EEE370 Midterm Review
Pure Fix Cycles, the company profiled in the opening feature of chapter1, was launched by four co-founders and sells
Fixed gear single speed bikes
Small companies that have expanded successfully into foreign markets tend to rely on all but which of the following strategies? a. Utilize government resources designed to help small companies establish an international presence. b. Research foreign markets thoroughly. c. Focus on many countries initially. d. Forge alliances with local partners.
Focus on many countries initially.
Which of the following is a disadvantage of a C Corporation?
Income is subject to double taxation
Which of the following selections correctly matches the financial statement with its description?
Income statement/tells how much a firm is making or losing.
Which of the following statements is incorrect regarding the industry analysis portion of a firm's business plan?
It is important to focus simultaneously on a business's industry and its target market.
Which of the following is incorrect regarding the "total startup cash needed" component of financial feasibility analysis?
It's not necessary to complete an actual budget of startup expenses.
In the book The Theory of Economic Development, ________ argued that entrepreneurs develop new products and technologies that, over time, make current products and technologies obsolete. This process is called creative destruction.
Joseph Schumpeter
three ways to identify opportunities
Observing Trends, Solving a Problem, Finding Gaps in the Marketplace.
Easy stevenson is starting a firm in the women's clothing industry primarily to pursue financial rewards. According to the textbook, starting a business to make a lot of money
Often fails to live up to its hype
The process of generating a useful idea
Preparation -> Incubation -> Insight -> Evaluation -> Elaboration
Which of the following statements about pro forma financial statements is incorrect?
Pro forma financial statements are required by the SEC.
Four P's:
Product, Price, Promotion, Place
internally stimulated
Recognizes a problem and fixes it.
Which of the following statements about business consultants is untrue?
SCORE is a for-profit consulting agency that has over 10,500 employees
Which of the following is NOT one of the forces driving the entrepreneurial trend in our country? a. International opportunities. b. E-commerce and the World Wide Web. c. Shift away from a service economy. d. Independent lifestyle.
Shift away from a service economy.
Which of the following business plans matches with its appropriate emphasis?
Summary business plan works best for companies in the early stages of development that want to "test the waters" to see if investors are interested in their idea.
Which of the following statements is INCORRECT regarding founding teams?
Teams that are working together for the first time have an advantage over teams that have worked together before OR It is generally believed that new venture teams started by an individual have an advantage over new ventures started by a team
Which of the following was not identified in the textbook as one of the five primary reasons passion is important for the launch of a successful entrepreneurial organization?
The ability to stick to a plan even when faced with evidence that changes are needed
Which of the following statements is correct regarding entrepreneurial activity and age ranges?
The highest percentage of entrepreneurs falls in the 30 to 39 age range.
Which of the following statements is incorrect regarding entrepreneurial activity and age range?
The majority of business founders have no prior work experience.
Which of the following is an accurate characterization of interest in entrepreneurship?
There is tremendous interest in entrepreneurship across the world
According to the textbook, how do well-managed firms respond to the five forces that determine industry profitability?
They try to position their firms in a way that avoids or diminishes the forces.
5 Common Myths about entrepreneurs:
1. Entrepreneurs are born, not made 2. Entrepreneurs are gamblers 3. Entrepreneurs are motivated primarily by money 4. Entrepreneurs should be young and energetic 5. Entrepreneurs love the spotlight.
According to the U.S. Small Business Administration, a common delineation of a small business is one that employs fewer than ________ people. a. 100 b. 500 c. 50 d. 250
100
Small companies are incubators of new sales ideas, products and services and create ________ times more patents per employee than large companies. a. 5 b. 10 c. 16 d. 3
16
Approximately ________ percent of corporate managers who are "cast off" as companies downsize become entrepreneurs. a. 20 b. 45 c. 15 d. 5
20
It is estimated that ________ percent of new businesses fail within two years, while ________ percent fail within five years. a. 21; 51 b. 35; 41 c. 51; 31 d. 51; 64
21;51
According to a recent Gallop survey, about ________ percent of kids in grades 5-12 say they plan to start their own business.
40
According to the text, experts suggest that the mobile phone industry took over 20 years to connect the first billion subscribers and _________ to connect the second billion.
40 months
The average age of the first-time entrepreneurs in the United States is nearly ________. a. 44 b. 25 c. 19 d. 31
44
Research shows that the top-performing ________ percent of small companies create 67 percent of the net new jobs in the economy. a. 80 b. 5 c. 90 d. 10
5
According to the textbook, most boards of advisers have between:
5 and 15 members
According to the textbook, studies show that more than one individual starts __________ of all new firms
50 to 70 percent
Within five years, ________ percent of new businesses will fail. Select one: a. 45 b. 21 c. 51 d. 65
51
According to the Global ___ survey, about ___ percent of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years.
7.6%
In various studies, researchers have found that from ________ percent of the variation in firm profitability is directly attributable to the industry in which a firm competes.
8 to 30
Which of the following is not a characteristic of a successful working relationship between copreneurs? Select one: a. Complementary business skills. b. Compatible business and life goals. c. A clear definition of one partner as "boss" and the other as "subordinate". d. A clear division of roles and authority based on each partner's skills and abilities.
A clear definition of one partner as "boss" and the other as "subordinate".
Which of the following items is typically NOT included in a concept statement?
A description of how much money the new venture needs
According to the textbook, entrepreneurship has historically had _____.
A major impact on both the economy and society.
The Partnering for Success feature in Chapter 8 focuses on buying groups, and recommends that small businesses seek out buying groups to participate in. What is a "buying group" in the context of the feature?
A partnership that bands small businesses together to attain volume discounts on common products and services that they buy.
What is entrepreneurship? What does it require?
A person/persons who starts their own business; Creativity, Drive, and a Willingness to Take Risks
Which of the following firms has a peer-to-peer business model?
Airbnb
externally stimulated
An entrepreneur decides to laugh a firm, searches for and recognizes an opportunity and then starts a business.
Which of the following statements regarding survival rates of entrepreneurial firms in the United States is correct? As high as 50% after four years As high as 60 percent after four years As high as 70 percent after four years As high as 80 percent after four years As high as 90 percent after four years
As high as 50% after four years
Which of the following statement is incorrect regarding how balance sheets are prepared?
Assets are recorded at fair market value rather than cost.
Which of the following statements concerning small businesses and international markets is false? Select one: a. Because exporting is so complex and requires a company to have so many international experts on staff, exporting is not feasible for small businesses. b. Although terrorism and global recession have slowed the growth of international trade somewhat, global opportunities for small businesses have a long-term positive outlook. c. Small companies comprise 97 percent of all businesses engaged in exporting, yet they account for only 30 percent of the nation's export sales. d. Although the U.S. is an attractive market, approximately 95 percent of the world's population lives outside its borders.
