MNG Ch. 6

IndieGoGo, Kickstarter, and GoFundMe are all examples of crowdfunding platforms.

true

Only about _____ percent of women-owned businesses have employees. a. 2 b. 5 c. 10 d. 15 e. 20

10

The U.S. Census Bureau's Survey of Business Owners shows that the number of minority-owned companies in the United States was __________ in 2012. a. 5.8 million b. 1.3 billion c. 872,000 d. 8 million e. 2.9 million

5.8 million

A successful business plan should be no more than: a. 5 paragraphs. b. 2 pages. c. 10 pages. d. 50 pages. e. 100 pages.

50 pages

The U.S. Small Business Association (SBA) reports that small firms accounted for _____ percent of net new jobs created between 1993 and 2011. a. 30 b. 32 c. 46 d. 64 e. 82

64

Small businesses represent _____ percent of U.S. exporters. a. 87 b. 22 c. 98 d. 54 e. 72

72

Most entrepreneurs use their own savings as the primary source of initial funding.

true

Which of the following is the process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards? a. Intrapreneurship b. Entrepreneurship c. Small business administration d. Venture capital e. Equity financing

Entrepreneurship

__________ consists of funds that are invested in exchange for ownership in the company.

Equity financing

In 2012, which of the following countries had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business? a. China b. Ecuador c. Senegal d. Thailand e. Dominican Republic

Senegal

Which of the following is not a typical source of equity financing? a. Venture capitalists b. Crowdfunding c. Business incubators d. Angel financing e. All of these are sources of equity financing.

business incubators

A(n) __________ provides shared office space, management support services, and management and legal advice to entrepreneurs.

business incubator

A(n) __________ is a document specifying the business details prepared by an entrepreneur prior to opening a new business.

business plan

A(n) __________ is an open office environment that is shared by multiple freelance entrepreneurs as well as corporate telecommuting employees or others who don't have a regular office.

co-working facility

A(n) __________ is an artificial entity created by the state and existing apart from its owners.

corporation

__________ is a way of raising capital by receiving small amounts of money from a large number of investors, usually through social media and the Internet.

crowdfunding

A(n) __________ is an artificial entity created by the state and existing apart from its owners.

debt financing

__________ is an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.

franchising

A person's __________ defines whether he or she places the primary responsibility within the self or on outside forces.

locus of contrrol

The __________ means that entrepreneurs are motivated to excel and pick situations in which success is likely.

need to achieve

A(n) __________ is an unincorporated business owned by two or more people.

partnership

To __________ means to change the strategic direction of the business.

pivot

A(n) __________ is an entrepreneurial leader who is committed to both good business and changing the world for the better.

social entrepreneur

__________ focuses primarily on creating social value by providing solutions to social problems, with a secondary purpose of generating profit and returns.

social entrepreneurship

An unincorporated business owned by an individual for profit is known as a(n) __________.

sole propietorship

A(n) __________ is a group of companies or individuals that invest money in new or expanding businesses for ownership and potential profits.

venture capital firms

People who believe that outside forces determine what happens to them have a high internal locus of control.

false

Since a corporation is a legal structure reserved for large firms, small businesses have two basic choices for legal structure of their company: proprietorship and partnership.

false

Social entrepreneurs are leaders who are committed to both good business and ensuring high profitability.

false

The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur's own way.

false

Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners.

fasle

Two principle advantages of forming a corporation are continuity and limits on the owners' liability.

true

When pursuing an entrepreneurial dream, there are steps you must take to make the dream a reality. Think of some type of business you might like to start, and write a short essay that outlines the steps you would take when planning to become a business owner. Prepare a sample business plan along with your essay.

Step 1. Match a personal skill with a marketplace need. Step 2. Write a business plan that reflects that you have thought through potential issues and problems. Step 3. Choose a legal structure (sole proprietorship, partnership, or corporation). Step 4. Get funding (debt financing or equity financing).

