Entreprenuership Chapter 1

While you can start a business at anytime, a good rule of thumb is to avoid recessions T/F

F

The direction a firm choices to pursue is its __________________________.

Focus of entrepreneurship -The key directions the organization intends to pursue

Exceptionally high growth potential and innovativeness categorizes the firms that fall into the __________________________

High growth sector (Firms with exceptionally high innovativeness and growth rates, making them candidates for possible venture capital funding)

Tammy runs her own business and enjoys not working for anyone else. Tammy is

Self-employed

Which of the following is likely to be in the economic core? a. A local coffee shop b. A chain bookstore c. A bio-diesel firm d. A Dairy Queen restaurant

a. A local coffee shop

Kai-Yee is a ___________________; she chose to purchase an existing business from its original owner

buyer

According to the BRIE model: a. Exchanges must take place b. There must be some sort of resources - money, time, products, services, etc. c. There should be something that sets the firm up as a business, that makes it separate from our personal buying and selling d. All of the above are necessary.

d. All of the above are necessary.

How many new businesses start each year in the United States? a. 250,000 to 400,000 b. Over a million c. Between 500,000 and a million d. Over two million

b. Over a million

Newly created good, services or firms can hurt existing goods, services or firms; this is known as ______________________________

creative destruction

Facing and beating challenges and learning are ____________________.

growth rewards

_________________ are those people who become owners by inheriting or being given a stake in the family business.

heirs

Doug's first small business, a Mexican restaurant, is doing so well, he's thinking of opening a Caribbean one. He is practicing _________________

Creation ( The entrepreneurial focus which looks at the making of new entities)

Buying and selling on the Internet is known as _______________________.

E-Commerce - The use of the Internet to conduct business transactions.

A big problem with starting a new business is that there just isn't enough financing available T/F

F

Among the most popular reason for starting a new business are flexibility, a living income and power and recognition. T/F

F

Internationally, firms that have between 1 to 50 and 51 to 500 people are known respectively as

Small & medium enterprises

Four categories of business owners are: a. Buyers, founders, heirs, and franchisers b. Founders, franchisers, heirs and entrepreneurs c. Entrepreneurs, small business owners, buyers and franchisers d. Entrepreneurs, buyers, founders and franchisers

a. Buyers, founders, heirs, and franchisers

Which entrepreneurship focus is associated with all forms of entrepreneurship? a. Creation b. Customer c. Efficiency d. Innovation

b. Customer

Trina started her business by herself; she can be considered a

Founder

Most small businesses are imitative in nature T/F

T

Franz opened an eBay store to sell CDs, becoming an example of _________ ____________________________________.

Virtual Instant Global entrepreneurship - (VIGE) Deploying a business internationally using the e-commerce capabilities of the Internet.

Morris wanted to go into business, also, but he decided to lease a prepackaged business, a

franchise

Martha owns a Chik-Fil-A franchise. She belongs to the ________________

Ambitious firm sector ( Consists of franchises and multisite firms, with low to moderate inno- vation and high levels of growth)

If Pepsi undertook a project to create a new product or intensify customer satisfactions, they would be undertaking __________________________

Corporate entrepreneurship ( The form of entrepreneurship which takes place in existing businesses around new products, services, or markets)

Tyler has found a way to increase his client approval ratings to 90%: he is practicing ___________________________.

Customer focus ( The entrepreneurial focus which refers to being in tune with one's market. )

Most small businesses belong to the ________________________

Economic core sector ( The most numerous and most widely available type of firm, also called small business, ranging from low to moderate levels of innovation and growth. )

Ben found a way to raise more avocados using less land. Ben was practicing _______________________________.

Efficiency -The comparison of productivity ratios to see the extent that an organization has generated more outputs with fewer inputs.

The form of economy with the highest level of entrepreneurship is the __________________________________.

Efficiency-driven economy - Nations with a largely industrialized economy.

