Small Bus & Entrep- Smartbook 1 &2

Which of the following are correct regarding the characteristics of large businesses?

-They have greater excess resources. -Knowledge is widely dispersed throughout the business. -No one person is critical to the business's survival.

Which of the following statements regarding entrepreneurial businesses are correct?

-They have limited flexibility in responding to emergency issues such as the need to hire replacements if the company loses key individuals. -They are generally dependent on a single person or a few individuals.

______ are often for only a few dollars each and are made directly to entrepreneurs to encourage self-development in developing nations.

Microloans

According to the text, which of the following is an important driver of the economic success of a community?

New business development

Identify a true statement about the circumstantial motivators for starting a business.

They tend to result in more of a defensive positioning than do personal motivations.

Personality tests should help you better understand yourself and your strengths and not be used as a guide for your _____

career

Along with being properly financed and developing sustainable profit margins, in order to be successful, entrepreneurs must:

develop an effective sales generation model.

Economies of scale is the condition that allows the long-run average cost to continue _______ as production _______.

downward; increases

Large firms can sometimes do things more efficiently because of their ability to operate on a larger scale than can a small firm. This implies that large firms obtain ______ in some industries.

economies of scale

Silicon Valley and Boston's 128 corridor are well known for:

-generating new employment with entrepreneurial ventures. -providing a basis to the area's economic vitality. -providing a growing tax revenue base.

To fully utilize family resources, entrepreneurs should _____.

-make a list of members that they have regular contact with -list the capabilities those individuals possess that might be helpful

A harvest plan may include:

-participating in a public offering of stock. -selling it to a group of investors. -selling the business to another firm.

The United States Small Business Administration was organized to:

-provide assistance at all levels of management for entrepreneurial businesses. -provide information at all levels of organizational development for entrepreneurial businesses. -aid, counsel, and protect the interests of small businesses.

The Enneagram's nine personality types include which of the following?

Helper Reformer Achiever

Thomas Stanley and William Danko, in their book The Millionaire Next Door, state that 75 percent of self-employed millionaires are _____.

entrepreneurs

According to the World Bank, the presence of entrepreneurial small- and medium-sized enterprises is one of the strongest factors in the growth of any nation's ______.

gross national product

A(n) _____ plan is a plan to exit the business that allows the investors to take advantage of growth.

harvest

A business _____ is a facility that houses new businesses and provides many critical services.

incubator

If one has a low risk tolerance, one is likely to spend ____ and save ____.

less; more

The founders of an entrepreneurial business and the leadership they provide play ______ of a critical role in the business's success than senior leadership does in a typical large organization.

more

Women of color account for ______ of businesses headed by women.

one-third

The business plan for a new entrepreneurial business is developed to serve as a guide to manage the business, to provide potential investors with critical information to evaluate the business, and to:

provide a self-evaluation

The World Bank estimates that one of the strongest factors in the growth of any nation's GNP is the presence of entrepreneurial _____ enterprises.

small- and medium-sized

Individuals or other organizations that may impact the success of a business and depend on the success of the business for their own livelihood are known as ______.

stakeholders

Entrepreneurs should work with family members for their advice, potential funding, reality check, and _____ structure.

support

The first category of start-up businesses are those formed as high-growth, often high-tech, ventures and are referred to as ______

venture capital-backed firms

People should start a business that they _____.

will enjoy

A difference between entrepreneurial businesses and venture capital-backed firms is that _____.

entrepreneurial businesses' resources are more constrained than those of venture capital-backed businesses

Entrepreneurs need to ensure they have sufficient _____ resources prior to starting a business.

financial

Small Business Development Assistance Centers provide _____.

free advice to new businesses

A business plan for a small business typically runs _____ pages long.

from 15 to 25

Personality tests can _____.

help one better understand one's traits and tendencies

The process of ______ a new business is unique and has developed into a popular area of study at colleges around the globe.

running initiating developing

The Fortune 500 is published annually by Fortune magazine and documents the 500 largest corporations (by ______) in the United States?

sales

Large firms can obtain economies of _____ in some industries because of their ability to operate on a larger scale than a small firm. (Enter one word in the blank.)

scale

By providing resources that new businesses cannot otherwise afford on their own, incubators can help these businesses establish _____.

some level of legitimacy

An entrepreneur's support and resources are typically _____ to the individual and the location.

unique

Which of the following are typical triggers for starting a business?

