ent final
the repayment rate on microloans is typically BLANK%
99%
what is included in the second column of the chart used in the gap analysis?
categories of analysis
synergy
connection between the entrepreneur's skill, understanding of an industry, and the ability to create a competitive advantage such that the sum of the parts of the new business is greater than the individual parts alone
successful business ideas are determined by BLANK
creativity
personality tests can BLANK
help one better understand one's traits and tendencies
big five test
open mindedness, conscientiousness, agreeableness, emotional stability, and extroversion
what is crowdfunding
relatively new means of raising capital that may result in either an equity approach or an in-kind exchange of the firm
break even point
revenues equal expenses
which act officially organized the United States Small Business Administration (SBA)?
small business act
what did henry ford, steve jobs, ralph lauren, and sam walton start out as
small business owners
characteristic of venture capital start-ups
they are inherently risky operations whose growth is dependent on the exploitation of unknowns in the market
the business owner whose business is both a(n) BLANK and a(n) BLANK is difficult to beat
vocation; avocation
economies of scale example
walmart can buy advertising much cheaper on a per unit basis than a small retailer
insurance regarding liability for workers who are injured on the job
workers' compensatoin
most overlooked sources of skills for a new business
family experiences
the process of generating ideas will result in a list of three to five business ideas that:
-appear to be an opportunity -match the founders' skills
cash flow, management team, and competitive advantage are key criteria presented in the BLANK plan that provide essential information to potential investors
business
what is included in the initial analysis of a business opportunity
-financial investments -time -focus
sources of nonequity capital to start a business
-grants -debt
general partnership
-partners are generally held to be jointly liable for all debts incurred by the partnership
research suggests that successful new business ideas are not determined by your:
-religion -parents -gender -race
which of the following are true regarding skills
-skills are derived from our history -skills are derived from hobbies -skills are relatively idiosyncratic to the individual
common types of debt for a new business
-supplier credit -credit cards -loans
typical categories used to analyze a business idea
-time -non-financial resources -finance -competitors -risk
important driver of the economic success of a community
new business development
motivations that come from the individuals themselves
personal
important elements of a one page pitch for your business
-business model -product offering -customer problem
what needs to be evaluated in order to provide potential investors with critical information required when developing a business plan for a new entrepreneurial business
-cash flow -management team -competitive advantage
closure of military bases in the US
-cities with closings experienced higher income growth -cities with base closings offered tax breaks and programs to support new business development -cities with base closings experienced increases in new businesses
how does support from companies in a network help a new firm
-helps to indicate to others the staying power of the new firm -helps the new firm in obtaining credit
the process of (3 BLANKS) a new business is unique and has developed into a popular area of study at colleges around the globe
-initiating -developing -running
advantages that small, new businesses have
-respond quickly to opportunities or threats as they arise -owned and run by the same person(s) fill niches that large firms cannot afford to fill
issues a new business uses to determine the quality of accounts receivable
-size of the transaction -debtor's credit rating
critical elements that an entrepreneur must solve for success
-sufficient recourses to get the business to a point where it is self-funding -sustainable operating profit margin -develop an ability to generate consistent and growing sales
what are considered sources of debt for starting a new business?
-suppliers -credit cards -banks
important pieces of information that need to be considered be an entrepreneur who seeks to place an advertisement on a job-placement website
-readership and viewership of the website -statistics on reply rates -rates charged for placing the advertisement
in the context of non-financial resources, for gap analysis, which of the following are to be considered for a new business?
-special contacts with suppliers -physical location of the business -special contacts with customers
T or F an entrepreneur's prior experience places boundaries on what he or she will consider when making decisions
TRUE
reasons why entrepreneurial businesses are successful
-free to place energy into satisfying needs of all customers -tend to be more focused than larger corporations -fewer layers of management
advantages of asset leasing for a new business
-the business is able to acquire the assets that it needs to begin operations with a minimal cash outlay -the company isn't stuck with an aging asset as the entrepreneur is able to trade up
it is acceptable for companies to test their job candidates BLANK
is there is a direct link between performance on the test and the skills required for the success on the job
what account should be used when there is an expense too small to write a check for or when a check is simply inappropriate?
petty cash register
what is a disadvantage of factoring for a new business?
the business will not receive the full amount of the debt that is due to it
disadvantage of asset leasing for a new business
the new business may spend more money for the equipment over time than if it had brought the unit outright
categories of accounting ranked from first to last associated with a chart of accounts
(1) income category (2) expense category (3) asset category
SBA centers
-SCORE -provide a wide variety of support such as research aids -funded by the SBA
what are types of corporations developed by the US legal system?
