Management Final Chapter 7

A positive aspect of opening a small business is that it takes very little management skill because it is small. a. True b. False

b. False

Due to their size large businesses tend to have greater flexibility than small businesses. a. True b. False

b. False

Entrepreneurs, as a general group, dislike risk taking. a. True b. False

b. False

Many small businesses that sell their products internationally use the services of export management companies (EMCs). a. True b. False

b. False

debt

borrowed funds that must be repaid with interest over a stated time period

exporting trade companies

companies that buy goods at a discount from small businesses and resells them abroad.

Established small businesses

companies that have been in business for at least five years and employ at least 1, but less than 50 employees.

bootstrapping

funding the operations on your own resources

equity

funds raised through the sale of stock

an entrepreneurs personality

-Ambitious. -Independent. -Self-confident. -Risk takers. -Visionary. -Creative. -Energetic. -Passionate. -Commited.

outside consultants for a small business

1)CPA 2)attorney for a small business. 3)outside directors with business experience

he person who takes the risk of starting and managing a business to make a profit is called a(n): A. entrepreneur B. venture capitalist C. capitalistic adventurer D. franchiser E. ultra capitalist

A. entrepreneur

A _____ is a formal written statement that describes in detail the idea for a new business and how it will be carried out. A. mission statement B. vision C. business plan D. statement of purpose E. venture plan

A. mission statement

Certified Public Accountant (CPA)

An individual who has met certain criteria and is thus allowed to perform audits of corporations.

When he read Chicken Soup From the Soul, Joe Farmer was struck by how many of the stories mentioned the scent of the islands. So Farmer created bottles filled with Hawaiian air and some scented essence beads. When customers shake the bottles up and open the lids, they're transported back to paradise. While many marketing experts did not think that consumers would buy bottles of air, Farmer has earned more than half a million dollars of sale during his first year of operation. Farmer was an example of a _____ entrepreneur. A. growth-oriented B. classic C. opportunistic D. risk-aversive E. debt-based

B. classic

Privately owned and managed _____ are licensed by the SBA and provide long-term financing for small businesses. A. Small Business Development Centers B. Service Corps of Retired Executives C. Small Business Investment Companies D. Angel Capital Electronic Networks E. Active Corps of Executives

C. Small Business Investment Companies

The difference between the small business owner and the entrepreneur is that the entrepreneur: A. manages the business B. files taxes for the business C. assumes the risk of the business D. is responsible for the profits of the business E. is accurately described by all of the above

C. assumes the risk of the business

Gord Larose and his friend David Allan worked in Ottawa at Nortel Networks, a giant telecommunications-equipment maker. One Friday afternoon, over a few beers in Larose's kitchen, they dreamed up a scheme for renting software over the Internet. Instead of quitting their jobs, they reported to work on Monday, explained their plan to their boss, and began working to make their idea a reality. Four years later, their idea has evolved into an important division of Nortel called Channelware. Larose and Allan are examples of: A. interpreneurs B. multipreneurs C. intrapreneurs D. growth-oriented entrepreneurs E. Insourced entrepreneurs

C. intrapreneurs

International trade specialists that buy goods at a discount from small businesses and resell them abroad are called: A. business trade unions B. export management companies C. domestic channel members D. commission house brokers E. export trading companies

D. commission house brokers

Which of the following is a reason why small business thrives in the United States? A. guaranteed profits B. regular working hours C. an aversion to success D. the ability to avoid outsourcing E. rapidly changing technology

D. the ability to avoid outsourcing

Hannah Li wants to quit her job as a legal secretary and start her own small business. She knows that she will be successful if she can find the right idea. Where can Li look for ideas for her new business? A. Problems she noticed in her old job B. Her interest in the history of Asian art C. Suggestions from her family D. Other businesses in other regions of the country E. All of the above

E. All of the above

Michael Bronner made a fortune in the direct marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. His newest venture, Upromise Inc., enlists some of America's largest corporations to help families pay for college and is extremely successful. Entrepreneur Bonner would more than likely have which of the following characteristics? A. Ambitious B. Independent C. Self-confident D. Visionary E. All of the above

E. All of the above

A well-written business plan should contain: A. executive summary or company overview B. a marketing plan C. a vision and mission statement D. a management plan E. all of the above

E. all of the above

When Allison Logue found out her children were allergic to corn, she started looking for sweets and starches that were corn-free and was dismayed to find very few such products on the market. As a result, she has started her own small business to produce and market corn-free desserts. It is a small market, and Logue plans to keep her business small. Logue is an example of a(n): A. interpreneur B. multipreneur C. intrapreneur D. growth entrepreneur E. micropreneur

E. micropreneur

business plan

a formal written document that describes the nature of a business and how it will operate; can run various 'what-if' analysis and evaluates the business without any financial outlay or risk.

One of the reasons why there has been a dramatic increase in the number of small business startups is rapidly changing technology. a. True b. False

a. True

The most common use of a business plan is to persuade lenders and investors to finance the venture. a. True b. False

a. True

minority business development agency

agency which coordinates federal and private efforts to help businesses owned by minorities.

New Markets Venture Capital Program

program promoting economic development and job opportunities in low income geographic areas

small-business owner

someone who started a business or bought one with the intent of it staying small.

Entrepreneur

someone who takes a risk either to create a new business or change the scope of an existing one;innovators who start companies to pursue their ideas for a new product or service

annual survey of entrepreneurs

survey providing annual data on select economic and demographic characteristics of employer businesses and their owners by gender, ethnicity, race, and veteran status.