-Being laid off from a job -Being approached by friends or family with a new business idea -Reaching a point financially where the risk-return level of a proposed new business is tolerable

Which of the following statements about incubators are correct?

-They provide common receptionists to new businesses. -They provide many critical services to new businesses. -They provide office machines and basic furniture to new businesses.

Which of the following are goals of the business plan for a new entrepreneurial business?

-To be a guide to managing the business -To provide self-evaluation -To provide investors with necessary information

_____ is a managerial theory that believes individuals act to maximize their own benefit.

Agency theory

_____ _____ is rational decision making that is constrained by the background and history of the person making the decision.

Bounded rationality

Which periodical is published annually and documents the 500 largest corporations by sales in the United States?

Fortune

Online communities such as blogs and chat rooms can provide _____ to people starting a business.

advice, support, funding, or resources

The fact that Walmart can buy its advertising much cheaper on a per-unit basis than a small retailer is an example of ________.

economies of scale

Civic leaders often look to ______ as a means to promote economic strength for a community, region, or state.

entrepreneurs

The success of entrepreneurial businesses occurs because they are simply more _____ than their larger corporate counterparts.

focused

The _____ ceiling refers to the fact that women and minorities may be hired by large firms but they experience limits placed on their advancement within the firm.

glass

Unlike the business plan of a venture capital-backed business, the entrepreneurial business plan is developed as a _____.

guide for the running of the business

Individuals from outside an industry are able to establish a new business in a manner not previously considered because they _____.

have bounded rationality

The greater the debt an entrepreneur is willing to take on to start the business, the _____ his or her risk tolerance.

higher

Students need to consider their own resources and abilities early when they think about starting an entrepreneurial business because of the _____.

importance of an owner to a new business

People in an entrepreneur's network can help by providing ______ to a new business.

legitimacy

Excess resources in an organization that allow for redundancy and the quick deployment of personnel in crisis are referred to as _____ _____. (Enter one word in each blank.)

organizational slack

The third element of entrepreneurial orientation is an examination of your own:

personality

The triggers for starting a business can come from either _____ or negative stimuli that occur in the individual's life.

positive

A personality test can help one _____.

select the type of business to start

In their book entitled The Millionaire Next Door, Thomas Stanley and William Danko point out that almost two-thirds of U.S. millionaires are _____.

self-employed

According to the 2019 statistics from the United States Small Business Administration, 99.9 percent of all businesses in the United States are:

small

In the context of businesses listed in Fortune 500, Henry Ford (Ford Motor Company), Steve Jobs (Apple), Ralph Lauren (fashion), and Sam Walton (Walmart) all started out as _____.

small-business owners

Identify the guidelines that should be ideally followed by entrepreneurs to create business plans for new entrepreneurial businesses.

-An entrepreneur should create an attractive, one-page pitch about the business while developing the business plan. -An entrepreneur should understand that a business plan should be created in pieces with each piece fitting into a whole picture.

The Big Five test comprises which of the following factors?

-Extroversion -Emotional stability -Open-mindedness

When was the initial development of the large industrial base of the United States?

1880s

A venture capital-backed business plan typically runs from _____ pages long.

25-45

The European Union considers any business with fewer than _____ employees to be a small business.

50

The U.S. government considers any business with fewer than _____ employees to be a small business.

500

The repayment rate on microloans is typically ______.

99%

What program is growing across the United States to help start new entrepreneurial businesses in an area?

Economic Gardening

The underlying philosophy of the ______ test is that people are a result of all the experiences of their life.

Enneagram

Every business in the Fortune 500 started out as a large corporation.

False

Men are the largest single group of new business founders.

False

Robber barons were responsible for the collapse of small businesses in the 1880s.

False

The Great Depression of the 1930s was harder on larger more mature businesses than on entrepreneurial businesses.

False

Unlike entrepreneurial businesses, large organizations will regularly pursue smaller markets even if they do not believe the results will generate profits.

