by women or minority is handled by organizations that are not affiliated with the government or big business. T/F
True
Founders of small businesses often find it very difficult to give up decision making authority to family members. T/F
True
Gaining legitimacy in small businesses is especially difficult for entrepreneurs seen as "different" women, minorities, home based businesses, or businesses started by young people. T/F
True
Intellectual property refers to original works like inventions, visual and performing art works, books, and computer programs. T/F
True
Most entrepreneurs start out working part time on their new business. T/F
True
One of the seven key strategies of the entrepreneurial way involves effectuation or an approach used to create alternatives in uncertain environments. T/F
True
One of the ways to practice the business of innovation is to invite someone who was never included before in a meeting for solving a problem. T/F
True
One way entrepreneurs display passion is by being persistently focused on the business. T/F
True
Several models exist for the life cycle of the small business firm. Each divides the stages a bit differently. T/F
True
Strategy is the idea and actions that explain how a firm will make its profits. T/F
True
Succession plans deal with he people who will take over what roles they will fill and what supports they will receive. T/F
True
The feasibility of an idea is the extent to which it is viable and realistic. T/F
True
The major ways you cope with competitive pressures is by undertaking some combination of strategic actions and tactical actions. T/F
True
Universalism is an ethical model that suggests people get their ideas of right and wrong from their family, religion, education, and community. T/F
True
When considering how to organize the business you are creating, one consideration is permanence, which is related to legitimacy. T/F
True
The CEO at River Castle Inc. asked the employees to prepare a report on ways in which the company could become more environmental friendly. The reports revealed areas in which the company had been unnecessarily adding to its carbon footprint and consuming excessive energy due to faulty machines. As a corrective action, all the faulty and outdated equipment were replaced with efficient equipment. This is an example of ______
a green audit
Which of the following is a way to start business with established customers?
a spin off
Innovation driven economies ________
are focused on high value added manufacturing but are marked by a very large service sector
Getting the business organized and registered is an example of _______ competency.
boundary
A _______ plan is a document designed to detail the major characteristics of a firm-its product or service, its industry, its market, its manner of operating and its financial outcomes with an emphasis on the firms present and future.
business
The _______ of an organization will be a part of its task environment
competitors
In an imitative strategy, an entrepreneur ______
does more or less what others are already doing
The motivations, cognitions, attitudes, aptitudes, and behaviors that lead to a propensity to create solutions to problems or seeking opportunities to do something new or better is called
entrepreneurial mindset
The sum total of forces outside of an entrepreneur and a firm is called the ______
environment
One of the quickest and simplest ways to screen an idea for business potential is through the
feasibility study
Which of the following is the primary goal for performing due diligence?
finding any inefficiencies, unnoticed opportunities, waste, and mismanagement
Which of the following is one of the ways to get into small business ownership?
franchising
Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. The ______ rate is the percentage of people who buy out of the total population of people approached.
hit
Access problems for women and minority owned small businesses crop up most often as discrimination.
in financing
Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. One variant of the traditional business plan is the _____ plan consisting of company and organization sections, with revised cover letter, title page, executive summary, and table of contents to reflect the differences.
informational
Patents and trademarks are examples of
intangibles
The life cycle stage in which a product or service is being invented is known as the ______
introduction stage
A _______ is a legal agreement that grants the rights to use a particular piece of intellectual property
license
For part time businesses, _______ refers to the documented permission from the government to run a business and may be required for certain professions such as beauticians or home based day care providers.
licensing
Which of the following categories does the majority of small businesses fall under?
lifetime/part-time firms
In the SCAMPER tool, "M" stands for
modify
Which of the following is a disadvantage of a start up?
no revolving credit from suppliers or banks
The _______ is the most important element of social capital to customers and supporters of a business, such as bankers, lawyers, and suppliers.
owner
_______ refers to working for 35 or fewer hours a week.
part time employment
An entrepreneur's ______ is most likely to inspire key stakeholders like potential investors, employees, or subcontractors.
passion
_______ refers to the impression of a long term continuity a business gives others
permanence
Connie decides to open "Connie's Corner Café" and finds the ideal location for her venture. However, it appears that Connie will have to approach investors or bankers for financial backing. When she talks to her local bank manager, Mr. Johnson, he immediately asks for Connie's business plan. Connie is in trouble because she does not know what a business plan looks like. In Connie's business plan, which of the following pitch desk categories is sometimes given in the form of a user's experience?
problem slide
This stage of the business life cycle occurs once the firm is established in its market.
success stage
Which of the following answer options is not a product based legitimacy indicator?
testimonials
At the tip of the high growth ventures are firms called ________, like Uber and AirBnB with valuations of $1 billion or more.
unicorns
In an attempt to become more innovative, a major pitfall that business owners are most likely to become victim to is
using the first good idea as a business opportunity