BRIE stands for Boundary, Resources, Intention and Energy - four things entrepreneurs need T/F

F

High growth ventures start small, but grow rapidly once purchased by venture capitalists T/F

F

Innovations often come from small businesses because they have the financing to pursue new ideas and not as much red tape as larger businesses T/F

F

Small businesses benefit their owners, their workers, but few others T/F

F

The US with it's free market system and "can-do" attitude is the country that leads in entrepreneurial activity T/F

F

The vast majority of small businesses are high-growth ventures T/F

F

While only about a quarter of the firms exporting are small business, they account for most of the export sales. T/F

F

While small businesses often offer services to other small businesses, large firms want to deal mostly with other large firms T/F

F

Russia is a country with a moderate industrialization base and is considered a(n) _________________________________.

Factor-driven economy - Nations with little manufacturing and largely farming and raw material extracting industries.

Whether a firm is a government agency, a large corporation of a small business, refers to its ______________________________

Forms of entrepreneurship - The settings in which the entrepreneurial effort takes place

Matt is the CEO of a firm that is developing alternative fuel sources. These innovative products have a huge marketing, making his firm fall into the ____________________________.

Glamorous sector (Consists of firms with high growth and high innovation. These are among the most visible firms in the media.)

Small firms who do what other existing firms do with slight variations are

Imitative

A(n) ___________________________ is a facility which offers subsidized space and business advice to companies in their earliest stages

Incubator

Small businesses are generally forms of _____________________________

Independent entrepreneurship -The form of entrepreneurship in which a person or group own their own for-profit business.

If a business is owned by an individual or small group rather than existing as part of a larger firm it is a(n)

Independent small business

Bella's mother provided $3000 and her best friend, Delaney, gave her another $1,000. With this ______________________, Bella was able to start-up her company

Informal capital - Sources of funding from noninstitutional sources such as family, friends, and other individuals

"There's got to be a better way of moving cars than this freeway," muses Spencer. He is trying to come up with a(n) _________________.

Innovation -The entreprenurial focus which looks at a new thing or a new way of doing things.

A country such as the US whose services sector is very large is known as a(n) ____________________________________.

Innovation-driven economy - Nations with high-value-added manufacturing and large service sectors.

Devi considered whether she would make custom violins for concert violinists or a low cost model everyone could afford. In making this decision, she was considering her _____________________.

Innovativeness (Refers to how important a role new ideas, products, services, processes, or markets play in an organization. )

Emmett found out that 40 % of his target market had visited his restaurant in the last year. Emmett was measuring his ____________________________.

Mindshare -The degree of attention your target market pays to your idea or organization

Truly entrepreneurial businesses do things that are new and different; they exhibit

Novelty

A business that is _________________________ has constant or at least daily management by its owner

Owner managed

The model that looks at the form and the focus of entrepreneurship is called _____________________________________.

PICS Model of Entrepreneurship - An acronym for the four forms of entrepreneurship: P ublic, I ndependent, C orporate and S ocial

When considering ideas of a new product, Priyanka discarded specialty frozen food for an enzyme that makes plastic biodegrade. She selected her idea based on its _______________________.

Potential for growth ( Refers to the potential market size)

The Pomona school board decided that it needed to improve its efficiency in conducting business and improve its image among parents. They were engaging in _______________________________.

Public enterprise/entrepreneurship - The form of entrepreneurship that involves revitalizing government agencies

Jae Min had an excellent idea that would revolutionize the treatment of diabetes, but he didn't have the resources need to bring his idea to fruition. Jae Min is typical of firms that fall in the _________________________

Resource constrained sector ( Consists of firms high in innovation but low in growth rate due to a lack of resources)

The _____________________ is a part of the United States government which provides support and advocacy for small businesses

Small Business Administration (A part of the United States government which provides support and advocacy for small businesses.)

A business with fewer than 500 employees is categorized by the Small Business Association as a

Small business

The _________________________ are offices co-sponsored by state and the Federal government that offer free or low-cost help to existing and potential small businesses.