False

Identify a finding of the federal General Accounting Office's (GAO's) analysis of the impact of the closure of military bases.

In cities with base closings, several new businesses rose up to fill the economic gap that had resulted from the closings.

Which of the following statements is true regarding the Great Depression of the 1930s?

It encouraged industrial concentration.

Identify a true statement about organizational slack.

It provides large organizations with flexibility that is unavailable to the typical entrepreneurial venture.

_____ motivations come from the individuals themselves.

Personal

Who is associated not only with the success of the industrial base but also with the great abuses in business?

Robber barons

_____ include key suppliers, customers, and employees. These individuals are critical to the success of a business.

Stakeholders

What is the most important single factor in the business's success?

The business owner

Which of the following is a big advantage of starting one's own business?

The business owner can be the boss.

Which of the following often leads young people to be pioneers in an area as they are not limited by the restrictions of the past?

The presence of bounded rationality

Which of the following statements is directly associated with the circumstantial motivators for starting a business?

The staying power of an opportunistic start-up is mainly determined by other competing opportunities.

Which of the following is true of entrepreneurial firms?

The structure of management is designed to take advantage of the skills of the founder or founders of a firm.

Identify a characteristic of venture capital start-ups.

They are inherently risky operations whose growth is dependent on the exploitation of unknowns in the market.

Which of the following statements is true of venture capital start-ups?

They are often formed as high-tech ventures consisting of unique characteristics.

An entrepreneur's prior experience places boundaries on what he or she will consider when making decisions.

True

An entrepreneur's risk tolerance, prior experience, and personality orientation shape their analysis of a business idea's potential.

True

It is likely for an entrepreneur to spend more time starting and running the business than doing anything else in life.

True

Small businesses have greater flexibility in responding to changes that take place in their external environment.

True

Starting a new business may allow individuals to meet demands in their lives in a way that large corporations are unwilling to do.

True

The Myers-Briggs test is one of the most widely used personality tests.

True

The high level of family commitment is a key reason why family businesses are able to survive and prosper.

True

The one-page pitch created by a new entrepreneur while developing a business plan should offer an effective starting point for every potential supplier, employee, or investor.

True

When a firm reaches its break-even point, the revenues are ______ its expenses.

equal to

Large businesses often have _____.

extensive written procedures

Entrepreneurs need to consider both the benefits and drawbacks to hiring _____ members.

family

New business owners need to be sure that the level of risk is consistent with their ______, ______, and ______.

family situation values background

The process of business development from scratch and the process followed by established businesses are ______.

quite different

Entrepreneurs need to have a(n) ______ vision of what resources are necessary in order to be successful.

realistic

Potential entrepreneurs must understand their level of tolerance to _____.

risk

The greatest advantage of an entrepreneurial business is that it is owned and run by _____.

the same person(s)

Entrepreneurs' prior experience plays a role in new business creation through _____.

their view of the world

Starting a business is often the result of an event or condition within an individual's environment called a(n) _____.

trigger

Which of the following statements are true regarding robber barons?

-They took advantage of the economies of scale. -They were responsible for some of the great abuses in business. -They dominated the industrial sectors.

Match the types of firms (in the left column) with their descriptions (in the right column).

An entrepreneurial business-It is owned and run by the same person(s). A large, established corporation-The individuals who manage do not typically have substantial ownership in the company.

Which of the following is NOT one of the three types of specific risks?

Network

Identify the typical triggers for starting a business.

-Being spurred to action by attending a seminar, reading a book, or talking with successful entrepreneurs -Experiencing the inability to climb the corporate ladder due to circumstances -Receiving evidence that an idea is not only doable, but there is a concrete way to improve on a given problem

Identify the findings of the federal General Accounting Office's (GAO's) analysis of the impact of the closure of military bases.

-Cities with base closings offered tax breaks and programs to support new business development. -In cities with base closings, the areas around the bases had income growth higher than the national average.

Which of the following need to be evaluated in order to provide potential investors with the critical information required when developing a business plan for a new entrepreneurial business?

-Competitive advantage -Management team -Cash flow

What are the critical elements that an entrepreneur must solve for success?

