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Business Model

A firm's plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates.

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

3 Minute Optimizer and Optimizely are Web sites that provide access to ________.

A/B split testing services

The pro forma ________ 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.

Balance Sheet

The three primary reasons that people become entrepreneurs and start their own firms are to

Be their own boss, pursue their own ideas, and pursue financial rewards

Entrepreneurial firms

Bring new products and services to the market by creating and seizing opportunities

In the Barringer/Ireland Business Model Template, a(n) ________ is a specific factor or capability that supports a firm's business model and sets it apart from its rivals.

Core Competency

The Resources section of the Barringer/Ireland Business Model Template consists of the ________ and ________ boxes.

Core Competency; Key Assets

In the terminology of the Barringer/Ireland Business Model Template, a firm's ________ structure describes the most important costs incurred to support its business model.

Cost

Jenna Franklin is completing the portion of the Barringer/Ireland Business Model Template that describes the most important costs that will be incurred to support her business model. Jenna is completing the ________ structure box in the business model template.

Cost

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.

Creative destruction

Some companies set up ________ that meet regularly to discuss needs, wants, and problems that may lead to new ideas.

Customer advisory boards

According to the textbook, the three different types of competitors a business will face are ________.

Direct, Indirect, and Future

The ________ section of the business plan addresses the basic logic of how profits are earned in the business.

Economics of the business

A company's ability to productively utilize its assets relative to its revenue and its profits is referred to as ________.

Efficiency

Brain 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 Brain Sentry is entering is an example of a(n) ________ industry.

Emerging

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

Melanie Summer spoke to an investor who is interested in her business idea. Melanie offered to send the investor a copy of her full business plan, but the investor asked for a short overview of the business plan instead. What portion of her business plan should Melanie send the investor?

Executive Summary

The ________ is a short overview of the entire business plan.

Executive Summary

________ feasibility analysis is a quick financial assessment of the viability of a business idea.

Financial

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

According to the textbook, the first rule in making an oral presentation is to ________.

Follow the instructions

The Partnering for Success feature in Chapter 4 focused on Web-based platforms, including Upwork and Guru, that make it easy to identify and hire experienced ________.

Freelancers

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 What Went Wrong? feature for Chapter 8 focuses on Wise Acre Frozen Treats, a company that made organic popsicles from unrefined sweeteners. According to the feature, Wise Acre Frozen Treats failed largely because it ________.

Grew to quickly and overwhelmed its cash flow

Which of the following factors is a positive as it pertains to the financial feasibility of a business venture?

High percentage of recurring revenue

________ financial statements reflect past performance and are usually prepared on a quarterly and annual basis.

Historical

Economic forces impact the opportunities available to entrepreneurs. Which of the following alternatives reflects a set of economic forces that would be of interest to entrepreneurs?

Housing starts, consumer spending patterns, and stability of interest rates

Which of the following selections correctly matches the financial statement with its description?

Income statement — tells how much a firm is making or losing.

________ feasibility analysis is an assessment of the overall appeal of the industry and market for the product or service being proposed.

Industry/Target market

In the context of a firm's statement of cash flows, ________ activities include the purchase, sale, or investment in fixed assets (e.g., real estate, equipment, and buildings).

Investing

An entity created by two or more firms pooling a portion of their resources to create a separate, jointly-owned organization is called a ________.

Joint venture

The What Went Wrong? feature in Chapter 1 focuses on Prim, a failed startup in the laundry industry. According to the feature, Prim failed largely as a result of ________.

Lack of passion and resolve

A ________ is a single Web page that typically provides direct sales copy, like "click here to buy a Hawaiian vacation."

Landing Page

According to the textbook, many investors and others who read business plans look first at the executive summary and then go directly to the ________ section of the business plan to make their preliminary assessment.

Management team and company structure

A competitor analysis should be included in the ________ section of a business plan.

Market analysis

A(n) ________ industry is an industry that is experiencing slow or no increase in demand.

Mature

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

A(n) ________ is a favorable set of circumstances that creates a need for a new product, service, or business.

Oppurtunity

Which of the following was NOT identified in the textbook as one of the common traits and characteristics of entrepreneurs?

Pessimistic disposition

________ research is research that is collected by the person or persons completing the analysis.

Primary

Which of the following statements about pro forma financial statements is incorrect?

Pro forma financial statements are required by the SEC

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?

Product/Customer Focus

A company's ________ scope defines the products and markets on which it will concentrate.

Product/Market

Does it make sense? Is it reasonable? Is it something consumers will get excited about? Does it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace? These are the types of questions asked during the ________ feasibility component of a complete feasibility analysis.

Product/Service

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

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

Which of the following firms introduced a disruptive business model?

Salesforce

________ research probes data that is already collected.

Secondary

Casey Griggs is a very capable computer engineer. Recently, he noticed a problem that computer engineers have, and thought of a solution to the problem that might represent an opportunity for a new software product. Casey's idea for a new software product is an example of a(n) ________ discovery.

Serendipitous

The increasing number of social networks on the Internet is attributed to a jump in the number of people who are wanting to connect with one another online. The increasing number of social networks is an important ________ trend.

Social

An individual who identifies a business idea on his or her own is referred to as a(n) ________ entrepreneur.

Solo

Conner Brandshaw is investigating the feasibility of a new type of electronic game targeting middle school and high school-age boys. Which of the following is an example of "gumshoe research" that Conner could conduct to get a sense of the likely demand for his game?

Spend several days in electronic games arcades and stores to observe the types of games that attract the interest of middle school age and high school age boys.

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

________ business models depict existing plans or recipes firms can use to determine how they will create, deliver, and capture value for their stakeholders.

Standard

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

________ relationships are characterized by frequent interactions that form between coworkers, friends, and spouses.

Strong-Tie

According to the textbook, the only way to know if your product or service is what people want and need is by ________.

Talking to them

Kaitlyn Harris is opening up a women's fashion boutique that will focus on professional women that are 18-30 years old. The age range of women that Kaitlyn plans to focus on is referred to as her ________ market.

Target

Hulu.com allows people to watch television shows and movies on the Internet. Hulu.com's business opportunity was made possible by ________ that enhanced the ability of television shows and movies to be uploaded to the Internet and played by anyone with a suitable computer and an Internet connection.

Technological Advances

Which of the following is an incorrect approach to administering a concept test?

The best candidates to distribute a concept statement to are family and friends.

Which of the following statements is incorrect in regard to entrepreneurial alertness?

The research findings on entrepreneurial alertness are conclusive

Which of Porter's five forces is most closely associated with the concept "barrier to entry"?

Threat of New Entrants

According to research in this area, it is more likely that an entrepreneur will get a new business idea through a ________ -tie relationship than the alternatives.

Weak

The two primary audiences for a business plan are ________ and ________.

a firm's employees and investors; other external stakeholders

Operating leverage is highest in companies that have ________.

a high proportion of fixed costs relative to their variable costs

One of the firms profiled in the Savvy Entrepreneurial Firm feature is The Muse. The Muse is in the ________ industry.

competitive recruitment and placement

Industry structure refers to how ________ an industry is.

concentrated or fragmented

According to the textbook, a business plan is best described as a(n) ________.

narrative description of a new business

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

Cody wants his company to pursue a high level of corporate entrepreneurship. To achieve that goal, Cody's firm should be

proactive, innovative, and risk taking

In general, industries are more attractive when the ________.

threat of each of the five forces is low

A financial statement is a(n) ________.

written report that quantitatively describes a firm's financial health