A new corporate structure known as a benefit corporation has been established for minority-owned and women-owned businesses.

false

All entrepreneurs are motivated by building larger, more profitable businesses.

false

Entrepreneurs see themselves as being less in control of their environment, generally speaking, and can be expected to have an external locus of control.

false

Entrepreneurs who aspire to start an online or mobile business must follow different, more rigorous steps than is required to start a traditional business.

false

Globally, entrepreneurship has experienced a tremendous boost due to larger numbers of college graduates and the rapid expansion of the upper class in countries such as China and India.

false

One of the biggest mistakes that new entrepreneurs is in not knowing when to pivot, which means knowing when to abandon a failing business.

false

Optimizers are rewarded by the chance to work on something that is new, creative, or personally meaningful.

false

Women have historically started fewer businesses than men, and the gap is widening.

false

sole proprietorship is an unincorporated business owned by two or more people.

false

One area of great growth and opportunity for women-owned businesses is: a. expanding globally. b. volunteering as consultants for the Small Business Administration (SBA). c. filing patents for the products they produce. d. starting technology firms. e. hiring employees to work for the company.

hiring employees to work for the company

Tracy's Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes exemplifies which of the categories of small-business owners? a. Optimizers b. Idealists c. Hard workers d. Sustainers e. Jugglers

idealists

Which of the following is the most cited source of new business ideas? a. Brainstorming b. In-depth understanding of industry or profession c. A hobby d. Copying someone else e. Finding a market niche

in-depth understanding of industry or profession

Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur? a. Idealist b. Sustainer c. Optimizer d. Juggler e. Hard worker

sustainer

If a small-business owner enjoys the chance to balance work and personal life, he would be considered a(n): a. idealist. b. optimizer. c. hard worker. d. juggler. e. sustainer.

suustainer

Which of the following is not an appropriate legal structure for an entrepreneurial company? a. Proprietorship b. Corporation c. Partnership d. Trade alliance e. All of these are appropriate legal structures for an entrepreneurial company.

trade alliance

The most common source of new business ideas comes from in-depth understanding of an industry or profession.

trrue

A document specifying the business details prepared by an entrepreneur prior to opening a new business is known as a business plan.

true

A domain name gives a company an address on the Web and a unique identity.

true

A need to achieve is a psychological characteristic that means people are motivated to excel and pick situations in which success is likely.

true

A venture capital firm is a group of companies or individuals that invest money in new or expanding businesses for ownership and potential profits.

true

An attractive option for entrepreneurs who want to start a business from scratch is to join a business incubator.

true

Borrowing from family and friends is a common source of debt financing for a start-up business.

true

Entrepreneurs are able to stay positive after long periods of sacrifice or struggle.

true

Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners.

true

Entrepreneurs in the sustainer category like the chance to balance work and personal life and often don't want the business to grow too large.

true

Equity financing consists of funds that are invested in exchange for ownership in the company.

true

Immigrants are more likely to start small businesses than native-born Americans.

true

In the United States, entrepreneurship and small business are the engines for job creation and innovation.

true

Research indicates that the age of a company, more so than its size, determines the number of jobs that it creates.

true

Sole proprietorships are one of the fastest-growing segments of small business in both the United States and Canada.

true

The Small Business Administration (SBA) can provide loan financing for small business start-ups.

true

The U.S. Census Bureau's Survey of Business Owners shows that the number of minority-owned companies in the United States increased from 5.8 million firms in 2007 to 8 million in 2012.

true

The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing

true

The first step in pursuing an entrepreneurial dream is to come up with a viable idea.

true

The powerful advantage of a franchise is that management help is provided by the franchisor

true

The process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards refers to entrepreneurship.

true

To succeed in the competitive online market, the entrepreneur needs to identify a market niche that isn't being served by other companies.

true

Max is the Web site manager for a local florist. The company's owner would like Max to redesign the Web site so that customers can connect directly with florist employees on a daily basis about products and specials. This relates to which step in establishing an online business? a. Finding a niche market b. Knowing when to pivot c. Choosing a target market d. Choosing a domain name e. Using social media

using social media

Which of the following statements regarding partnerships is true? a. When forming a partnership, a formal partnership agreement should be drawn up with the help of an attorney. b. Unlike other forms of ownership, a partnership has a legal life of its own. c. A disadvantage of a partnership is the limited liability of the partners. d. A partnership is an incorporated business owned by two or more people. e. Partnerships often dissolve within two years.

when forming a partnership, a formal partnership agreement should be drawn w/ the help of an attorney

While many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing. 1. With the entrepreneurial personality, Holly can be expected to have all of the following traits except: a. an internal locus of control. b. a desire for autonomy. c. a strong need to achieve. d. patience. e. self-confidence. 2. After fully developing their new business idea, Holly and Trent recognize the need to develop a business plan. Typical business plans will include all of the following except: a. a clear, compelling vision of the company. b. information about competitors. c. sources of start-up funds. d. an analysis of critical risks that may threaten success. e. a description of the company's contingency plans. 3. If the business is legally Holly's and she assumes unlimited liability, then the business form would be: a. a sole proprietorship. b. a partnership. c. a corporation. d. a chapter S42.5. e. none of these.