-Develop an ability to generate consistent and growing sales -Sufficient resources to get the business to a point where it is self-funding -Sustainable operating profit margin

Which of the following are ways entrepreneurial businesses can act as catalysts for societal change?

-Entrepreneurial businesses have an understanding of the local community. -Entrepreneurial businesses are willing to pursue smaller markets ignored by large corporations.

Which of the following statements regarding personal motivations are correct?

-Entrepreneurs who are driven by personal motivators are often more proactive. -Entrepreneurs who are driven by personal motivators more relentlessly pursue their goals. -Entrepreneurs who are driven by personal motivators often make career and life-altering changes regardless of practical advice.

Which of the following statements about family members are true?

-Family members are likely to serve as a reality check and support structure. -Family members are likely to be willing to contribute time and money to the new business. -Family members best know one's abilities and shortcomings.

Which of the following are benefits of family-owned businesses?

-Family members may be willing to work extra hours during holidays. -Family members help the entrepreneur overcome many difficulties that may cause failure. -Family members may be willing to take only a partial or no salary during difficult times.

Which of the following are potential negative issues related to owning and operating a family-based business?

-Family members may bring non-work issues to the business. -Family members may take advantage of their personal relationship with the owner. -Family members may be more difficult to reprimand or fire.

Which of the following are supports that entrepreneurs rely on?

-Financial resources -Social networks -Family

Which of the following groups might be included in an entrepreneur's key support network?

-Former employers -Friends from school

Which of the following are reasons why entrepreneurial businesses are successful?

-Free to place energy into satisfying the needs of customers -Fewer layers of management -Tend to be more focused than large corporations

Which of the following are reasons for the recent growth in the number of women starting new businesses?

-Frustration with the glass ceiling -Greater control over work-life balance

Identify the reasons individuals can become frustrated with working in a large corporation.

-Inflexibility of large corporations in dealing with the needs of an individual's family and children -Lack of promotion opportunities

Which of the following are pairs of variables in the Myers-Briggs test?

-Judgment-perception -Extroversion-introversion -Sensing-intuiting

Identify the websites that help a company reach out to a wide community online to get funding and often advice in the process of raising those funds.

-Kickstarter.com -Crowdfunder.com

Which of the following statements about agency theory are correct?

-Managers are considered agents. -Owners always act to maximize the value of the business. -Agents often maximize their own benefit.

Which of the following are components of the entrepreneurial orientation concept?

-Personality orientation -Risk tolerance -Prior experience

Which of the following are advantages that small, new businesses have?

-Small businesses fill niches that large firms simply cannot afford to fill. -Small businesses are owned and run by the same person(s). -Small businesses can respond quickly to opportunities or threats as they arise.

Which of the following statements about the Big Five test are true?

-The five factors emerged from the researchers' analysis of the data. -It was developed by two independent research teams. -The researchers surveyed thousands of individuals.

Which of the following descriptions are characteristics of entrepreneurial firms?

-The start-up is self-funded or closely funded. -The operation is designed in the image of the founder. -The number of employees will not be expected to grow beyond 100.

Which of the following are reasons why owners are a great asset to a new business?

-Their dedication -Their personal involvement

Which of the following are characteristics of venture capital-backed firms?

-They are formed with a harvest plan in place. -They have a developed organizational structure. -They either start or grow quickly to employ a relatively large number of employees.

Which of the following statements regarding Small Business Assistance Centers are correct?

-They are funded by the Small Business Administration. -They provide a wide variety of support such as research aids. -They are often associated with SCORE offices.

Which of the following statements about women entrepreneurs are true?

-They often run into a "glass ceiling." -They are one of the fastest-growing segments of entrepreneurs. -They start up businesses at a rate of 50 percent more than men.

_____-_____ point is when a business has reached a level where the revenue coming into the firm is sufficient to cover its expenses.

break-even

Cash flow, management team, and competitive advantage are key criteria presented in the ______ plan that provide essential information to potential investors.

business

It is much cheaper on a per-unit basis for Anheuser-Busch to produce large volumes of beer than it is for a small craft beer brewer to produce smaller volumes of beer. Anheuser-Busch has achieved _____ of scale.

economics

What is the condition that allows the long-run average cost to continue downward as production increases?

economics of scale