Because exporting is so complex and requires a company to have so many international experts on staff, exporting is not feasible for small businesses.
disruptive business model
Business models, which are rare, that do not fit the profile of a standard business model, and are impactful enough that they disrupt or change the way business is conducted in an industry or an important niche within an industry.
Which of the following is not one of the major sources of barriers to entry?
Buyer group concentration
Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur? Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by money Candidate D: high-risk taker, achievement-motivated, networker Candidate C: visionary, high-risk taker, energetic Candidate B: seeks recognition, self-starter, creative Candidate A: visionary, energetic, moderate risk taker
Candidate A: visionary, energetic, moderate risk taker
Shelly Brunner owns a sports-themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years ago when lots in the area were selling for $50,000. Shelly knows that several potential competitors have looked at bare lots near his business but haven't been willing to pay the asking prices, which are as high as $500,000. Which of the six major sources of barriers to entry is causing a disincentive for new firms to enter Shelly's industry?
Cost advantage independent of size
Which of the following is the correct sequence for the four steps in the entrepreneurial process?
Deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm.
standard business model
Depicts existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders.
opportunity
a favorable set of circumstances that creates a need for a new product, service, or business
Entrepreneurs typically possess ________. a. a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious b. specialized technical abilities c. a set of unique skills that is usually accompanied by advanced degrees in several areas d. the ability to easily access capital
a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious
The number one characteristic shared by successful entrepreneurs is ________. a desire to bring a revolutionary new product or service to market a desire to fulfill a lifetime dream a desire to employ other people a passion for the business a desire to achieve financial rewards
a passion for the business
opportunity gap
a problem that is recognized
There has been ________ in the number of minority entrepreneurs in the United States over the past several years.
a substancial increase
Samantha Diaz owns a seafood restaurant in Jacksonville, Florida. She is currently owed $15,000 by a corporation that she catered a meeting for and $2,000 on an overdue account. Samantha has $17,000 in:
account receivable
Money owned to a company by its customers is referred to as:
accounts receivable
A(n) __________ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.
advisory board
Amy Phillips founded a cosmetics firm several years ago. Her firm has grown rapidly and is financially successful. One thing that Amy attributes her success to was that early on, she assembled a panel of experts who provided her ongoing direction and advice about her business. What Amy created is called a(n):
advisory board
Jim Kite recently launched a printing company. One thing Jim is now thinking about creating, is a panel of experts who can provide him with ongoing direction and advice regarding the future of his business. Jim is thinking about creating a(n):
advisory board
The costs associated with the organization's value proposition include, for example, ________.
all of the above
Entrepreneurs are characterized by ________. a. skill at organizing b. desire for immediate feedback c. high energy levels d. All of these
all of these
Entrepreneurs can increase their chances for success if they ________. a. know their business in depth and develop a solid business plan b. manage their financial resources and understand financial statements c. learn to manage people and keep in touch with how they react to stress and balance their health needs with the needs of the business d. All of these
all of these
Factors that feed the economic boom behind entrepreneurship include ________. a. demographic and economic factors b. technology and cloud computing c. the shift to a service-based economy and international opportunities d. All of these
all of these
The nation's small businesses ________. a. employ more than 49 percent of the nation's private sector workforce b. create more jobs than do big businesses c. account for 47 percent of business sales d. All of these
all of these
The profile of an entrepreneur includes ________. a. a desire for responsibility and moderate risk b. confidence in the ability to succeed and determination c. a high level of energy, a desire for immediate feedback and a future orientation d. All of these
all of these
Which of the following is a benefit of entrepreneurship? a. The opportunity to gain control over your own destiny. b. The opportunity to reach your full potential. c. The opportunity to do what you enjoy. d. All of these
all of these
Which of the following is/are true regarding business plans? a. Provide a pathway to success. b. Allow entrepreneurs to replace faulty assumptions with facts before making the decision to go into business. c. Create a benchmark against which entrepreneurs can measure actual company performance. d. All of these
all of these
Which of the following technological forces is driving the entrepreneurial trend in our nation? a. Cloud computing. b. Mobile marketing. c. The Internet. d. All of these
all of these
A board of directors has three formal responsibilities:
appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation
According to the textbook, prior entrepreneurial experiences:
are one of the most consistent predictors of future entrepreneurial performance
Small companies ________.
are the leaders in offering training and advancement opportunities to workers
Entrepreneurs may find benefit from the Internet due to its potential ________. a. to take all pressure off other attributes of the business venture b. if the organization is willing to invest millions of dollars in this effort c. as a relatively low-cost solution to expand its revenue-generating abilities d. only if the entrepreneur has a high level of technical abilities
as a relatively low-cost solution to expand its revenue-generating abilities
Kevin Pierce was reading the business plan of New Venture Fitness Drinks, and noticed that prior to its financial forecasts, New Venture Fitness Drinks placed an explanation of the sources of the numbers for the forecast and the assumptions used to generate them. This explanation is called an
assumption sheet
MacKenzie was reading the business plan of Florida Newco, and noticed that prior to its financial forecasts, Florida Newco placed an explanation of the sources of the numbers for the forecast and the assumptions used to generate them. This explanation is called a(n)
assumption sheet
Within the e-business model, e-mail occurs ________.
at the activity level
An opportunity has the following four essential qualities: ________.
attractive; timely; durable; and anchored in a product, service, or business that creates or adds value for its buyer or end user
Which of the following was not identified in the textbook as one of the guidelines for forming an effective board of directors?
avoid the use of committees OR pick members who are personal friends of the firm's founders
A ________ is a snapshot of a company's assets, liabilities, and owners equity at a specific point in time.
balance sheet
Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on ________.
bargaining power of suppliers
Tim Rutherford is thinking about starting a firm in the medical equipment industry. In the industry analysis Tim has been conducting, one thing he has noticed is that the medical equipment industry is characterized by buyer group concentration. This factor concerns Tim because it tells him that the profitability of the medical equipment industry is potentially suppressed by the ________.
bargaining power of suppliers
The three primary reasons that people become entrepreneurs and start their own firms are to ________. Answers: take big risks, be their own boss, and do what they were "born" to do gain prestige, realize financial rewards, and eliminate risk in their lives take advantage of government subsidies, pursue their own ideas, and realize financial rewards be their own boss, pursue their own ideas, and pursue financial rewards do what they were "born" to do, be their own boss, and gain prestige
be their own boss, pursue their own ideas, and pursue financial rewards
Dave Harrison is in the process of launching a financial services firm. He plans to incorporate the firm. Because the firm will be incorporated, Dave is legally required to have a:
board of directors
Devin is in the process of launching a software company. He plans to incorporate the firm. Because the firm will be a corporation, Devin is legally required to have a _________
board of directors
If a new venture organizes as a corporation, it is legally required to have a(n) __________, which is a panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm.