Small business development center ( Offices co-sponsored by states and the federal government that offer free or low-cost help to existing and potential small businesses)

Mary Kate's Therapeutic Riding School depended on donations to run its innovative new therapy. They relied on ____________________________.

Social enterprise/entrepreneurship - The form of entrepreneurship involving the creation of selfsustaining charitable and civic organizations, or for-profit organizations which invest significant profits in charitable activities

Creative destruction means that new businesses often hurt existing businesses T/F

T

Flexibility rewards include such things as being able to take time off for family events and structuring work hours for when it's most convenient for you T/F

T

Mompreneurs often bring unique skills of managing a family into starting their businesses T/F

T

One of the best ways to increase the likelihood of success is to get help T/F

T

Owning your own business often is a chance for opportunity to an immigrant, for people with unusual schedules, or for those needing a second chance T/F

T

Recently, small businesses have created 75% of all the new job growth in the United States T/F

T

Savvy entrepreneurs have been known to be creative in finding funds, often taping into sources of informal capital. T/F

T

Small businesses help the community by providing tax dollars T/F

T

Small businesses often are more open to hiring part-timers and people with less than ideal work histories T/F

T

Someone who is in public entrepreneurship is likely to move to and be successful in corporate or social entrepreneurship. T/F

T

The two biggest hurdles facing a potential entrepreneur are moving from action to inaction and choosing the right actions T/F

T

While many people think that you have to make something in order to be profitably, services are one of the fastest growing small business areas. T/F

T

Which of the following statements about small businesses is true? a. A failed business can be a good learning experience for the next time around. b. There's not enough financing to start a business c. You need to make something if you're going to make money d. Students should start a business as they don't usually have the skills necessary.

a. A failed business can be a good learning experience for the next time around.

Chiyoko had been thinking about opening a day spa for years. She had chosen a name and reserved the domain name so no one else could use it. She looked at various local properties and pretty much decided where to locate her business. Chiyoko has been performing _________________ tasks. a. Boundary b. Resource c. Intention d. Exchange

a. Boundary

Which of the following is NOT true about global entrepreneurship? a. Efficiency driven economies have the highest levels of entrepreneurship. b. A firm that starts up on eBay or eLance is a virtual instant global entrepreneur. c. The majority of US firms that export are small businesses. d. Entrepreneurship happens in all sort of economies

a. Efficiency driven economies have the highest levels of entrepreneurship.

Jose had a neat idea for a product he thought would sell well. He developed the idea for "Taco on a Stick" and started a company to manufacture and sell it. Jose is a ________________. a. Founder b. Franchiser c. Buyer d. Heir

a. Founder

Carla has started three different businesses in the food service area. Each time she says she has learned from her mistakes and knows what she'll do differently the next time. "It's like a test everyday that I'll pass or not pass and I really enjoy the challenge." Carla is interested in ___________________. a. Growth rewards b. Income rewards c. Flexibility rewards d. Growth and income rewards

a. Growth rewards

A business that starts small but has the intention to develop into a large firm is called a ____________________ a. Success b. High-growth venture c. Medium enterprise d. Novelty enterprise

a. High-growth venture

An independent small business is one that: a. Is not part of a larger corporation b. Has only one owner (that is, it is not a partnership) c. Does not depend on outside investors for start up funds d. Is not subject to heavy government regulation

a. Is not part of a larger corporation

The two hurdles face by people thinking to start businesses are _____________ and taking the right action a. Moving from inaction to action b. Reading small business books or taking a class in entrepreneurship or small business c. Finding the money to start your business d. Finding an idea no one has used already

a. Moving from inaction to action

According to the Census Department, business start-ups in the first two years provide what percentage of new jobs? a. Nearly all b. 75% c. About 50% d. 25%

a. Nearly all

Which of the following is typical for a high-growth venture? a. When the firm is in trouble, focus on selling more. b. The owner tries to maintain autonomy. c. Human resources are very personalized. d. Growth is limited by the possibility of loss of control by the owner.

