CHAPTER 6

Entrepreneurs who aspire to start online businesses implement all the following steps except: a.choose a domain name. b.identify a profitable market niche. c.determine physical location. d.build online relationships e.create a professional Web site.

c

What are the two principal advantages of forming a corporation? a.Unlimited liability and continuity b.Continuity and non-tax structure c.Continuity and limits on owner's liability d.Freedom from debt and relatively simple structure e.Unlimited liability and potential conflicts with partners

c

Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. These examples most closely relate to which personality trait of entrepreneurs? a.High energy level b.Tolerance for ambiguity c.Need to achieve d.Self-confidence e.Patience

a

Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur? a.Sustainer b.Idealist c.Optimizer d.Juggler e.Hard worker

a

The drawback(s) of proprietorship include: a.difficulty in obtaining financing. b.the unlimited liability of the partners. c.complexity and cost. d.conflicts with partners. e.existence regardless of whether the owners live or dies.

a

Which of these means that people are motivated to excel and pick situations in which success is likely? a.Need to achieve b.Tolerance for Ambiguity c.Awareness of passing time d.Internal locus of control e.External locus of control

a

_____ combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for better. a.Social entrepreneurship b.Traditional entrepreneurship c.Conventional entrepreneurship d.Modern-day entrepreneurship e.Contemporary entrepreneurship

a

_____ was one of the top 10 fastest-growing franchises in 2011. a.Subway b.Dairy Queen c.Arby's d.Wendy's e.Krispy Kreme

a

Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which personality trait of entrepreneurs? a.Tolerance for ambiguity b.Self-confidence c.Need to achieve d.High energy level e.Impatience

b

Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as: a.a proprietorship. b.a partnership. c.a trade alliance. d.a corporation. e.none of these.

b

Jamila is a successful artist and entrepreneur who makes all of her work out of recycled goods because she believes in sustainability. She can be described as a social entrepreneur that is committed to: a.consumerism. b.environmental protection. c.children's rights. d.industrial protectionism. e.international human rights.

b

Small businesses represent _____ percent of all firms and employ about half of all private sector employees. a.87 b.98 c.72 d.22 e.54

b

Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business owner did Wendy use? a.Buying an existing business b.New business start-up c.Merger and acquisition d.Buying a franchise e.Equity financing

b

What percentage of women entrepreneurs have employees? a.Eighty b.Twenty c.Fifty d.Ten e.Five

b

Which of the following are high-energy people who enjoy handling every detail of their own businesses? a.Hard workers b.Jugglers c.Optimizers d.Idealists e.Sustainers

b

Which of the following is the most cited source of new business ideas? a.Brainstorming b.In-depth understanding of industry/profession c.A hobby d.Copying someone else e.None of these

b

Which of these is true about the business incubator? a.It gives up control since every business is run the same way. b.It provides shared office space, management support services, and management advice. c.It develops an international business. d.It provides an established name and advertising. e.All of these.

b

Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the entrepreneur's own way? a.Participate in a business incubator b.Start a new business c.Buy a franchise d.Buy an existing business e.All of these

b

Which of these refers to an unincorporated business owned by an individual for profit? a.Trade alliance b.Sole proprietorship c.Association d.Corporation e.Partnership

b

Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the company? a.Franchising b.Equity financing c.Licensing d.Debt financing e.Venture-debt

b

_____ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner. a.Spinning-off b.Franchising c.Business incubation d.Globalization e.Right offerings

b

A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as: a.an equity financing firm. b.a corporation. c.a venture capital firm. d.franchising. e.a trade alliance.

c

All of these are entrepreneurial characteristics except: a.awareness of passing time. b.high energy level. c.external locus of control. d.self-confidence. e.tolerance for ambiguity.

c

An artificial entity created by the state and existing apart from its owners is known as: a.a partnership. b.a trade alliance. c.a corporation. d.a proprietorship. e.an association.

c

Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as a(n) _____. a.intrapreneurship b.useless idea c.entrepreneurship d.partnership e.large business

c

In 2012, which country had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business? a.Peru b.Columbia c.China d.Angola e.Dominican Republic

c

In the United States, minorities own _____ firms. a.8.9 million b.872,000 c.5.8 million d.2.9 million e.1.3 billion

c

Max is the Web site manager for a local florist. The company's owner would like Max to redesign the Web site so that customers can connect directly with florist employees on a daily basis about products and specials. This relates to which step in establishing an online business? a.Creating a professional Web site b.Choosing a target market c.Building online relationships d.Choosing a domain name e.Finding a niche market

c

The majority of the incubators are operated by: a.small businesses. b.international businesses. c.non-profit organizations. d.large corporations. e.college drop-outs.