-Subchapter C -LLC Subchapter S
market capitalization established by a public company
-accounts for future earnings and all future prospects that are known today -value of the business as it exists at the present time
hiring process
-advertising for a job description -writing a job description
agency theory
-agents often maximize their own benefit -managers are considered agents -owners always act to maximize the value of the business
the US small business administration
-aid, counsel, and protect the interests of small businesses -provide assistance at all levels of management for entrepreneurial businesses -provide information at all levels of organizational development
small business compensation
-commission -hourly wage -salary
3 basic types of legal business organization
-corporation -sole proprietorship -partnership
websites that help companies reach out to a wide community online to get funding and often advice in the process of raising those funds
-crowdfunder.com -kickstarter.com
alternate sourcing tools for funding a business
-crowdsourcing -crowdfunding
characteristics of venture capital backed firms
-either start or grow quickly to employ a relatively large number of employees -they are formed with a harvest plan in place -they have developed organizational structure
typical triggers for starting a business
-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 -being spurred to action by attending a seminar, reading a book, or talking with successful entrepreneurs
what does the economic gardening program provide in the US?
-financing for the venture -tax incentives -support classes
occupational safety and health administration
-fines are lower for businesses that have fewer than25 employees -small firms with less than 10 employees do not have the record keeping regulations that larger firms have -it has tried to be more lenient toward small businesses
what business would people who don't like to work with others prefer
-internet based business -bookkeeping -oder fulfillment
why do companies invest in a new venture with the idea of ultimately purchasing the venture?
-it helps the companies maintain access to the latest thinking in the field -it is one of the least expensive means for the companies to try out new ideas
three types of specific risks
-market retaliation -financial -strategic
what large firms have been active equity investors in new start-up firms in the technology sector?
-microsoft -cicco -intel
cash flow method of valuation
-net cash flow must be projected for 5 years into the future -a salvage value for the firm must be added
typically targets of grants
-particular industries -economic areas -disadvantaged groups -women-owned businesses -veterans
true statements about a Subchapter C corporation
-profits that are not paid out for such items as salaries are retained for future expansion -it considers the owners as employees and pays them salaries and bonuses
organizational slack true
-provides larger firms flexibility -it is not characteristic of typical entrepreneurial ventures -refers to an excess of resources
accounts payable
-record of payment toward each invoice should be included -the record should include date paid, amount paid, and check number or tracking number -all invoices received should be recorded
a key aspect of how the funding will be used is found in the information provided by the business, and that comes from: (2)
-the accounting system -the data flow management (FUNDING)
benefits of factoring for a new business
-the business doesn't have to spend time and effort trying to collect the accounts receivable -the business gets the money from the accounts receivable immediately
new businesses triggered by circumstance motivators
-the staying power of these businesses is determined by other competing opportunities -they are opportunistic start ups
bonus systems
-they are similar to profit sharing -they are based on the employee's performance -they are not as well defined as profit sharing
robber barons
-they dominated the industrial sectors -they took advantage of the economies of scale -they were responsible for some of the great abuses in business
true statements about women entrepreneurs
-they often run into the glass ceiling -they are one of the fasted growing segments of entrepreneurs -they start up businesses as a rate of 50% more than men
features of circumstance motivators
-they tend to result in more of a defensive positioning -they result from environmental changes
questions regarding non-financial resources category of gap analysis for a new business by an entrepreneur
-what unique skills will be required to run the business? -what unique capabilities provide the entrepreneur a competitive advantage?
when are credit cards a good method of managing cash flow?
-when used to track individual expenses -when paid off each month -when used on a short-term basis
business owner questions
-who has to carry the liability insurance -who is responsible for making improvements -who is responsible for maintenance -can the business owner renew the lease after the term expires
examples of family experience that build knowledge and can grow into a business opportunity
-working on the home -maintaining family property -cooking with family members -tracing the family history
women of color account for BLANK of businesses headed by women
1/3
a business plan for a small business typically runs BLANK pages long
15-25
a venture capital backed business plan typically runs from BLANK pages long
25-45
the US government considers any business with fewer than BLANK employees to be a small business
500
in new corporations, the shareholders and the board of BLANK are often the same individuals
DIRECTORS
an advantage of the Subchapter BLANK corporation is that it allows the owners to report their income losses on their personal income tax returns, thus avoiding double taxation
S
T or F an entrepreneur's risk tolerance, prior experience, and personality orientation shape their analysis of a business idea's potential
TRUE
a gap BLANK is the relatively simple process of systematically examining the difference between what is expected and what occurs
analysis
personality tests should help you better understand yourself and your strengths and not be used as a guide for your BLANK
career
banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of BLANK
credit
suppliers will generally provide BLANK on both physical assets and the actual supplies purchased
credit
what sources of funding must be paid back first in the event of business failure?
debt
patents
design, utility, plant
in oder to be successful, entrepreneurs must:
develop an effective sales generation model
recent trends indicate that larger corporations have been BLANK, while entrepreneurial businesses have been BLANK rapidly.