board of directors
The panel of individuals who are elected by a corporation's shareholders to oversee the management of the firm is called the:
board of directors
A(n) ______ is the set of attributes - positive or negative - that people associate with a company.
brand
________ are itemized forecasts of a company's income, expenses, and capital needs and are also an important tool for financial planning and control.
budgets
In regard to budgets, which of the following statements is not true?
budgets are a poor tool for financial control
Match the financial term with its proper definition. A) forecasts/depict relationships between items on a firm's financial statements B) forecasts/written report that quantitatively describes a firm's financial health C) budgets/itemized forecasts of a company's income, expenses, and capital needs D) financial ratios/written report that quantitatively describes a firm's financial health E) financial statements/an estimate of a firm's future income and expenses
budgets/itemized forecasts of a company's income, expenses, and capital needs
A(n) ________ is a written document that describes all the aspects of a business venture in a concise manner. contingency plan corporate plan operations plan business model business plan
business plan
The various levels of organizational commitment to e-business include all of the following, except ________.
business policy
The three reasons that most entrepreneurial ventures need to raise money during their early life are __
cash flow challenges, lengthy product development cycles, and capital investment.
BLMA Models, the company profiled in the opening feature in Chapter 8, sells model trains and model train accessories. According to the feature, the biggest challenge the company has faced is:
cash flow management
According to the textbook, the most important function of the pro forma statement of cash flows is to project whether the firm will have sufficient:
cash to meet its needs
Amy has just launched a firm in the sports drink industry. She has decided to complete a grid to see how she stacks up against her competitors. Along the horizontal axis of the grid she lists her firm along with her major competitors. Along the vertical axis of the grid she lists the main competitive factors in her industry. Amy is completing a ________.
competitive analysis grid
The information that is gathered by a firm to learn about its competitors is referred to as ________.
competitive intelligence
Each quarter, Craig Anderson, who owns a chain of auto repair shops, does a detailed analysis of his firm's competitors. This analysis is called ________ analysis.
competitor
A(n) _____ analysis is a detailed evaluation of a firm's competitors.
competitor
Tracy Brady is in the process of developing an exciting new product in the smartphone industry. She'd like to show a preliminary description of the product to industry experts and prospective customers to solicit their feedback. Tracy should complete and distribute a(n) ________ statement.
concept
The "Savvy Entrepreneurial Firm" feature in Chapter 6 focuses on the challenge of finding a convenient time and place for a firm's advisory board to meet. A possible solution to this problem mentioned in the feature is to:
conduct meetings online
The primary opportunity existing for startups in fragmented industries is to ________.
consolidate the industry and establish industry leadership as a result of doing so
If a firm determines it can use the percentage-of-sales method and it follows the procedure described in the textbook, then the net result is that each expense item on its income statement (with the exception of those items that can be individually forecast) will grow at the same rate as sales. This approach is called the:
constant ratio method of forecasting
Apple is an established firm that encourages and emphasizes entrepreneurial behavior throughout its various divisions. According to the textbook, Apple practices ______ entrepreneurship.
corporate
Kevin Jackson owns a general contracting company. The way Kevin prices his services is to figure his cost and then add a 33 percent markup. The method that Kevin uses to determine his prices is called ________-based pricing.
cost
in ______ based pricing, the list price of an item is determined by adding a markup percentage to a products cost
cost
The greatest challenges to e-marketing opportunities lie in ________.
countries with emerging economies
An entrepreneur is one who ________. a. creates a new business concept for the purpose of achieving profit and growth by assembling the necessary resources to capitalize on identified opportunities b. understands the process of developing an idea and does not need to understand what it means to bring that idea to a viable business concept c. is willing to attempt to implement a business concept and then give up if it does not meet immediate expectations d. knows that the concept they are about to develop will result in a profitable business
creates a new business concept for the purpose of achieving profit and growth by assembling the necessary resources to capitalize on identified opportunities
As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called
creative destruction
Cash plus items that are readily convertible to cash, such as accounts receivable, marketable securities, and inventories are classified as ________ on a firm's balance sheet.
current assets
A firm's working capital is its:
current assets minus its current liabilities
A firm's ________ is its current assets divided by its current debt.
current ratio
Opportunities for leadership, niche, harvest and divestment are associated with ________ industries.
declining
jessica smith is thinking about starting a chain of fitness centers for young adults ages 18-30. which of the following is NOT an appropriate criterion for Jessica to test her idea against?
determine whether a fitness center for young adults ages 18-30 meets the threshold of being a good idea
Which of the following is not one of the four steps of the entrepreneurial process?
determining how to seize the spotlight
The developing world accounts for a considerable proportion of the world's ________.
dial-up connections
Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers that Aquafina does are Dasani and Zephyrhills. Dasani and Zephyrhills are Aquafina's ________ competitors.
direct
In the context of competitor analysis, businesses that offer identical or similar products are referred to as ________ competitors.
direct
Which of the following is not an activity which is likely to be practiced at the business process level of e-business commitment?
direct selling
According to the textbook, the three different types of competitors a business will face are ________.
direct, indirect, and future
Women in business still experience ________ as they attempt to break the "glass ceiling." a. opportunities b. success c. discrimination d. ease of navigation
discrimination
The members of heterogeneous teams are:
diverse in terms of their abilities and experiences
In the context of computing the cost of sales, the common way to do this is to use the percent-of-sales method, which is a method for expressing:
each expense item as a percentage of net sales
Southwest Airlines uses its assets very productively. Its turnaround time, or the time that its airplanes sit on their ground while they are being loaded and unloaded, is the lowest in the airline industry. In terms of the primary financial objectives of a firm, this attribute is a measure of Southwest's:
efficiency
Brian Sentry is starting a firm in the small industry that helps football teams discern whether a player has suffered a concussion. This industry is still so new that no standard operating procedures have been developed. The industry Brian Sentry is entering is an example of a(n) ________ industry.
emerging
According to the text, _________ is the most common language with 499 million web users, followed by _________with 407 million web users.
english; chinese
Content sponsorship, direct selling, and social networking, occur at the ________ of the e-business model.
enterprise level
According to the textbook, Dropbox, Facebook, and LinkedIn are examples of ________ firms.
entrepreneurial
"Copreneurs" are defined as ________. a. those entrepreneurs that will eventually combine their business with another venture b. entrepreneurs that work part-time c. entrepreneurial couples that work together as co-owners of their business d. highly successful entrepreneurs with prior company experience and background
entrepreneurial couples that work together as co-owners of their business
Google is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Google has a high level of ________. entrepreneurial intensity innovative concentration innovative intensity enterprise focus creative intensity
entrepreneurial intensity
Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important ________ trend.
environmental
Equity financing (or funding) means ________.
exchanging partial ownership of a firm
A(n) __________ is a company that specializes in helping other companies recruit and select key personnel.