c

What is the most common way that entrepreneurs finance the start-up of a new business? a.Venture capital b.Lines of credit c.Self-financing from savings or credit cards d.Bank loans e.Loans from friends, family, or business associates

c

Which of the following is the process of starting a business venture, organizing the resources, and taking the risks? a.Venture capital b.Intrapreneurship c.Entrepreneurship d.Equity financing e.Small business administration

c

A venture capital firm wants to invest in businesses with a high rate of return. In return, they will: a.invest large amounts of money. b.provide necessary assistance and advice. c.provide information to help the entrepreneur prosper. d.all of these. e.provide necessary assistance and advice and provide information to help the entrepreneur prosper only.

d

A(n) _____ has a legal life of its own. a.proprietorship b.association c.trade alliance d.corporation e.partnership

d

A(n) _____ is someone who recognizes a viable idea for a business product or service and carries it out. a.leader b.introvert c.manager d.entrepreneur e.intrapreneur

d

An advantage of which of these tactics is that there is a shorter start-up time and an existing track record? a.Buy a franchise b.Debt financing c.Start a new business d.Buy an existing business e.Participate in a business incubator

d

Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as a: a.business portfolio. b.SWOT analysis. c.mission statement. d.business plan. e.competitive analysis.

d

Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess? a.Intolerance for ambiguity b.An external locus of control c.An inability to deal with uncertainty d.A high need for achievement e.A high need for power

d

If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n) _____. a.optimizer b.juggler c.idealist d.sustainer e.hard worker

d

Small firms that file for patents typically produce _____ more patents per employee than large patenting firms. a.3 to 4 times b.6 to 7 times c.twice d.13 to 14 times e.9 to 10 times

d

Social entrepreneurs are committed to both good business and: a.improving the natural environment. b.swaying political opinion of consumers. c.non-profit goals. d.positive social change. e.big profits.

d

The Small Business Association (SBA) reports that small businesses create at least _____ percent of America's new jobs. a.30 b.82 c.32 d.64 e.46

d

The most common reason for becoming an entrepreneur is: a.to be one's own boss. b.to fulfill a dream. c.to control one's future. d.joining the family business. e.the result of being laid off.

d

Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the _____ to start new businesses. a.mall b.Internal Revenue Service c.Small Business Administration d.Internet e.bookstore

d

Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for the company can best be described as a(n): a.one man operation. b.trade alliance. c.corporation. d.proprietorship. e.partnership.

d

Which of the following demographic factors distinguish entrepreneurs from others? a.They are likely the youngest child in their family. b.Most entrepreneurs launch their businesses between the ages of 35 and 55. c.Their parents likely worked for large companies. d.They are likely the children of immigrants. e.All of these.

d

Which of the following is NOT an appropriate legal structure for an entrepreneurial company? a.Proprietorship b.Corporation c.Partnership d.Trade alliance e.All of these are appropriate legal structures for an entrepreneurial company.

d

Which of the following is a popular small business form because it is easy to start and has few legal requirements? a.An association b.A trade alliance c.A partnership d.A proprietorship e.A corporation

d

Which of the following is the type of business that most entrepreneurs start? a.Retail b.Manufacturing c.Service d.All of these e.Retail and manufacturing only

d

_____ refers to borrowing money that has to be repaid in order to start a business. a.Franchising b.Licensing c.Equity financing d.Debt financing e.Venture capital

d

All of the following are common reasons why small business ventures fail except: a.sloppy accounting. b.lack of controls. c.unrealistic focus. d.naive hiring. e.long-term focus.

e

An entrepreneur: a.assumes the risks of the business. b.reaps the rewards of the business. c.assumes the financial and legal risks of ownership. d.recognizes a viable idea for a business product or service and carries it out. e.all of these.

e

One of the first characteristics or points of a successful business plan is: a.the key ingredient of the business that will attract million of customers. b.a profile of potential customers and market needs. c.the entrepreneur's background and role in the company. d.essential information about funding received so far. e.demonstrate a clear, compelling vision that creates an air of excitement.

e

Tracy's Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes exemplifies which of the categories of small business owners? a.Optimizers b.Sustainers c.Jugglers d.Hard workers e.Idealists

e