Intro to Business Chapter 6, Introduction to Business | Chapter 6
A(n) ________________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product. A. entrepreneurial team B. joint venture C. self-directed functional team D. managerial task force
A
Effective entrepreneurial teams combine: A. creativity with marketing and production experience. B. venture financing, tax benefits, and production economies. C. scientific abilities, capital investment, and marketing skills. D. risk tolerance, debt financing, and international experience.
A
entrepreneurial team
A group of experienced people from different areas of business who join together to form a managerial team with skills needed to develop, make, and market a new product.
Erin developed a new type of exercise equipment she calls the Tush N' Tone. After unsuccessfully searching for potential investors, she arranged a personal loan and borrowed additional money from her parents. Her willingness to continue believing in her idea and to remain enthusiastic shows that Erin is: A. characteristically self-nurturing. B. better suited to managing a nonprofit organization. C. unaware of the risks she was taking. D. not a true entrepreneur.
A
Intrapreneurs make use of __________ to develop and launch new products and generate new profits. A. their employer's existing human, financial, and physical resources B. their own personal financial resources C. government-supplied physical and financial resources D. old ideas abandoned by entrepreneurs
A
Jake is an innovative engineering graduate who works for a large company that makes adhesive products for commercial and consumer use. One of his primary responsibilities is to initiate and develop new products to complement the firm's current product line. Jake's company is ___________. A. intrapreneurial B. entrepreneurial C. an outside consultant for other firms D. at a disadvantage because it is trying to operate like a small business
A
The U.S. government's Immigration Act of 1990: A. encouraged entrepreneurs to come to the U.S. through "investor visas." B. established a government program to teach American workers displaced by immigration how to start their own businesses. C. established guidelines to help entrepreneurs recruit legal aliens as a source of low-cost labor. D. proposed an exchange program for American and European entrepreneurs to temporarily live internationally in order to open up foreign branches for their businesses.
A
Which of the following best describes entrepreneurial personality traits? A. Tolerant of uncertainty and highly energetic. B. Risk averse and self-nurturing. C. Appreciate direction from others and risk averse. D. Prefer to work less hours and prefer to give directions and let others do the footwork.
A
Which of the following statements is not a challenge for home-based businesses? A. Affordable technology such as the Internet B. Staying focused on the business and leaving home chores for after-business hours C. Using your time wisely D. Promoting your services
A
Small Business Administration (SBA)
A U.S. government agency that advises and assists small businesses by providing management training and financial advice and loans.
small business
A business that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size (set by the Small Business Administration) in terms of employees or annual receipts.
business plan
A detailed written statement that describes the nature of the business, the target market, the advantages the business will have in relation to competition, and the resources and qualifications of the owner(s).
Small Business Investment Company (SBIC) Program
A program through which private investment companies licensed by the Small Business Administration lend money to small businesses.
entrepreneurship
Accepting the risk of starting and running a business.
Service Corps of Retired Executives (SCORE)
An SBA office with volunteers from industry, trade associations, and education who counsel small businesses at no cost (except for expenses).
affiliate marketing
An online marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website.
An entrepreneurial team consists of: A. managers with similar skills, abilities, and interests. B. experienced professionals from different areas of business. C. a group of wealthy investors who share a vision for a product. D. representatives from management, labor, and the government who work together to solve a company's problems in a creative way.
B
Anna recently left a large insurance firm and opened a home-based business preparing medical transcriptions for doctors. Based on recent statistics, she can expect: A. a negative reaction from friends and family who wonder when she will get a real job. B. the emergence of affordable technology will make it less challenging for her to compete with larger firms offering the same service. C. the government will discourage her attempts to create a home-based business in the hopes that she will opt for locating in an enterprise zone. D. to find security, routine and a paycheck from her new enterprise.
B
Apple's smart team is an example of a firm that succeeded by: A. encouraging each manager to focus on a well-defined area of the business and build his own specialized department. B. bringing together a group of talented and experienced managers to conceive, develop, and market products. C. emphasizing a low price and low-cost strategy right from the beginning. D. assembling a group of employees whose inexperience was a plus, because they did not come with the baggage and institutional ideas of larger companies.