a. When the firm is in trouble, focus on selling more

What goal do entrepreneurs rarely mention as a reason they chose to start a business? a. To develop an idea into a product or service b. For personal recognition and achievement c. To continue to grow and learn as a person d. To have a high income

b. For personal recognition and achievement

Loretta leased the right to use McDonald's name, sell their products and other rights in a prepackaged program. Loretta is a ________________ a. Founder b. Franchiser c. Buyer d. Heir

b. Franchiser

Traci found out that 32% of the women on Elm Street knew that she had opened a new salon and day spa. Traci was investigating her ________________ a. Efficiency b. Mindshare c. Market potential d. Innovativeness

b. Mindshare

While Steve Wozniak is often credited for creating the personal computer industry, thanks to his innovation we now have personal computer repairmen, personal computer stores, software designers, etc. This benefit of a small business can best be described as ______________________. a. Jobs for people that might not be employable due to the need for flexible hours b. New opportunities for related industries c. Innovations that make our lives more convenient or give us new options d. Income for part time workers

b. New opportunities for related industries

Juanita decided her town needed a Filipino restaurant. She attended several small business classes and signed up for some assistance from the local SIFE chapter. She started accumulating equipment necessary and even interviewed some friends as possible employees of her restaurant. Juanita has been doing __________tasks. a. Boundary b. Resource c. Intention d. Exchange

b. Resource

Which of the following is true of starting a new business in a recession? a. Nine out of 10 of the top 10 Fortune 500 companies started in a recession b. Starting in a recession teaches you things to use in other economic downturns. c. Businesses started in a recession are more likely to fail than those started in better times. d. All of the above are true.

b. Starting in a recession teaches you things to use in other economic downturns.

According to the BRIE model: a. A business must have dedicated physical space - a boundary. b. The entrepreneur must have the desire to start his or her own business - intention. c. The business must have people other than the entrepreneur working for it - resources. d. All of the above are necessary.

b. The entrepreneur must have the desire to start his or her own business - intention.

___________ of the people in the US think about owning their own business, but only one in ________________ of those who think about it actually starts one. a. 10%; five b. 44%; five c. 44%; nine d. 66%; nine

c. 44%; nine

Thomas opted to purchase a business his friend Bill had started but no longer wanted to run, Thomas is a ___________ a. Founder b. Franchiser c. Buyer d. Heir

c. Buyer

Mary's job took her to a small town where her husband, Dave, was unable to find work. After a year of a commuter marriage, Dave opted to start a Web design business. He stated, "All I need is an Internet connection and since my clients are all over the world, I can work without just about any time day or night. We've decided that now is a good time to start our family, because I'm around when Mary's at work." Dave has experienced ______________________. a. Growth rewards b. Income rewards c. Flexibility rewards d. Growth and income rewards

c. Flexibility rewards

As a housepainter, Tom just knew there had to be a better way to paint ceilings. He didn't have an engineering degree, but evenings and weekend, he tinkered in his basement and finally found the answer to his problems and a small business was born. Small businesses often contribute such _______________________-. a. Jobs for people that might not be employable due to the need for flexible hours b. New opportunities for related industries c. Innovations that make our lives more convenient or give us new options d. Income for part time workers

c. Innovations that make our lives more convenient or give us new options

Bob knew that a lot of people really enjoyed his homemade barbeque sauce and wondered if it might be something he could turn into a small business. He put together a preliminary business plan and did some marketing research. He experimented with several different recipes and found the most popular ones. Bob took an early retirement option at his job and decided to try his luck with Bob's Better Barbeque Sauce. Bob is performing __________ actions. a. Boundary b. Resource c. Intention d. Exchange

c. Intention

Using the BRIE model has value because it: a. Guarantees your business will be successful. b. Reduces the chances of legal issues down the road. c. Keeps you for overlooking something major which could cause you to fail. d. Is the core for your business plan

c. Keeps you for overlooking something major which could cause you to fail.