1. patience 2. a description of the company's contingency plans 3. sole proprietorship

A business plan for a small business should be detailed, encompassing at least 100 pages.

false

Ginger likes to set her own goals, which are moderately difficult. Which of the entrepreneurial characteristics does she probably possess? a. A high need for achievement b. A high need for power c. An external locus of control d. An inability to deal with uncertainty e. Intolerance for ambiguity

a high need for achievement

Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1,500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as: a. a proprietorship. b. a partnership. c. a trade alliance. d. a corporation. e. none of these.

a partnership

A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as: a. an equity financing firm. b. franchisors. c. a venture capital firm. d. debt financing firm. e. none of these.

a venture capital firm

Research indicates that the __________ of a company, more so than its __________, determines the number of jobs that it creates. a. age; quality of leadership b. age; size c. location; size d. location; age e. size; age

age; size

. Entrepreneurs who aspire to start an online or mobile business: a. follow the usual steps required to start a traditional business. b. should be savvy with technology. c. need to be unusually nimble. d. must know when to pivot. e. all of these.

all of these

The percentage of loans provided by the Small Business Administration (SBA) to __________ has increased significantly in recent years. a. women b. African Americans c. Asian Americans d. Hispanics e. all of these

all of these

Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as: a. an entrepreneurship. b. an intrapreneurship. c. franchising. d. a business plan. e. a partnership.

an entrepreneuship

All of the following are entrepreneurial characteristics except: a. self-confidence. b. autonomy. c. an external locus of control. d. high energy. e. entrepreneurial sacrifice.

an external locus of control

__________ reflects an entrepreneur's desire to make their own decisions about their business. a. ​Self-confidence b. An internal locus of control c. High energy d. ​Autonomy e. Entrepreneurial sacrifice

autonomy

Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as a: a. SWOT analysis. b. business portfolio. c. business plan. d. competitive analysis. e. mission statement.

business plan

An advantage of __________ is that there is a shorter start-up time and an existing track record. a. participating in a business incubator b. starting a new business c. buying a franchise d. buying an existing business e. debt financing

buying an existing business

Social entrepreneurs are committed to both good business and: a. swaying political opinion of consumers. b. improving the natural environment. c. changing the world for the better. d. nonprofit goals. e. big profits.

changing the world for the better

A recent alternative to a traditional business incubator is a __________, which is an open office environment that is shared by multiple freelance entrepreneurs as well as corporate telecommuting employees or others who don't have a regular office. a. virtual incubator b. co-working facility c. mentoring group d. start-up accelerator e. networking meet-up

co-working facility

What are the two principal advantages of forming a corporation? a. Unlimited liability and potential conflicts with partners b. Freedom from debt and relatively simple structure c. Continuity and limits on owners' liability d. Unlimited liability and continuity e. Continuity and nontax structure

continuity and limits on owners' liability

A(n) __________ has a legal life of its own. a. partnership b. sole proprietorship c. corporation d. association e. trade alliance

corporation

An artificial entity created by the state and existing apart from its owners is known as a(n): a. partnership. b. proprietorship. c. corporation. d. association. e. trade alliance.

corporation

Which of the following is not a form of debt financing? a. A loan from the Small Business Administration (SBA) b. Crowdfunding c. Personal credit cards d. A bank loan e. Borrowing from family and friends

crowdfunding

__________ refers to borrowing money that has to be repaid at a later date to start a business. a. Venture capital b. Debt financing c. Equity financing d. Franchising e. Angel financing

debt financing

Entrepreneurs who aspire to start online businesses should implement all the following steps except: a. create a professional Web site. b. choose a domain name. c. use social media. d. determine physical location. e. find a market niche.

determine physical location

A drawback of a sole proprietorship is: a. the unlimited liability of the partners. b. conflicts with partners. c. its continued existence regardless of whether the owner lives or dies. d. difficulty in obtaining financing. e. the complexity and cost to keep the records required by law.