B
Business incubators are usually government-funded facilities intended to: A. provide health care benefits for small business owners and their families. B. offer start-up firms low-cost office space and basic business services. C. help rebuild the nation's infrastructure. D. assist foreign investors in identifying business opportunities in the U.S.
B
Enterprise zones and investor visas are examples of: A. government policies that favor large corporations rather than small businesses. B. government programs that encourage economic growth through entrepreneurship. C. government policies designed to encourage intrapreneurs. D. examples of private initiatives to reduce the government's role in the economy.
B
Enterprise zones are specific geographic areas that: A. the government has set aside for major corporations that promise to spend at least $10 million to create new jobs. B. attract business investment by offering lower taxes and government support for development. C. the government has recognized as having the fastest growth rates in the country. D. are characterized by government ownership of small businesses.
B
Which of the following explains why individuals accept the risks of business ownership? A. The potential for learning how to be self-disciplined B. The sense of self-satisfaction and independence C. The challenge of seeking power D. The desire to work fewer hours
B
Historically entrepreneurs in the U.S. A. created wealth for themselves, but have had a minor impact on the economy as a whole. B. started many small firms that later became major corporations employing thousands of workers. C. experienced success only when they worked in partnership with the federal government. D. played an important role, but are less important now in creating jobs and wealth.
B
Keaton is an intrapreneur for a multinational electronics company. As an intrapreneur Keaton: A. is expected to recruit new managerial talent for his firm. B. will use the firm's existing resources to develop new products. C. is concerned mainly with improving the firm's public image. D. will concentrate on creating new ventures that can be spun off to become independent firms.
B
Kyra recently quit a job with a large corporation to start her own business. While she realizes that her decision comes with risk, she is excited at the chance to be independent and by the challenges of running her own firm. Kyra is an example of a(n): A. intrapreneur. B. entrepreneur. C. venture capitalist. D. raconteur.
B
One reason we have seen continued growth in home-based businesses is: A. the location offers a more secure operational environment. B. affordable technology makes it easier to compete. C. people need something to do while they wait to return to work for a large corporation. D. it is less risky to start a home-based business than other types of entrepreneurial ventures.
B
State and city governments have promoted facilities where new businesses can open up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, _______________ continue to grow in popularity. A. enterprise zones B. incubators C. intrapreneurial development centers D. venture farms
B
The Spotlight on Small Business box "Earning While Learning" features students who A. directed inheritance money they received into profitable business ventures. B. turned a passion into a business opportunity. C. realized the American dream at a very young age, and now run multimillion-dollar companies. D. convinced banks to fund their business ideas.
B
The goal of an intrapreneur is: A. to improve quality control in a corporation's production process. B. to develop new products and generate new profits for the corporation. C. to implement cost control policies for existing products. D. to create smaller companies within larger companies
B
Which of the following U.S. issues does entrepreneurship most directly affect? A. The political process B. The ability to create jobs for others C. Contributions of money to organizations that help people in need D. The ability to influence national macroeconomics polices
B
Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge? A. It's all about profits, and the chance to make a lot of money. B. It's about independence and the opportunity to share in the American dream. C. It's about power and fame. D. It's about a lot of things, but it does not include personal achievement.
B
Business owners who prefer to maintain their businesses at a manageable size are called: A. macropreneurs B. intrapreneurs C. micropreneurs D. home workers
C
One of the challenges of running a home-based business is: A. an increase in business risk. B. managing the extra time on your hands. C. keeping work and family tasks separate. D. burdensome tax laws.
C
Successful entrepreneurial teams: A. quickly organize themselves like large corporations. B. assign only one person to new product innovation. C. bring a variety of talent to the business venture. D. outsource most of the details of innovation.
C
Which of the following best describes the difference between an intrapreneur and an entrepreneur? A. Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses. B. Intraprenuers are practical while entrepreneurs are creative. C. Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business. D. Intrapreneurs limit their efforts to financial investments, while entrepreneurs are involved in the management of all areas of a business.
C
Which of the following statements is characteristic of entrepreneurs? A. They like certainty. B. They have the ability to visualize a clear path. C. They look at problems and see opportunities. D. They prefer to be inventive rather than worry about whether the invention solves a customer need.
