Entrepreneurship - Midterm
A feasibility analysis consists of four interrelated components: an industry and market feasibility analysis, a product or service feasibility analysis, a financial feasibility analysis, and an entrepreneur feasibility analysis
True
A feasibility analysis is the process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business.
True
A product or service feasibility analysis determines the degree to which a product or service idea appeals to potential customers and identifies the necessary resources. Correct!
True
A well-prepared business plan forces an entrepreneur to assess the venture's chances of success more objectively. Correct!
True
Acting with integrity means that entrepreneurs do what is right no matter what the circumstances.
True
Although creativity sometimes involves generating something from nothing, it more likely results in elaborating on the present, putting old things together in new ways, or taking something away to create something simpler or better. Correct!
True
An effective tool used to help assess ideas is the idea sketch pad.
True
An idea assessment is the process of examining a need in the market, developing a solution for that need, and determining the entrepreneur's ability to successfully turn that idea into a business.
True
Business ethics is a sensitive and highly complex issue, but it is not a new one.
True
Capital requirements, estimate earnings, and return on investment are three aspects of the financial feasibility analysis.
True
Creativity and innovation are the signature of small, entrepreneurial businesses. Correct!
True
Creativity is not only an important source for building a competitive advantage, but it also is necessary for survival.
True
Creativity is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.
True
Ethical behavior is doing what is "right."
True
Management is an example of a stakeholder.
True
The law is the narrowest level of ethical standards.
True
The purpose of a feasibility study is to determine whether a business idea is worth pursuing.
True
Entrepreneurs who start businesses because they cannot find work any other way are ________.
necessity entrepreneurs
The value test that a business plan must pass to attract financing from lenders and investors involves proving ________.
that the business venture will provide lenders and investors a high probability of repayment or an attractive rate of return
Which of the following is required to form a partnership?
A general partner
Which of the following issues would a typical partnership agreement address?
All of these
Which of the following issues would influence an entrepreneur's choice of a form of business ownership?
All of these
Which of the following is not true of a limited liability partnership?
Although LLPs have many of the characteristics of partnerships, they are taxed as a corporation.
An idea assessment answers the question, "Should we proceed with this business idea?"
False
Creativity and innovation are the signature of large, entrepreneurial businesses.
False
Creativity is the ability to apply creative solutions to problems and opportunities to enhance or enrich people's lives.
False
Current competitive conditions favor large companies over smaller ones because of their flexibility combined with their ability to use their size to achieve efficiency and economies of scale.
False
Entrepreneurs typically identify just one business idea for any given market need.
False
Increased entrepreneurial activity is a phenomenon unique to the U.S.
False
Innovation is the ability to develop new ideas and to discover new ways of looking at problems and opportunities.
False
Research has isolated a set of characteristics that can predict who will succeed as an entrepreneur.
False
Social responsibility is a branch of philosophy that studies and creates theories about the basic nature of right and wrong, duty, obligation, and virtue.
False
The business plan helps an entrepreneur assess ideas in a relatively short period of time.
False
The competitive test that a business plan must pass to attract financing for lenders and investors involves proving to them that the venture offers a high probability of repayment or an attractive rate of return.
False
The primary purpose of building a business plan is to raise capital.
False
________ is a special type of limited partnership in which all partners who, in many states must be considered to be professionals, are limited partners. Correct!
Limited liability partnership (LLP)
What are some of the most important questions a feasibility analysis answers and what model may be of value in this process?
Should we proceed with this business idea? ; A business model
Which form of ownership generally has the least ability to accumulate capital?
Sole proprietorship
What is an entrepreneur? Give a brief profile of a typical entrepreneur. What is the primary motivation for the typical entrepreneur?
The typical profile of an entrepreneur includes a desire for responsibility, confidence in the ability to succeed, determination, a high level of energy, desire for immediate feedback, and a future orientation. The primary motivation for the typical entrepreneur is the opportunity to create your own destiny.
