chapter 7 quiz busn 1300

_____ are people willing to take the risk of starting, owning, and operating a business. Question options: a) Stockholders b) Entrepreneurs c) Stakeholders d) Intrapreneurs

Entrepreneurs

Which of the following places small businesses at a disadvantage compared to larger competitors? Question options: a) Business location b) Insurance costs c) Lower regulatory expectations d) Finding market niches

Insurance costs

_____ are companies that invest in start-up businesses with high growth potential in exchange for an ownership stake. Question options: a) SBDCs b) Angel investment firms c) Venture capital firms d) Market niches

Venture capital firms

Cynthia is a successful business woman who has amassed a large amount of money by investing in companies with the potential for rapid growth. Later, these companies are either bought by other investors or they go public and offer stock to the public. While she is excited about the possibility of helping these businesses grow, her primary motivation is to make money for herself. Cynthia matches the profile of a(n): Question options: a) institutional investor. b) limited partner. c) angel investor.

angel investor

Overhead costs for small businesses: Question options: a) are often lower than they are for big companies, giving small businesses a competitive opportunity. b) primarily arise because small businesses must hire so many outside consultants. c) are about the same as they are for big companies when measured as a percentage of total expenses. d) tend to be much higher than they are for large businesses when expressed as a percentage of total expenses.

are often lower than they are for big companies, giving small businesses a competitive opportunity.

Senator Smith wants to help revitalize inner cities and stimulate more innovation. She could achieve both of these goals by supporting legislation that would: Question options: a) increase government benefits for those that are unemployed. b) make it illegal for firms to outsource jobs. c) call for greater government ownership of factories located in inner cities. d) encourage the formation of small businesses.

encourage the formation of small businesses.

David McRemitz developed three unique programs while working for his software firm. This makes him an entrepreneur.true.false

false

David is a high school senior interested in starting his own computer repair business. David's interest in starting his own business will have no effect on the long-term recovery of the economy.true/false

false

Greg is looking forward to trying his hand at entrepreneurship as he lives in a highly-regulated nation that makes it easier to start a business.true/false

false

One of the biggest problems facing people who want to start a small business is the lack of educational resources available to help them learn the ins and outs of starting and managing their new company. truefalse

false

People who face discrimination that limits their economic opportunities in corporate America are likely to find that entrepreneurship offers even less attractive opportunities. true/false

false

Rob Baron owns a small sheet metal fabrication business that employs 23 workers. As a small business owner, one of the major advantages Rob will enjoy when competing against larger firms is a lesser burden of government regulations.true/false

false

Small businesses rarely have the creative means to develop new and innovative products. They often wait for larger organizations to develop the product and then simply copy the larger organization's idea.true/false

false

To increase rates of entrepreneurship, the Small Business Administration (SBA) has created its own bank to provide interest-free loans directly to entrepreneurs.true/false

false

Which of the following is the best description of a typical business plan for a small business? A business plan is a(n): Question options: a) formal document, often 25-50 pages in length, that describes the company, sets forth its key objectives, and provides details as to how and when the organization plans to achieve these objectives. b) annual report that the company provides to partners or stockholders, discussing the company's objectives and assessing its challenges for the coming year. c) short document, usually no more than 10-15 pages in length, that provides a basic overview of the company's mission and products. d) legally-required document that the company must file with the Small Business Administration on an annual basis and that documents the funding the company needs for the next fiscal year.

formal document, often 25-50 pages in length, that describes the company, sets forth its key objectives, and provides details as to how and when the organization plans to achieve these objectives.

Barry and Ivan recently founded a new company that is growing rapidly. In need of a large amount of capital to finance their company's growth, they are in talks with a venture capital firm. Barry and Ivan should realize that the venture capital firm will only provide financing: Question options: a) if they agree to avoid any risky investments. b) after they have paid off all of the personal debt they incurred to start their company. c) if they agree to pledge specific company assets as collateral to back the loan. d) in exchange for a significant stake in their firm's ownership.

in exchange for a significant stake in their firm's ownership.

Which of the following is an actual competitive disadvantage for many small businesses? Question options: a) Lack of business knowledge and expertise by the owners b) High overhead costs c) Inability to compete effectively in global markets d) Inability to take advantage of advances in technology

lack of business knowledge and expertise by the owners

Small businesses are much more likely to generate revolutionary new ideas. These small firms produce 13 percent more patents per employee than their large counterparts. One reason for this difference in the rate for patents per employee is that: Question options: a) large businesses focus on existing products, viewing innovative new products as too expensive to bring to market. b) small businesses have more capital and people, allowing them to focus on new patents due to their size. c) small businesses maintain a lack of bureaucracy, allowing new ideas to flourish. d) large businesses are not concerned with new patents.

small businesses maintain a lack of bureaucracy, allowing new ideas to flourish.

All of the following statements about the impact of small businesses in the U.S. economy are true EXCEPT: Question options: a) small businesses tend to introduce new innovations at a much higher rate than large businesses. b) small businesses have created 65 percent of the net new jobs in the United States over the past 17 years. c) small businesses account for half of the U.S. gross domestic product. d) small businesses provide greater employment stability than large firms in times of economic hardship.

small businesses provide greater employment stability than large firms in times of economic hardship.

Resources offered by the _____ would most likely help you develop a business plan. Question options: a) venture capitalists in your area b) the Small Business Administration c) your local small business banker

the Small Business Administration

Even five years after their launch, half of all established small businesses remain viable. true/false

true

Rates of entrepreneurship in countries like Uganda and Ecuador are high, because many of the citizens in those nations become entrepreneurs out of economic necessity.true/false

true

Robin is an entrepreneur. As such, she is likely to: Question options: a) be over-reliant on other employees to get the work done. b) look objectively at her own abilities and shortcomings. c) view uncertainty as something that can be turned to her advantage. d) have a hard time coping with failure and place the blame on others.

view uncertainty as something that can be turned to her advantage.

Carl is thinking about starting a small business and is trying to assess the potential opportunities and threats associated with a new start-up. He's talked with friends and associates about his plans, and several have offered him opinions and advice. The comments of four friends are summarized below. Which of these statements would be the most helpful to Carl? Question options: a) Aim your efforts at the broadest possible market segments. Those are the ones that offer you the greatest potential to make profits quickly. b) You are likely to face some lean months at first, so manage your money carefully. Avoid the temptation to make extensive purchases. c) One advantage of operating a small business is the fact that you don't have to worry very much about government regulation. d) Focus on the domestic market. There is no practical way for you to compete effectively against big businesses in foreign markets.

you are likely to face some lean months at first, so manage your money carefully. Avoid the temptation to make extensive purchases.

An advantage of starting your business from scratch is that: Question options: a) you don't have to deal with the prior owner's bad decisions. b) relationships with customers, suppliers, and other stakeholders are established. c) getting financing and credit is less challenging. d) the concept, organizational structure, and operating practices are already in place.

you don't have to deal with the prior owner's bad decisions.