difficult in obtaining financing

A(n) __________ recognizes a viable idea for a new product or service and carries it out by finding and assembling the necessary resources to start the business.

entrepreneur

Melissa is a very good middle manager. However, she has a dream of starting her own business. She is willing to give up all of her free time and weekends in order to get her business started. This illustrates Melissa's: a. high self-confidence. b. entrepreneurial sacrifice. c. internal locus of control. d. autonomy. e. need to achieve.

entrepreneurial sacrifice

A(n) __________ is someone who recognizes a viable idea for a business product or service and carries it out by finding and assembling the necessary resources to undertake the business venture. a. intrapreneur b. entrepreneur c. manager d. leader e. optimizer

entrepreneuship

The process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards is known as __________.

entrepreneuship

__________ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner. a. Franchising b. Business incubation c. Spinning-off d. Globalization e. Right offerings

franchising

Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. She has a strong work ethic and often works more than 60 hours a week. These examples most closely relate to which characteristic of entrepreneurs? a. Need to achieve b. Patience c. Tolerance for ambiguity d. High energy e. Self-confidence

high energy

Entrepreneurs in the __________ category like the idea of working on something that is new, creative, or personally meaningful.

idealist

Which of the following statements about a business incubator is true? a. It gives up control since every business is run the same way. b. It typically provides shared office space, management support services, and management legal advice. c. It develops an international business. d. It provides an established name and advertising. e. It pre-sells products or offers products or services in exchange for funds.

it typically provides shared office space, management support services, and management legal advice

In the United States, entrepreneurship and small business are the engines behind __________ and __________. a. job creation; competition b. innovation; competition c. competition; investment d. job creation; innovation e. innovation; investment

job creation; innovation

The most common reason for becoming an entrepreneur is: a. joining the family business. b. to control one's future. c. to be one's own boss. d. to fulfill a dream. e. the result of being laid off.

joining the family business

Which of the following are high-energy people who like the chance that a small business gives them to handle everything themselves? a. Jugglers b. Idealists c. Sustainers d. Optimizers e. Hard workers

jugglers

All of the following are common reasons why small-business ventures fail except: a. sloppy accounting. b. fear of firing. c. poor management. d. long-term focus. e. operational mediocrity.

long-term focus

Which of the following means that people are motivated to excel and pick situations in which success is likely? a. External locus of control b. Tolerance for ambiguity c. Awareness of passing time d. Internal locus of control e. Need to achieve

need to achieve

Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business owner did Wendy use? a. Equity financing b. New business start-up c. Buying an existing business d. Buying a franchise e. Merger and acquisition

new business start-up

Over the past two decades, most new jobs have come from: a. established small businesses. b. new companies. c. franchises. d. established multinational corporations. e. women-owned businesses.

new companies

Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which characteristic of entrepreneurs? a. Need to achieve b. Patience c. Tolerance for ambiguity d. High energy e. Self-confidence

self-confidence

What is the most common way that entrepreneurs finance the start-up of a new business? a. Self-financing from savings or credit cards b. Loans from friends, family, or business associates c. Bank loans d. Lines of credit e. Venture capital

self-financing from savings or credit cards

__________ entrepreneurship combines the creativity, business smarts, passion, and work of the traditional entrepreneur with a social mission. a. Contemporary b. Nascent c. Modern-day d. Social e. Conventional

social

Vaughn Hager started his one-man consulting business under the name Hager Associates. He likes that he does not have to consult anyone else when making decisions. The legal structure for the company can best be described as a(n): a. sole proprietorship. b. partnership. c. trade alliance. d. corporation. e. one-man operation.

sole proprietorship

Which of the following is a popular small-business form because it is easy to start and has few legal requirements? a. Partnership b. Sole proprietorship c. Corporation d. Association e. Trade alliance

sole proprietorship

Which of the following refers to an unincorporated business owned by an individual for profit? a. Partnership b. Sole proprietorship c. Corporation d. Association e. Trade alliance

sole proprietorship

According to the Global Entrepreneurship Monitor (GEM) 2015-2016 Global Report, women showed entrepreneurial rates equal to or higher than those of men in all of the following countries except: a. Thailand. b. South Africa. c. Vietnam. d. Peru. e. Malaysia.

south africa

Which of the following was one of the top 10 fastest-growing franchises in 2015? a. Arby's b. Krispy Kreme c. Subway d. Wendy's e. Dairy Queen

subway