A business plan is a written summary of an entrepreneur's proposed venture, its operational and financial details, its marketing opportunities and strategy, and its managers' skills and abilities.
True
Changing from one form of ownership to another once a business is up and running can be difficult, expensive, and complicated.
True
Ethics and social responsibility simply set behavioral boundaries for decision makers.
True
First comes idea assessment, then comes feasibility analysis.
True
For every 5,000 to 10,000 new drug discoveries, only about five make it to clinical trials and only one typically gets to the market.
True
Globally, one in eight adults is actively engaged in launching a business.
True
Innovation is the ability to apply creative solutions to problems and opportunities to enhance or enrich people's lives.
True
Innovation must be a constant process because most ideas do not work and most innovations fail. Correct!
True
One study conducted by the Global Entrepreneurship Monitor (GEM) reports that nearly one in eight people in the United States is working to start a business.
True
Serial entrepreneurs repeatedly start businesses and grow them to a sustainable size before striking out again.
True
Surveys show that small business owners believe that, as entrepreneurs, they work harder, earn more money, and are happier than if they worked for a large company.
True
The reality test that a business plan must pass to attract financing from lenders and investors involves proving that a market for the company's product or service actually does exist, and that the company actually can build it for the cost estimates in the plan.
True
The value test that a business must pass to attract financing from lenders and investors involves proving to them that the venture offers a high probability of repayment or an attractive rate of return. Correct!
True
To get external financing, an entrepreneur's business plan must pass the reality test, the competitive test, and the value test with potential lenders and investors. Correct!
True
Entrepreneurs typically possess ________.
a high level of commitment, have a tolerance for ambiguity, are flexible and tenacious
In a general partnership, ________.
each partner is held responsible for an agreement/decision made by any one of the partners
One of the most significant economic developments in recent business history relates to the ________.
entrepreneurial spirit
________ is a branch of philosophy that studies and creates theories about the basic nature of right and wrong, duty, obligation, and virtue.
ethics
The process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business is known as a(n) ________.
feasibility analysis
The Kauffman Foundation reports that nearly one out of ________ entrepreneurs in the United States start businesses of their own because they cannot find jobs elsewhere.
five
Acme Corporation is chartered in Delaware, but its primary area of operation is in South Carolina. In South Carolina, Acme would be considered a(n) ________ corporation.
foreign
In a partnership, the ________ partner(s) has (have) unlimited liability for the partnership's debts.
general
A(n) ________ is the process of examining a need in the market, developing a solution for that need, and determining the entrepreneur's ability to successfully turn the idea into a business.
idea assessment
The ability to apply creative solutions to problems and opportunities to enhance or to enrich people's lives is called ________.
innovation
Probably the most important reason to have a partnership agreement is that ________.
it resolves potential sources of conflict that, if not addressed in advance, could later result in partnership battles and dissolution of an otherwise successful business
A ________ partner is a person who makes financial investments in a partnership, does not take an active role in managing the business, and whose liability for the partnerships' debts is limited to the amount they have invested.
limited
A ________ partnership is composed of at least one general partner and at least one limited partner.
limited
A special type of partnership in which all partners, who in many states must be professionals, are limited partners is called ________ partnership.
limited liability
In addition to the opportunity to create their own destiny and enjoy what they do, entrepreneurs also benefit from the ability to ________.
make a difference in an area important to them and be recognized for those efforts
A partnership agreement defines how the partners will be compensated. Normally, ________.
partners are not entitled to salaries or wages, but are compensated by a share of the profits of the business
All of the following are advantages of a partnership except ________.
partnerships have the greatest ability to accumulate capital of all of the forms of ownership
Potential investors tend to believe that if an entrepreneur cannot develop a good plan, the entrepreneur ________.
probably lacks the discipline to run a business
The three parts of the triple bottom line are ________.
profit, people, and planet
The ________ test that a business plan must pass to attract financing from lenders and investors involves proving that a market for the company's product or service actually does exist and that the company actually can build it for the cost estimates included in the plan.