downsizing; growing
what program is growing across the US to help start entrepreneurial businesses in an area?
economic gardening
Anheuser-Busch has achieved what?
economies of scale
all businesses must have BLANK for tax purposes
employer identification number
great depression of the 1930's
encouraged industrial concentration
TS and WD, in their book The Millionaire Next Door, state that 75% of self employed millionaires are BLANK
entrepreneurs
large businesses often have BLANK
extensive written procedures
crowdfunding def
funding received by a business by soliciting a large number of very small investors usually via the internet
once a list of skills and abilities has been developed, the next step is to perform a BLANK to examine the marketplace for an opportunity that exists between the demand for a product and supply provided by firms in the market
gap analysis
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 BLANK.
gross national product (GNP)
entrepreneurial business plan is developed as a BLANK
guide for running of the business
plan to exit the business that allows the investors to take advantage of growth
harvest plan
individuals from outside an industry are able to establish a new business in a manner not previously considered because they BLANK
have bounded rationality
limited liability corporation (LLC) and a Subchapter S corporation are similar in that they both BLANK
have the limited liability feature
business angels
high-net-worth individuals who invest in businesses not as a business but as an individual
students need to consider their own resources and abilities early when they think about starting an entrepreneurial business because of the BLANK
importance of an owner to a new business
cause of new business failure
insufficient financial resources at founding
Sub S and C corporations take their names from subchapters in the BLANK code
internal revenue
equity investment
is funds received by a business in exchange for a percentage ownership of the business
in what time period did the US see a decline in large multinational firms and a rise in new opportunities for entrepreneurial businesses
late 70s early 80s
sole proprietorship
legal business organization that is characterized by the fact that the person who owns the business and the business itself are treated as the same entity
people can help an entrepreneur's network by providing BLANK
legitimacy
in the long run, the cost of capital for non-equity funding is generally BLANK that of equity investment
less than (capital<equity investment)
insurance against lawsuit judgements
liability
capitalization of earnings valuation
method of valuation that is performed by taking the net profit of the organization; subtracting or adding any unusual items; and dividing that figure by capitalization rate
the founders and the leadership they provide play BLANK of a role in the business's success than senior leadership in the typical large organization
more
potential entrepreneurs must understand their level of tolerance to BLANK
risk
threats to profit margin, operational financing, and sales generation schemes are three threats to business success that entrepreneurs consider when they examine and characterize business BLANK
risk
the fortune 500 is published annually by fortune magazine and documents the 500 largest corporations by BLANK in the United States?
sales
the process of forming and managing a new entrepreneurial business in a clear, sequential manner that is rich in practical application and grounded in research is the BLANK part of entrepreneurial business development
science
a personality test can help one
select the type of business to start
patent
should only be obtained if it contributes to the sustainable competitive advantage of the organization
what is a grant?
simply money designed to help the new business begin operations with no expectation of repayment
in hobbies and activities, individuals develop BLANK specific to the hobbies
skills
by providing resources that new businesses cannot otherwise afford on their own, incubators can help these businesses establish BLANK
some level of legitimacy
big advantage of starting one's own business
the business owner can be the boss
support that entrepreneurs rely on
-financial resources -family -social networks
first column of the chart- gap analysis
-business idea -brief explanation of the idea
forms of business with two classes of partners
limited liability partnership
key financial issues involved with starting a new business
-flow of information in the new business -funding and the funding level of the firm -establishment of an accounting system
gap analysis is more BLANK than BLANK
art; science
retrenchment efforts focus on a firm's gaining control of its BLANK quickly, regardless of the impact to the long-term effort
cash flow
what report creates a listing of all checks that have been written and all that have cleared through the bank?
check register
organizational slack
excess of resources in an organization that allows for redundancy and the quick deployment of personnel
entrepreneurs need to ensure they have sufficient BLANK resources prior to starting a business
financial
what form of business has at least two individuals who are partners in a venture but only one person declares a full pass-through of all income on his or her federal taxes and assumes unlimited liability
limited liability partnership
the steps in the process of generating ideas do not occur in a(n) BLANK fashion but should occur in a(n) BLANK manner
linear; interactive
prerequisites refer to BLANK
benefits paid for by the firm
big 5 test
-the researchers surveyed thousands of individuals -the five factors emerged from the researchers' analysis of the data -it was developed by two independent research teams
reasons why owners are a great asset to a new business
-their dedication -personal involvement
uniform partnership act and the revised uniform partnership act
-their provisions do not cover issues like noncompete agreements -they are effective means to handle the basics of partnership
which of the following support the rationale for starting a business idea generation process by analyzing the skill sets of the potential founders
-there are literally millions of opportunities -pursuing opportunities without the requisite skill set wastes time -and money
workers' compensation laws
-they provide workers' compensation insurance that is regulated by each state -they aim to provide some type of wages to employees who are disabled or injured while on the job
ways entrepreneurial businesses can act as catalysts for societal change
-understanding of the local community -willing to pursue smaller markets ignored by large corporations
inventory should be taken at scheduled times during the year and an exact match should be completed between: (3)
-units sold -starting inventory -ending inventory
questions regarding hobbies
-what specific skills were required of this hobby? -what is it about the hobby that is exciting? -what procedures/ services were used in these hobbies?