Truly entrepreneurial businesses are __________, while small businesses are ____________ a. Independent; dependent b. Imitative; novel c. Novel; imitative d. Owner-managed; partnership managed

c. Novel; imitative

Firms that get help in starting up from organizations such as Small Business Development Centers or the Small Business Administration have four or five year survival rates percentages in the ____________ a. 50's b. 60's c. 70's d. 80's

d. 80's

As a offshoot of providing new jobs, new businesses also help the local economy because these new jobs: a. Generate incomes on which taxes are paid b. Often provide part-time work or flexible work hours c. Often offer jobs to first time job seekers d. All of the above

d. All of the above

High-Growth ventures are likely to ______________________ a. Use other people's money for funding b. Focus on marketing over sales c. Grow whenever possible d. All of the above

d. All of the above

In this textbook, an entrepreneur refers to a. A person starting a business with a truly novel idea b. Anyone who is self-employed c. Someone who is a small business owner d. All of the above

d. All of the above

Why do people become entrepreneurs? a. For flexibility in the schedules to accommodate family and personal life b. For personal growth c. To achieve financial security for there family d. All of the above are true.

d. All of the above are true.

Jerry has finally saved $10,000. That plus a small business loan should be enough to let him convert his historical home into the Bed and Breakfast he's always dreamed of owning. The contractors have already started adding bathrooms and making the other changes needed and Jerry already has his first reservation, an old college friend who's willing to exchange his detailed opinions as a guest for a reduced room rate. Jerry is concentrating on ________________ actions. a. Boundary b. Resource c. Intention d. Exchange

d. Exchange

The four categories in the Dynamic Capitalism Typology are Resource Constrained, Economic Core, Ambitious and __________________ a. Sexy b. Gorgeous c. Exciting d. Glamorous

d. Glamorous

Miguel was in an industry that was seeing many of its customers go to foreign firms. Things were such that the company had frozen salaries for the third year in a row. This gave Miguel the incentive to turn his photography hobby into a business. "I can easily match my salary and should be able to make extra beyond that. Besides, by spending full time on photography, I have been able to learn new things about my hobby and my pictures are better and better." Miguel is experiencing __________________________. a. Growth rewards b. Income rewards c. Flexibility rewards d. Growth and income rewards

d. Growth and income rewards

In the United States, what percentage of businesses are high-growth ventures? a. Less than 20% b. Less than 10% c. Less than 5% d. Less than 1%

d. Less than 1%

The four forms of entrepreneurship are: a. Public, customer, independent, corporate b. Creation, customer, efficiency, innovation c. Resource constrained, glamorous, ambitious, economic core d. None of the above

d. None of the above

Small businesses are likely to __________________________ a. Have novel products. b. Be limited by market response. c. Focus on effectiveness rather than efficiency. d. None of the above.

d. None of the above.

Paul was delighted when a new restaurant opened in town. He'd been looking for a part time job to earn money for a class trip and this restaurant needed busboys. While Paul was thrilled because new businesses mean jobs, other people in the community where happy because: a. You can never have too many restaurants b. This was a good investment of their tax dollars c. This keeps Paul off the street and out of trouble d. Successful new businesses provide tax dollars for other projects.

d. Successful new businesses provide tax dollars for other projects.

Based on innovativeness and potential for growth, small businesses can be categorized using the _________________________

dynamic capitalism typology ( A model of an economy categorizing businesses based on their innovativeness and growth rate)

A person who starts an organization such as a business is a(n) ___________________________________.

entrepreneur

LaVonda wanted a job that would fit around her children's school schedule, their after school activities and her volunteer work. She started a business seeking ________________________.

flexibility rewards

About 75% of all entrepreneurs hope to match or slightly better their income by starting their own business. These are ________________.

income rewards

After getting her dentistry degree, Gen never really intended to be a small business owner. Like many dentists, though, she opened her own office and found she was a small business owner. She became a small business owner due to ______________________________.

occupational structure