executive search firm
Susan Griffin is in the process of launching a firm in the communications industry, and is trying to identify job candidates to fill the roles of Chief Marketing Officer and Chief Financial Officer. Rather than spend considerable time trying to identify candidates for these positions, she has decided to hire a firm that specializes in helping other companies recruit and select key personnel. Susan is planning to hire a(n):
executive search firm
The only people who ________ are those who never do anything or never attempt anything new. a. fail b. succeed c. profit d. prosper
fail
One hallmark of successful entrepreneurs is the ability to ________. a. be willing to gamble b. repeat the same mistake c. fail intelligently d. overlook past successes
fail intelligently
New Ventures have a high likelihood of ______ ; due to ________
failure, liability of newness
A competitor analysis is a chart that depicts the most important skills that are needed and where skills gaps exist.
false
A copyright is any formula, pattern, physical device, idea, process or other information that provides the owner a competitive advantage in the marketplace.
false
A disadvantage of a sole proprietorship is that it is subject to double taxation.
false
A firm's future competitors are its most important ones.
false
A founding team larger than two people is typically too large to be practical
false
A fragmented industry is a new industry in which standard operating procedures have yet to be developed
false
A fragmented industry is an industry that is experiencing slow increases in demand, numerous repeat customers, and limited product innovation.
false
A statement of cash flows is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time
false
According to reliable statistics, 9 out of 10 businesses fail in their first few years of existence.
false
According to the consensus of the research, some people are genetically predisposed to be entrepreneurs.
false
Although interest in entrepreneurship remains high nationwide, the number of women-owned businesses is decreasing.
false
An emerging industry is one that is characterized by a large number of firms of approximately equal size
false
An inside director is someone who is not employed by the firm. An outside director is a person who is also an officer of the firm
false
Bootstrapping is the process of combining equity investment and bank financing to launch a business.
false
Entrepreneurs are motivated primarily by money.
false
Firms that pursue a multidomestic strategy use the same basic approach in all foreign markets.
false
Founding teams that are working together for the first time, as opposed to founding teams that have worked together before, have an advantage.
false
If a new venture organizes as a corporation, it is legally required to have a board of advisors.
false
In cost-based pricing, the list price is determined by estimating what customers are willing to pay for a product and then backing off a bit to provide a cushion.
false
It is generally believed that new ventures started by an individual have an advantage over those started by a team.
false
Over the past 10 years, the demographic makeup of entrepreneurial firms has remained fairly stable in the United States and around the world
false
Over the past 10 years, the demographic makeup of entrepreneurial firms has remained fairly stable in the United States and around the world.
false
Similar to a board of directors, an advisory board possesses legal responsibility for the firm.
false
Studies show that more than one individual starts 90 percent of all new firms.
false
The balance sheet records all the revenues and expenses for the given period and shows whether the firm is making a profit or is experiencing a loss.
false
The best industry to enter is an industry where the threat of each of Porter's five forces is high.
false
The entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and divesting or selling the entrepreneurial firm.
false
The fact that a corporation has a board of directors precludes it from having a board of advisors.
false
The information that is gathered by a firm to learn about its competitors is referred to as tactical intelligence.
false
The passion that entrepreneurs have typically stems from the ability to pursue their own needs.
false
Unfortunately, statistics show that there is very little interest in entrepreneurship among young people in the United States.
false
a product attribute map illustrates that strength of a firms niche (or target) market relative to competing markets
false
Businesses in emerging economies must deal with problems such as ________.
fewer computer users
Profits and return on investment (ROI) are among the most common metrics used to assess performance from the ________ perspective.
financial
________ depict relationships between items on a firm's financial statements.
financial ratios
In the context of a firm's statement of cash flows, ________ include cash raised during the period by borrowing money or selling stock an/or cash used during the period by paying dividends, buying back outstanding stock, or buying back outstanding bonds.
financing activities
Which of the following qualities was not identified in the textbook as a preferred attribute of the founder(s) of a firm?
firm started by an individual rather than a team OR prior experience working in a government position
According to the textbook, the Five Forces model can be used in the following two ways:
first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry
If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a(n) ________.
first-mover advantage
Real estate, buildings, equipment and furniture are classified as ________ on a company's balance sheet.
fixed assets
________ are an estimate of a firm's future income and expenses, based on its past performance, its current circumstances, and its future plans.
forecasts
A(n) _____ is a written document that deals with issues such as the relative split of the equity among the founders of the firm, how individual founders will be compensated for the cash or the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest.
founder's agreement
Which of the following statements is NOT true regarding the attributes of the founder or founders of a firm?
founders with experience in the same industry as their new ventures will typically have "blinders" on and are typically not as effective as founders new to the industry
A(n) ________ industry is one that is characterized by a large number of firms of approximately equal size.
fragmented
In the context of competitor analysis, ________ competitors are companies that are not yet direct or indirect competitors but could move into one of these roles at any time.
future
The young, job-creating small companies are known as ________.Select one: a. "assertive" b. "aggressive" c. "antelopes" d. "gazelles"
gazelles
A(n) ________ industry is an industry that is experiencing significant international sales.
global
Katherine Chapman recently launched a firm in the clothing industry, targeting 13-17 year olds. One thing Katherine thinks she has accomplished is producing products that have universal appeal, so she will not vary her approach from country to country. Katherine is pursuing a ________ strategy.
global
_____ marketing is a low-budget approach to marketing that relies on ingenuity, cleverness, and surprise rather than traditional techniques.
guerrilla
Successful global e-marketers understand that one of the keys to success is to ________.
have a strategy that is adaptable to different local markets
Which of the following was not mentioned in the textbook as a way that lenders and investors add value to a new venture, beyond providing money?
help manage the day-to-day activities of the firm
The demographic attributes of successful entrepreneurs are ________. a. are key predictors that determine how long the business will survive b. limited to specific ages, genders, and ethnic backgrounds c. highly diverse relating to age, gender, and ethnicity d. uncertain and have not been fully studied or analyzed
highly diverse relating to age, gender, and ethnicity
______ financial statements reflect past performance and are usually prepared on a quarterly and annual basis.
historical
________ reflect past performance and are usually prepared on a quarterly and annual basis.
historical financial statement
Which of the following statements about advisory boards is incorrect?
if a firm has a board of advisory it is not permitted to have anadvisory board
Which of the following statements is incorrect regarding boards of directors?
if a new venture organizes as a corporation, it is not legally required to have a board of directors, but it is strongly recommended
A firm's ________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss.
income statement
Which financial statement records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?
income statement
Macy is a very creative person. Often, when trying to generate a novel or useful idea, she spends several days "mulling over" the idea, which is her way of thinking it through, at both the conscious and unconscious level. The stage of the creative process that Macy is in while she is mulling over an idea is referred to as ________.
