Entrepreneurship Test #1 Chapters 1, 2, and 3

Operation Section of Business Plan

you should explain how the business will be managed on a day-to-day basis and discuss hiring and personnel procedures

Which of the following would not be considered a mistake when preparing a business plan

spending time studying the competition

Command Economy

the government determines what how and for whom products and services are produced

When you make an economic choice, the value of the next-best alternative (the one you pass up) is called

the profit motive

The Appendix

to the business plan includes supporting documents that provide additional information and back up statements made in the body of the report

Briefly discuss the economic impact of limited resources

The impact of limited resources is often not good because whenever you running out of something, most of the time it is not good. We used resources for many things, some limited resources are very valuable to us and it would not be good if we ran out of them. We would have to come up with new ways of doing certain things.

Successful entrepreneurs tend to have all of the following characteristics except

They prefer to have someone else do the work

Entrepreneurship

an act of someone who is taking a risk to run and start their own business

The part of a business plan comes after the main body

appendix

Economic wants

are the basis of the economy

Economic Resources

are the means through which goods and services are produced

Your needs

are things that you must have in order to survive

American Entrepreneurs

create products that change the way people live and conduct business

Products you can see and touch are called

goods

A Business Plan

is a written document that describes all the steps necessary for operating a successful business

A self-assessment

is an evaluation of your strengths and weaknesses

Identification of Risks

is not an element of the financial section of a business plan

Scarcity

occurs when people's needs and wants are unlimited and the resources to produce the goods and services to meet those needs and wants are limited

Why are good communication skills are important in the problem-solving process

Good communication skills help you communicate the problem to the problem maker and other people

Banks and investors make financing decisions about new businesses based on

How well they think the business can meet its objectives

What are the three basic components of a business plan

Introduction Main body Conclusion

What are factors of production?

Land Labor Capital

Name the four functions of business

Marketing Operations Human Resources Finance

Name two major factors that can help a business succeed

Operation skills if you are disorganized and if you have bad employees the customer won't want to come to your business. Advertisement skills you have to get your name out there

What is the first of Maslow's needs must be satisfied?

Physiological

Samantha needs $160,000 to start her new business. Her parents have agreed to invest 10 percent of the amount in Samantha's business. She intends to invest $90,000 of her own funds. How much more does she need to borrow?

$54,000

If you intend to borrow 25 percent of the $75,500 you need to start a business, how much of your own funds are you investing

$56,625

Using the six steps of the formal problem-solving model develop a solution to this situation: Scenario: You are just starting your business and very few people know about it. You have very little money and time to get the word out since you are putting all your time and money into the business to get it going. You know that the more people who know about your business the more successful it will get. What are you going to do?

1.Need to get my name out there 2. Need customers 3. Newspaper. Flyers, Facebook and other social media pages. 4. Flyers and Social Media Pages 5. Make and print out flyers and put them everywhere around town inviting people to come see what your store has.Make social media pages and invite people to like or follow them, update frequently. 6. Evaluate and see if that helps you get customers and if that doesn't help try something else.

The rivalry among businesses to sell their goods and services is called

Competition

The appendix to a business plan would likely include

A copy of the owner's resume

Why should your business plan include information and data from objective sources

Because they will not be bias and will tell you what they really think without worrying to much about your feelings because they don't know you on a personal level

Briefly identify four ways a business plan is important to an entrepreneur

Can help be a guide Help get investors Helps you set goals for the near and long future Helps create a picture of what you want for your business

Name the four principles on which the U.S. economic system is based

Choice Market/Free Market Private Property Freedom of Choice Profit Competition

An individual's need or desire for a product or service at a given price is called

Demand

Under which economic system does entrepreneurship function the best? Why?

Free Choice/Free Market because you for the most part get to make all of your decisions as long as they are legal

People who work for someone else are called

Employees

Generally considered a disadvantage of entrepreneurship

Entrepreneurs must make all decisions by themselves

The Small Administration is made up of what

Executives who volunteer their time to provide entrepreneurs with real-world advice and know-how

A business with many variable costs is a higher risk than a business with mostly fixed costs, because fixed costs will be incurred regardless of the level of sales

False

An entrepreneurs create more goods and services, consumers have fewer wants and needs

False

Both employees and entrepreneurs are equally affected by the consequences of the decisions made on the job

False

Entrepreneurs do not need good teamwork skills, because they are the ones calling the shots

False

Experienced entrepreneurs do not need business plans. Only those who are starting their very first business need them

False

I will learn more about starting a dog-walking business, is a good example of a SMART Goal

False

Only advanced economies have the resources necessary to satisfy everybody's unlimited needs and wants

False

The executive summary should be written before the main body of the business plan has been completed

False

The most successful entrepreneurs make decisions based on their intuition or "gut feeling" about a situation

False

Explain what should be included in the marketing section of a business plan

Pricing to be in line with the market you are selling to. Sales all the ways of reaching your target audiences. Advertising and Promotion how are you going to get to reach your audience

Which function of business creates or obtains products or services for a business to sell

Production

An organization that exists to help small businesses and their owners is the

Small Business Adminstration

SMART Goal

Specific Measurable Attainable Realistic TImely

Do not be afraid to identify potential problems and risks in a business plan

True

Handwritten business plan are not acceptable, all business plans, must be word processed and printed on standard-sized white paper

True

Many businesses fail because the owner lacks business knowledge

True

Monopolies usually exist because of barriers that make it difficult for new businesses to enter the market

True

Sometimes a business opportunity arises from a discovery or invention

True

The problem-solving process is not complete until you evaluate your action, since even a well-thought-out solution may not work

True

To avoid inconsisten cies, it is a good idea to have an objective person review your final business plan before you show to investors

True

Your business plan is your best opportunity to let other people know what you want to do with your company

True