reality
The three "tests" associated with a business plan are ________. Correct!
reality, competitive, and value
Entrepreneurs who repeatedly start businesses and grow to a sustainable size before striking out again are known as ________ entrepreneurs.
serial
________ responsibility is how an organization responds to the needs of the many elements in society.
social
________ sets behavioral boundaries for decision makers.
social responsibility
More women entering the workforce is an example of a(n) ________ change.
sociocultural
Marco is opening a new computer repair shop. He is owner and sole employee. He has paid the appropriate fees and licensing costs and begun his business. This is an example of a(n) ________.
sole proprietorship
The most common form of business ownership that is also the simplest to create is the ________.
sole proprietorship
The various groups and individuals who affect and are affected by a business are called ________.
stakeholders
The reality test that a business plan must pass to attract financing from lenders and investors involves proving ________.
that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan
The competitive test that a business plan must pass to attract financing from lenders and investors involves proving ________.
that the company can gain a competitive advantage over its key competitors
________ is/are the narrowest level of ethical standards.
the law
The most critical disadvantage of the sole proprietorship is ________.
the owner's unlimited personal liability
Harvard's Ted Levitt says that creativity is ________ new things, and innovation is ________ new things.
thinking; doing
The second essential purpose for creating a business plan is ________.
to attract lenders and investors
The key to choosing the right form of ownership is ________.
understanding the characteristics of each form and knowing how they affect your business and personal circumstances
To convince lenders and investors to put their money into the venture, a business plan must prove to them that it offers a high probability of repayment or an attractive rate of return. This is the ________ test.
value
All of the following are characteristics of the typical entrepreneur except ________.
value of money over achievement
Ethical behavior is doing what is ________.
"right"
There are ________ levels of ethical standards.
3
According to the KPMG's Integrity Survey, ________ percent of workers say that they observed ethical lapses in their companies within the last year.
73
A business plan ________.
All of these
A business plan is a written summary of ________.
All of these
A solid business plan ________.
All of these
Creativity often involves creating something from nothing. However, it is more likely to result in ________.
All of these
Entrepreneurs are characterized by ________.
All of these
Research shows that anyone can learn to be creative. The problem is ________.
All of these
Which of the following is not a stakeholder for an organization?
All of these are stakeholders
The profile of an entrepreneur includes ________.
All of these.
What is the entrepreneurial "secret" for creating value in the marketplace?
Applying creativity and innovation to solve problems
________ includes any assets an entrepreneur pledges to a lender as security for repayment of the loan.
Collateral
Which of the following is not one of the five Cs of credit?
Connections
________ is necessary for building a competitive advantage and for business survival.
Creativity
What are the parameters used in an idea sketch pad?
Customers - Clear un-addressed need Offering - Describe idea for product to offer to customers Value proposition - Explain why the product is important Core competencies - Determine if you really differentiate from competitors. People - Identify key people to launch this business
Which of the following is not a macro force that creates change in industries?
Entry barriers
The opportunity to reap impressive profits is the primary motivation for most entrepreneurs.
False
Ethical behavior starts with society.
False
An entrepreneurial "secret" for creating value in the marketplace is ________.
applying creativity and innovation to solve problems
When developing creative solutions to modern problems, entrepreneurs must ________.
go beyond merely using whatever has worked in the past
________ consists of the fundamental moral values and behavioral standards that form the foundation for the people of an organization as they make decisions and interact with stakeholders.
business ethics
The Internet is an example of a(n) ________ force.
technological
An entrepreneur is one who ________.
creates a new business concept for the purpose of achieving profit and growth by assembling the necessary resources to capitalize on identified opportunities
The ability to develop new ideas and to discover new ways of looking at problems and opportunities is called ________.
creativity
Entrepreneurship is a constant process that relies on ________.
creativity, innovation, and application in the marketplace
Generation Y and Generation Z are examples of ________ changes.
demographic
________ sets behavioral boundaries for decision makers.
ethics
An effective tool used to help assess ideas is the ________.
idea sketch pad