incubation
In the beverage industry, soda, fruit juice, and sports drinks are ________ competitors of bottled water.
indirect
In the context of competitor analysis, ________ competitors offer close substitutes to the product sold by the firm completing the analysis.
indirect
A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, airlines, or smartphone apps.
industry
Terry Washington recently started a new firm in the financial services industry. Prior to starting his firm, he spent considerable time doing research on the potential of the industry. The research that Terry was doing is called ________ analysis.
industry
Which of the following issues should be considered in industry/target market feasibility analysis?
industry attractiveness
________ is the process of creating something new, which is central to the entrepreneurial process.
innovation
A board of directors is typically made up of both:
inside and outside directors
In the context of boards of directors, a(n) __________ is a person who is also an officer of the firm.
inside director
Michelle Collins is the Chief Financial Officer of a startup in the electronics industry. She is also a member of her firm's board of directors. In board of directors terminology, Michelle is a(n):
inside director
A company's merchandise, raw materials, and products waiting to be sold are called its:
inventory
Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold that are in her store. On January 1, Peggy is taking account of her store's:
inventory
In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
investing activities
Which of the following is not an attribute of an attractive industry?
is late rather than early in its life cycle
Which of the following statements is UNTRUE regarding founding teams?
it is generally believed that new ventures started by an individual have an advantage over new ventures started by a team
Within emerging economies, labor costs may be quite low, but technology and other business costs can be quite high because of ________.
lack of competition between ISPs
A ________ is a single Web page that typically provides direct sales copy, like "click here to buy a Hawaiian vacation."
landing page
________ are those countries with the world's poorest economies.
least developed countries
Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees couldn't adjust quickly enough to their new roles and that her boutique lacked a "track record" with outside buyers and sellers, which made it difficult to form partnerships and make sales. Savanna suffered from what research calls the ________.
liability of newness
The fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and sellers, is referred to as the ________.
liability of newness
There are three types of startup firms: ________. innovative firms, entrepreneurial firms, and standard firms lifestyle firms, salary-substitute firms, and entrepreneurial firms entrepreneurial firms, standard-of-living firms, and statutory firms standard-of-living firms, statutory firms, and general firms lifestyle firms, general firms, and entrepreneurial firms
lifestyle firms, salary-substitute firms, and entrepreneurial firms
A company's ability to meet its short-term financial obligations is referred to as:
liquidity
The Savvy Entrepreneurial Firm boxed feature in Chapter 8 focuses on a scenario involving the selection of a new CEO for New Venture Fitness Drinks. The lesson learned from the feature was:
look at multiple years of an income statement rather than a single year to fairly assess how well a firm is performing financially
Generally, industries are more attractive when the threat of substitutes is ________.
low
In addition to the opportunity to create their own destiny and enjoy what they do, entrepreneurs also benefit from the ability to ________. a. make a difference in an area important to them and be recognized for those efforts b. earn tremendous wealth without risk and uncertainty c. create wealth without providing true value d. exploit the opportunities that the free enterprise system offers
make a difference in an area important to them and be recognized for those efforts
The primary cause of small business failures is ________. a. poor location b. management mistakes c. improper inventory control d. the lack of capital
management mistakes
Financial management deals with two things raising money and:
managing a company's finances
A company operating from a country with an emerging economy and wanting to target markets in developed countries must understand ________ within the population.
market differences
A(n) ________ industry is an industry that is experiencing slow or no increase in demand.
mature
The four performance areas of the balanced scorecard include all of the following except ________.
metrics perspective
Small companies that operate globally from their inception are referred to as ________. a. intrapreneurial ventures b. international companies c. micromultinationals d. global companies
micromultinationals
According to the textbook, entrepreneurs are ________. aggressive risk takers moderate risk takers gamblers forceful risk takers minimal risk takers
moderate risk takers
Most startup companies can expect to need ________ capital than they anticipate. a. the same b. more c. less d. within 10% of the
more
According to the text, the Web's content and language will become ________ while companies cater to a variety of cultures and provide local content.
more diversified
Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service offerings to meet the demands of the local market.
multidomestic
Kellen West recently launched a firm in the fruit drink industry, and has already exported his fruit drinks to 11 different countries. One thing that Kellen's firm is doing is that it is varying the tastes of the fruit drinks it sells on a country-by-country basis to meet the demands of the local markets. Kellen's firm is pursuing a ________ strategy.
multidomestic
The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy.
multidomestic;global
A firm's profit margin, or return on sales, is computed by dividing:
net income by net sales
According to the textbook, the three numbers that receive the most attention when evaluating an income statement are:
net sales, cost of sales, and operating expenses
Jake Sanderson is a three time business owner. One thing that has served Jake well throughout his entrepreneurial career is his ability to build and maintain relationships with people whose interests are similar or whose relationships could bring advantages to his new ventures. According to the textbook, Jake is a good:
networker
Building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm is called
networking
The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm is called:
networking
A(n) ________ team is the group of founders, key employees, and advisers that either manage or help manage a new business in its startup years.
new venture
A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
new venture team
Kathy Denver is preparing to launch a home security firm. The team of people that will launch Kathy's firm are as follows: Kathy (CEO), Trevor (VP-Finance), Shelia (VP-Sales), a four-person Board of Directors, a five-person Board of Advisors, and Kathy's primary investor, who will assume an advisory role. The group of people that will launch Kathy's firm is called its________.
new venture team
________ percent of all U.S. businesses are family-owned and managed. a. Twenty-five b. Ninety c. Seventy d. Fifty
ninety
The focus in organizational feasibility analysis is on ________.
nonfinancial resources
International opportunities are ________. a. highly limited for entrepreneurs b. risky and do not merit serious consideration by the entrepreneur c. clearly out of reach for entrepreneurial businesses d. now within the reach of entrepreneurial businesses and may present significant opportunities
now within the reach of entrepreneurial businesses and may present significant opportunities
The statement of cash flows is divided into three separate activities:
operating activities, investing activities, and financing activities
the statement of cash flows is divided into 3 separate activities
operating, investing, financing
A _____ is a favorable set of circumstances that creates the need for a new product, service, or business. A ____ is a thought, an impression or a notion.
opportunity;idea
Entrepreneurs tend to be overly ________ and commonly misjudge the ________ requirements of going into business. a. optimistic; professional b. optimistic; personal c. optimistic; financial d. pessimistic; financial
optimistic; financial
_______ feasibility analysis is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business.
organizational
In the context of boards of directors, a(n) __________ is someone who is not employed by the firm.
outside director
Keith Barnes is a general partner in a venture capital firm that just funded South Florida Software, a software firm in Coral Gables, Florida. South Florida Software is incorporated, and Keith has taken a seat on the firm's board of directors. In board of directors terminology, Keith is a(n):
outside director
The most important issues to consider in financial feasibility analysis are: financial performance of similar businesses, total cash needed, and ________.