C
incubators
Centers that offer new businesses low-cost offices with basic business services.
intrapreneurs
Creative people who work as entrepreneurs within corporations.
A creative person working within a corporation to launch new products and generate new profits is known as a(n): A. arbitrator. B. micropreneur. C. macropreneur. D. intrapreneur.
D
A successful web-based strategy that helps a business spread the word about its website and products is called ______________. A. wildfire marketing. B. "it's all about the buzz." C. social marketing. D. affiliate marketing.
D
Affiliate marketing is a web-based business strategy that: A. relies on customers that enter the sites of large companies such as Gap and Nike. B. asks you to offer the names and e-mail addresses of 10 of your friends who may be interested in the products or services the website is selling. C. is currently illegal, but difficult to stop. D. rewards individuals who are willing to link a company's website to their blog or social network page.
D
Although successful entrepreneurs are more tolerant of uncertainty, A. they seldom start another business after a failure. B. they develop mental games to see themselves through the risk game, especially. C. they always protect themselves from failure by taking out lots of insurance. D. they strive to take calculated risks.
D
Enterprise zones are: A. government-owned properties that are available for entrepreneurial ventures at a reduced cost. B. similar to incubator facilities but strictly run by city and state governments. C. blighted areas that contain toxic materials making them unsuitable for business operations. D. specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.
D
Entrepreneurship is: A. managing businesses for others. B. a controlling interest in the ownership of a corporation. C. managing businesses that operate in multiple countries. D. accepting the risk of starting and running a business.
D
Southwest College received a government grant to establish a business incubator. This facility will offer: A. local government agencies assistance in obtaining funds for urban renewal. B. area businesses advice on employee benefits and ways to reduce taxes. C. venture capitalists an opportunity to identify new entrepreneurs. D. new businesses low-cost office space with basic business services.
D
Successful entrepreneurs are self-nurturing. This means they: A. look to others for strength and encouragement. B. self-finance their business with no assistance from others. C. perform all business operations by themselves. D. believe in themselves and their ideas.
D
Which of the following is a characteristic of successful entrepreneurs? A. Power-seeking B. Relies heavily on others who believe in the business C. Willingness and desire to follow others D. Action-oriented
D
micropreneurs
Entrepreneurs willing to accept the risk of starting and managing the type of business that remains small, lets them do the kind of work they want to do, and offers them a balanced lifestyle.
Why do many small businesses avoid doing business globally?
Financing is often difficult to find. Many people don't know how to get started and do not understand the cultural differences in foreign markets. The bureaucratic red tape is often overwhelming.
What are some of the advantages small businesses have over large businesses in selling in global markets?
Foreign buyers enjoy dealing with individuals rather than large corporations because (1) small companies provide a wider variety of suppliers and can chip products more quickly and (2) small companies give more personal service.
venture capitalists
Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.
What does the government do to promote entrepreneurship?
Make enterprise zones (specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support).
Why are people willing to take the risks of entrepreneurship?
Opportunity, profit, independence, and challenge.
market
People with unsatisfied wants and needs who have both the resources and the willingness to buy.
A business plan is probably the most important document a small-business owner will ever create. There are nine sections in the business plan outline shown in the chapter. Can you describe at least five of those sections now?
Section 1: Executive Summary (two to three page summary of the proposed venture). Section 2: Company Background (describe company operations to date, potential legal considerations, and areas of risk and opportunity). Section 3: Management Team (include and organization chart, job descriptions of listed positions, and detailed resumes of the current and proposed executives). Section 4: Financial Plan (provide five-year projections for income, expenses, and funding sources). Section 5: Capital Required (indicate the amount of capital needed to commence or continue operations, and describe how these funds are to be used.
enterprise zones
Specific geographic areas to which governments try to attract private business investment by offering lower taxes and other government support.
What are the advantages of entrepreneurial teams?
Team members can combine creative skills with production and marketing skills right from the start. Entrepreneurial teams can also ensure more cooperation and coordination later among functions in the business.
How do micropreneurs differ from other entrepreneurs?
While other entrepreneurs are committed to the quest for growth, micropreneurs know they can be happy even if their companies never appear on a list of top-ranked businesses.