T or F men are the largest single group of new business founders
FALSE
the effort required for an entrepreneur to carry out an effective due diligence analysis necessitates BLANK
a focus on a single business idea
the BLANK system of a firm is a powerful asset that should be used as a fine-grained tool to provide data about when and how inventory is needed
accounting
next step in the hiring process after the job description has been created
advertising the position
bounded rationality
rational decision making that is constrained by the background and history of the person making the decision
What is the glass ceiling?
referes to the fact that women and minorities may be hired by large firms but they experience limits placed on their advancement within the firm
include key suppliers, customers, and employees. these individuals are critical to the success of a business
stakeholders
accepting BLANK can limit a firm's ability to shop around for a cheaper source
supplier credit
entrepreneurs should work with family members for their advice, potential funding, reality check, and BLANK structure
support
why are banks often quite restrictive in their lending to start-up firms?
the risk is perceived to be too high
what are microloans?
they are often for only a few dollars each and are made directly to entrepreneurs to encourage self-development in developing nations.
each type of business started will require different BLANK frames
time
when starting a business, one must understand the relationship between BLANK an the expected return
time commitment
examining BLANK around the region, nation, or world that may not have reached a particular location is one way of identifying business opportunities or gaps
trends
starting a business is often the result of an event or condition within an individual's environment called a(n)
trigger
the practice, example, and the skill of the founder is the BLANK part of the entrepreneurial business development
art
robber barons
associated not only with the success of the industrial base but also with the great abuses in business
what insures businesses from damages caused by workers in the performance of their jobs
bonding
what is the initial analysis a process of?
moving from three to five ideas to a single idea
what is the initial value at which the firm's shares are offered?
par value
the first category of start up businesses are those formed as high growth, often high tech, ventures and are referred to as BLANK
venture capital backed firms
creative process in which a group of individuals are brought together and asked to generate ideas related to a specific topic, with little effort given to evaluating the potential of the ideas
brainstorming
mandated by law but not considered a benefit
unemployment insurance
a(n) BLANK fund is a fund that is usually organized as a limited partnership and is organized to make significant equity investments in high-growth new ventures
venture capital
sillicon valley and boston's 128 corridor are well known for
-generating new employment with entrepreneurial ventures -providing a growing tax revenue base -providing a basis to the area's economic vitality
large business characteristics
-greater access to resources -no one person is critical to the business's survival -knowledge is widely dispersed throughout the business
reasons for the recent growth in the number of women starting new businesses
-greater control over work/life balance -frustration with the glass ceiling
threats to operational financing
-high inventory needs -rapid expansion costs -an entrepreneurial team with low asset base -high development costs
T or F there is no need to treat a loan from a family member as a contractual agreement
FALSE
T or F to calculate the maximum amount to obtain in outside financing, it is advisable for an entrepreneur to calculate the entire cash flow projection by adding equity investments
FALSE
unlike a Subchapter C corporation, a limited liability corporation (LLC) BLANK
allows for flexible treatment of profits from the organization
reasons individuals can become frustrated with working in a large copporation
-inflexibility of large corporations in dealing with the needs of an individual's family and children -lack of promotion opportunities
questions to explore when identifying additional skill sources
-magazines and books you read -skills involved in the three greatest accomplishments of my life -what industry would I prefer to work
to fully utilize family resources, entrepreneurs should BLANK.
-make a list of members that they have regular contact with -list the capabilities those individuals possess that might be helpful
statements that make interviewing key successful entrepreneurs an attractive way to identify opportunities or gaps
-most successful entrepreneurs are too busy with their own business to pursue new ventures -most successful entrepreneurs have great ideas -entrepreneurs have a keen eye for what businesses are needed in an area
characteristics of entrepreneurial firms
-no more than 100 employees -the operation is designed in the image of the founder -the start up is self funded or closely funded
outcomes of poorly managed credit card
-possible bankruptcy of a firm -an increase in the interest rate
negotiating the deal with a job candidate
-requires a fairy prompt response -business owner should decide the points they're willing to discuss -business owner should finalize the agreed offer in writing
characteristics of gap analysis methodology for a new venture using a chart
-requires minimal research -reasonably quick analysis -intended to be completed by the entrepreneur or entrepreneurial team