overall attractiveness of the proposed venture
Important elements of value include all of the following except ________.
partners' perception of product costs
Most marketers organize their marketing mix into four categories. Which of the following is NOT one of those categories?
passion
According to the textbook, the fours characteristics of successful entrepreneurs are ______
passion for the business, tenacity despite failure, product/customer focus, and execution intelligence
A grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for a specific period of time is referred to as a(n) _________.
patent
Which of the following are the four key forms of intellectual property protection?
patents, copyright, trademarks, trade secrets
Which of the following is not one of the four appropriate rationales for choosing the objectives of a strategic plan?
personal justification
Which of the following was NOT identified in the textbook as one of the common traits and characteristics of entrepreneurs? Pessimistic disposition Self-starter Tolerant of ambiguity Tenacious Lengthy attention span
pessimistic disposition
if a firm was launched to help businesses comply with The Affordable Care Act, that opportunity was created by
political actions and regulatory changes
It is useful for a new venture to think about its _____ at both the company level and the product or service level.
position
Cynthia Jones recently surveyed 200 of her classmates to get a sense of the demand for a new software product she is working on. Collecting data via a survey you administer yourself is referred to as ________ research.
primary
Jamie Diehl has spent the past several days pouring over her historical financial statements and her projections for future sales periods based on forecasts. Jamie's objective is to develop a set of financial statements that she can show to an investor, which will reflect the projected financial status of her firm for the next two-three years. Jamie is working on creating a set of ________ financial statements.
pro forma
The ________ provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.
pro forma balance sheet
________ are projections for future periods based on forecasts and are typically completed
pro forma financial statements
a firms _____, in the context of its marketing mix, is the good or service it offers to its target market
product
Some industries, like the athletic shoe industry, are dominated by a small number of firms with strong brands. These industries are difficult to break into without spending heavily on advertising. The barrier to entry that the firms in these types of industries have erected is referred to as ________.
product differentiation
Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacture a new innovative food blender. Stacey's desire is to sell her food blender to as many people as possible because she firmly believes in the merits of her product. Stacey's story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur? Execution intelligence Tenacity despite failure A desire to please consumers Product/customer focus A desire to gain financial rewards
product/customer focus
Most entrepreneurs believe that ________ is what matters most, but ________ is the most important financial resource for a small business owner. a. profit; inventory b. cash; profit c. inventory; cash d. profit; cash
profit; cash
________ is the ability to earn a profit.
profitability
The four main financial objectives of a firm are:
profitability, liquidity, efficiency, and stability
what are the four elements that constitute a firms marketing mix
promotion, price, place, product
According to the textbook, although a board of directors has formal governance responsibilities, its most useful role is to:
provide guidance and support to the firm's managers
Efforts to establish and maintain a company's image with the public are referred to as:
public relations
Financial management deals with two activities: managing a company's finances and ________.
raising money
According to the textbook, the five competitive forces included in the Five Forces model determine the average ________.
rate of return for the firms in an industry
According to the textbook, the most practical way to interpret or make sense of a firm's historical financial statements is through:
ratio analysis
Which of the following is an example of a long-term liability?
real estate mortgage
The "What Went Wrong" feature in Chapter 6 focuses on Garden.com, a 1996 startup in the online gardening supplies industry. According to the feature, Garden.com's failure is a vivid reminder of the importance of __________ for the founders of a new venture.
relevant industry experience
There are two primary reasons to conduct an intellectual property audit. First, it is prudent for a company to periodically determine whether its intellectual property is being properly protected. The second reason for a company to conduct an intellectual property audit is to ____
remain prepared to justify its value in the event of a merger or acquisition.
The majority of small companies are concentrated in the ________ and ________ industries.a. manufacturing; serviceb. wholesale; retailc. manufacturing; retaild. retail; service
retail;service
The recent number of job losses in large corporations compared to the jobs created by small business has changed the perception of ________ for launching a new business. Select one: a. financing opportunities b. prestige c. short-term potential d. risk
risk
Which of Porter's five forces is most directly influenced by the number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs?
rivalry among existing firms
Colorado Sandwich, Soup and Salad is a casual dining restaurant that has been owned by Stephanie Peterson for the past 14 years. The restaurant offers a menu that is typical for casual dining restaurants and affords Stephanie a level of income that is similar to what she would earn in a conventional job. According to the textbook, Colorado Sandwich, Soup and Salad is an example of a(n) ________ firm.
salary-substitute
John has come to you for advice on starting a business venture. He wants to know the best way to gain the experience he'll need. You suggest that he ________. a. read a small business book b. determine his weaknesses and return to school for a term or two c. seek knowledge and experience in the field he wishes to enter d. just jump in and learn as he goes
seek knowledge and experience in the field he wishes to enter
Brenda is thinking about starting a computer company. After doing some research, she has decided that the computer industry can be divided into the following product types: handhelds, laptops, tablets, and PCs. The process that Brenda just completed is called market ______.
segmentation
Once a firm has segmented the market, the next step is to ____________.
select a target market
Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs. a. opportunistic b. classic c. serial d. persistent
serial
Which of the following statements incorrect regarding the personal characteristics of entrepreneurs
several studies show that prior experience in an industry actually blinds an entrepreneur to the recognition of new opportunities in the same industry
Which of the following is not a personality trait or characteristic common among entrepreneurs?
short attention span
Betty Cassidy just launched a firm in the medical products industry. On the day the company was launched, Betty issued a press release, indicating that the vice president of Johnson & Johnson, a highly respected drug company, had agreed to serve on her board of directors. Betty knows that such a high quality appointment will send an important message to her potential clientele. This phenomenon is referred to as:
signaling
Michael Castor just launched a firm in the wireless communications industry. Shortly after the company was launched, Michael announced that a prominent Silicon Valley venture capitalist had agreed to serve on his board of directors. Michael knows that such a high quality appointment will send an important message to his potential business partners and clientele. This phenomenon is referred to as:
signaling
The members of homogeneous teams are:
similar in terms of their abilities and experiences
Which of the following statements about advisory boards is incorrect?
similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas
________ entrepreneurs are business builders who seek innovative solutions to some of society's most vexing problems. a. Social b. Serial c. Opportunistic d. Necessity
social
The strength and vigor of a firm's overall financial posture is referred to as:
stability
Match the financial objective with its correct definition.
stability-the overall health of the financial structure of the firm, particularly as it relates to its debt-to-equity ratio
The two general categories of business models are ________ and ________.
standard;disruptive
Which of the financial statements used by businesses to keep track of their financial affairs is the most similar to an ordinary person's end-of-the month bank statement?
statement of cash flows
According to Chapter 1, investors often cite the ________ as their most important criterion in the decision to fund new ventures.
strength of the entrepreneur
Which of the following was NOT identified in the textbook as an element of a new venture team?
suppliers and vendors
The internal perspective of the Balanced Scorecard gives particular attention to ________.
supply chain value to the company
Gillian's startup, which is in the organic food industry, was launched on January 1, 2016. However, prior to its formal launch, Gillian spent many hours working on her business without pay, particularly during the feasibility analysis stage. This time and effort that a founder puts into a new venture is referred to as __________ equity
sweat
Nike's familiar phrase "Just do it" is an example of a(n):
tagline
The Savvy Entrepreneurial Firm feature in Chapter 1 focuses on Pandora, the Internet streaming music company. The feature's main purpose is to illustrate the importance of ________ as a key characteristic of the founders and employees of entrepreneurial firms.
tenacity despite failure
Which of the following statements is not true about women-owned businesses in the United States?
the number of women-owned businesses is decreasing OR The number of women-owned businesses is growing slower than the national average.
which of the following statements is incorrect in regard to entrepreneurial alertness
the research findings on entrepreneurial alertness are conclusive
In regard to business models, which of the following statements is incorrect?
there is a standard business model that most firms follow
According to the textbook, which of the following statement is inaccurate regarding the size and composition of the founding team of a firm?
there is no relationship between a founding team's size and its effectiveness OR A founding team can be too big, causing communication problems and increasing potential for conflict.
A firm's pro forma financial statements are similar to its historical financial statements except that:
they look forward rather than back
According to Chapter 1, a sentiment that venture capitalists often express is that ________. they would never fund a strong entrepreneur with a weak business idea they would rather fund a strong business idea with a mediocre entrepreneur than fund a strong entrepreneur with a mediocre business idea they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur a new venture's marketing plan is more important than either the strength of the entrepreneur or the strength of the business idea the strength of the entrepreneur and the strength of the business idea are of equal importance
they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur.
In general, industries are more attractive when the ________.
threat of each of the five forces is low
Economies of scale are a relevant factor in which of the five forces?
threat of new entrants
Which of Porter's five forces is most closely associated with the concept "barrier to entry"?
threat of new entrants
Which one of the following is NOT a force in the five forces model of industry analysis?
threat of stakeholders
The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces explains how this aspect of the prescription medicine industry helps keep profitability high?
threat of substitutes
Nearly ________ of entrepreneurs start their businesses between the ages of 20 and 44 and the number of Americans in that age range currently is ________ . a. one-fourth; 85 million b. one-half; 8.5 million c. three-fourths; 103 million d. two-thirds; 85,000
three-fourths; 103 million
A network entrepreneur is an individual who identifies his or her business idea ________.
through social contracts
Which of the following was not identified as one of the four main financial objectives of a firm?
timeliness
According to the Global Entrepreneurship Monitor (GEM) 2015-2016 study, the majority of people in high-income countries are drawn to entrepreneurship ________. as a result of government incentives because an important role model was an entrepreneur due to lack of career prospects to take advantage of an attractive opportunity to gain prestige
to take advantage of an attractive opportunity
On a firm's income statement, net sales consists of:
total sales minus allowances for returned goods and discounts
An event that prompts an individual to become an entrepreneur such as losing a job, inheriting money, or accommodating a certain lifestyle is referred to as:
triggering event
Jan Berry recently received a $500,000 inheritance from her maternal grandmother. Jan decided to use the money to start a business. According to the textbook, the inheritance that Jan received was the _____ that prompted her to start her business.
triggering event
A competitive analysis grid is a tool for organizing the information a firm collects about its competitors.
true
A new venture team is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm.
true
A trademark is any word, name, symbol, or device used to identify the source or origin of products or services and to distinguish those products or services from others.
true
According to the GEM 2013 survey, about 1 our of every 8 American adults is actively engaged in starting a business or is the owner/manager of a business that is less than 3 1/2 years old.
true
Although a board of directors has formal governance responsibilities, its most useful role is to provide guidance and support to the firm's managers.
true
An advisory board can be established for general purposes or can be set up to address a specific need.
true
An advisory board is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis.
true
An industry is a group of firms producing a similar product or service, such as tires, life insurance, or smartphone apps.
true
Because of the weakness associated with advertising, most startups do not advertise their products broadly.
true
Crowdfunding is the practice of funding a project or new venture by raising monetary contributions from a large number of people, typically via the Internet.
true
Established Firms with an entrepreneurial emphasis are proactive, innovative and risk-taking.
true
Heterogeneous teams are diverse in terms of their abilities and experiences
true
If the buyers are concentrated and they buy from a large number of suppliers, then the bargaining power of buyers is increased
true
In most industries, the major determinant of industry profitability is the level of competition among the firms already competing in the industry
true
In terms of types of startup firms, entrepreneurial firms bring new products and services to market.
true
Industry analysis is business research that focuses on the potential of an industry
true
It is important for an entrepreneur to select an attorney as early as possible when developing a business venture.
true
Joseph Schumpeter argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity.
true
Many start-ups emphasize public relations over advertising primarily because it's cheaper and helps build a firm's credibility.
true
Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.
true
Prior entrepreneurial experience is one of the most consistent predictors of future entrepreneurial performance.
true
Prior entrepreneurial experience, relevant industry experience, and networking are attributes that strengthen the chances of a founder's success.
true
The first step in a competitor analysis is to determine who the competition is
true
The five competitive forces model is a framework for understanding the structure of an industry.
true
The primary opportunity available to firms in fragmented industries is consolidation. The most common way to do this is through a geographic roll-up strategy, in which one firm starts acquiring similar firms that are located in different geographic areas.
true
The term liability of newness refers to the fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record" with outside buyers and suppliers.
true
The three types of competitors a business will face are direct competitors, indirect competitors, and future competitors.
true
The two trends that are most important to focus on in an industry analysis are business trends and environmental trends.
true
There are four factors that determine the threat of new entrants: number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs.
true
the google adwords program allows advertisers to buy ads that will be shown on other Web sites instead of googles home page
true
Potential drawbacks of entrepreneurship may include ________. a. uncertainty of income, risk, long hours, and the immediate accumulation of wealth b. uncertainty of income, risk, easy hours, and frequent vacations c. certainty of income, risk, long hours, and high stress d. uncertainty of income, risk, long hours, and high stress
uncertainty of income, risk, long hours, and high stress
All of the following are characteristics of the typical entrepreneur except ________. a. desire for immediate feedback b. value of money over achievement c. a future orientation d. confidence in his/her ability to succeed
value of money over achievement
according to research in this area, it is more likely that an entrepreneur will get a new business idea through a ____ relationship than the alternatives
weak-tie
When evaluating a balance sheet, the two primary questions are:
whether a firm has sufficient short-term assets to cover its short-term debts and whether it is financially sound
Brad Johnson is starting an upscale men's clothing store in a mall near Seattle. He wants to open his store during the time period in which a business like his can realistically enter the new market. Brad is trying to open his business while the ________ is open.
window of opportunity
A financial statement is a(n):
written report that quantitatively describes a firm's financial health
3 types of startup firms:
1. Lifestyle Firms 2. Salary-substitute Firms 3. Entrepreneurial Firms
four areas of feasibility analysis
1. Product/Service 2. Industry/Target 3.Organizational 4. Financial
According to the Global Entrepreneurship Monitor (GEM) 2015-2016 survey, about ______ percent of adults in the United States are either starting a business or are running a business that has been in existence for less than 3 1/2 years.
11.9
According to the global entrepreneurship monitor (GEM) 2013 survey, about percent of adults in the united states are wither starting a business or are running a business that has been in existence for less than 3 1/2 years
12.7
According to a recent Gallop survey, about ______ percent of kids in grades 5-12 say they plan to start their own business.
40%
Of the 28 million businesses in the United States, more than ________ percent are considered small. a. 75 b. 88 c. 50 d. 99
99
Which of the following is not one of the five common myths about entrepreneurs?
Entrepreneurs are tenacious.
Alex and Patty Webb launched a firm several years ago and have been particularly successful in introducing new products to the marketplace. One thing that Alex and Patty are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace. The ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs?
Execution intelligence
Which of the following statements is not true regarding the diversity of entrepreneurs?a. Minority-owned businesses have come a long way in the past decade, and their success rate is climbing.b. Minority-owned businesses now account for approximately 22 percent of all businesses in the U.S. c. The numbers of part-time and home-based entrepreneurs are rising.d. Immigrants with more education and experience than those of the past are coming to the U.S. and succeeding in entrepreneurial ventures.
Minority-owned businesses now account for approximately 22 percent of all businesses in the U.S.
According to the textbook, the passion that motivates people to launch entrepreneurial firms typically stems from the entrepreneurs belief that the business will
Positively influence peoples lives
Stacey Wills, who is at heart a craftsperson, recently started a firm to manufacturer a new innovative food blender. Stacey's desire is to sell her food blender to as many people as possible because she firmly believes in the merits of her product. Stacey's story best illustrates which of the following characteristics, or attributes, of a successful entrepreneur? A desire to gain financial rewards A desire to please consumers Tenacity despite failure Execution intelligence Product/customer focus
Product/customer focus
Which of the following was not given in the textbook as a reason for the increase in the number of senior entrepreneurs?
Seniors tend to be more passionate about new business ideas than middle-aged or younger prospective entrepreneurs.
In regard to patent activity (issuance), which of the following statements is correct?
Small businesses outperform their larger counterparts.
business model
a firm's plan or recipe for how it creates, delivers, and captures value for its stakeholders.
The What Went Wrong> feature in chapter 1 focuses on Prim failed largely as a result of _______
a lack of passion and resolve
Which of the following is a characteristic of copreneurs? a. Mutual respect b. Complementary business skills c. A clear division of roles and authority d. All of these
all of these
Entrepreneurial Firms _______.
bring new products and services to market by creating and seizing opportunities
A ______ is a written document that describes all the aspects of a business venture in a concise manner.
business plan
Melinda and John Perez, both corporate attorneys in New York City, have grown tired of their lengthy daily commute, the stress of their jobs, and the overbearing policies of their employers. They have decided to leave their six-figure jobs and together open a guide service in Wyoming. Melinda and John are examples of ________. a. corporate castoffs and copreneurs b. copreneurs and serial entrepreneurs c. corporate dropouts and copreneurs d. corporate castoffs and corporate dropouts
corporate dropouts and copreneurs
As new products that are better than the existing generation of products are introduced, sales normally increase because the new products provide consumers increased value or worth. This process, which is called ________, stimulates economic activity, which is a good thing for the economy. iterative destruction inventive replacement iterative replacement repetitive destruction creative destruction
creative destruction
Which of the following was not identified as one of the suggestions for small business success?a. Manage your financial resources and understand financial statements.b. Know your business in depth.c. Develop a business plan as you grow your business. d. Learn to manage people successfully.
develop a business plan as you grow your business
Google is a firm that is proactive, innovative and risk-taking. From this description, we can most accurately conclude that Google has a high level of ________. innovative concentration creative intensity entrepreneurial intensity innovative intensity enterprise focus
entrepreneurial intensity
One of the most significant economic developments in recent business history relates to the ________. a. growth of blue-chip corporations b. entrepreneurial spirit c. development of Pacific Rim countries d. additional employment opportunities offered by government institutions
entrepreneurial spirit
Pacific Fishing LLC is a startup that is working on a new technology for the fishing industry. Because the technology it's working on is highly proprietary, the company is located in the warehouse district of a large western city. Pacific's founder, Ray Sims, rarely gives interviews and is careful to not divulge much about what the company is doing. Which of the following common myths about entrepreneurs does the behavior of its founder, Ray Sims, dispel?
entrepreneurs love the spotlight
Entrepreneurship is the process by which individuals pursue opportunities within the constraints of the resource they control.
false
The Partnering for Success feature in Chapter 1 focuses on start-up incubators and accelerators. According to the feature, participating in a start-up incubator or accelerator is an excellent way to ________.
gain access to mentors, partners and investors
concept test
involves showing a preliminary description of a product or service idea.
Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm.
lifestyle
Montana Sky Trails leads multiday outdoor adventure trips for private groups and corporate clients to various locations across Montana. The company was started by Justin Smith, an individual that gave up a prestigious job in banking because Montana Sky Trails better accommodates his personal lifestyle. Montana Sky Trails is an example of a(n) ________ firm. lifestyle statutory standard-of-living salary-substitute entrepreneurial
lifestyle
Entrepreneurs who start businesses because they cannot find work any other way are ________. a. corporate cast-offs b. necessity entrepreneurs c. serial entrepreneurs d. opportunity entrepreneurs
necessity entrepreneurs
Cody Rodgers is the founder of a company named Extreme Sports Apparel. The company makes apparel products for extreme sports enthusiasts such as rock climbers, triathletes, skateboarders, and BMX bikers. Cody wants his company to pursue a high level of corporate entrepreneurship. To achieve that goal, Cody's firm should be ________. proactive, not innovative, and risk taking taking a "wait and see" posture, innovative, and risk taking taking a "wait and see" posture, not innovative, and risk averse proactive, innovative, and risk taking innovative, risk averse, and take a "wait and see" posture
proactive, innovative, and risk taking
According to the opening feature on Pure Fix Cycles, one of the biggest challenges the startup now faces in an increasingly competitive marketplace.
true
According to the opening feature on Pure Fix Cycles, one of the biggest challenges the startup now faces is an increasingly competitive marketplace.
true
