Test 1
Which of the following is not an example of a small business?
A business that sold $7.5 million in products or services last year.
Which of the following describes a profit?
A positive gain from operations after all expenses are subtracted.
Which of the following is not one of the factors considered for the level of threat of substitute products or services?
Access to distribution channels
If you are an existing, well-established firm within the industry, which of the following forces would you want to be high?
Barriers to entry
A(n) ___________ is a visual representation of a Lean Startup's core business hypotheses.
Business Model Canvas
Which valuation method uses projected future cash flows and the time value of money to determine the worth of a business?
Cash flow valuation
Your business has a reputation for producing high-quality, low-price products at a fast pace. This would be an example of which root of opportunity in the marketplace?
Competitive advantage
Which of Porter's five forces is generally the strongest industry force and is influenced by all other forces?
Competitive rivalry among existing firms
If a bakery sells a cupcake for $3.00, has material costs of $0.25 and labor costs of $0.50, which of the following statements is not true?
EOU is $.75
_____ is also known as entrepreneurial thinking.
Effectual logic
This component of the opportunity analysis addresses the role of the community, region, nation, and world relative to your business?
Environmental analysis
Which section of the business plan must be compelling and comprehensive, written last, be limited to one to two pages, because it may be the only part that many people read?
Executive summary
The economy of the United States is a free-enterprise system, which is described by all of the following except:
Free-market systems are owned and operated by the government.
Business plans should do all of the following except:
Include technical jargon your audience may not understand.
______ focuses on a segment of business rather than on individual consumers.
Industry research
The free-enterprise system impacts entrepreneurs in which of the following ways?
It discourages entrepreneurs who waste resources by driving them out of business.
Which of the following statements about decision processes for business opportunities is false?
It is best to work alone throughout any type of decision process.
Porter's five forces are frequently utilized to conduct which portion of the feasibility analysis?
Market and industry feasibility
Which of the following is an example of a competitive advantage in selection?
Providing a wider range of choices than your competitors.
If you are evaluating how funds will be generated through asset sales, licensing, and subscription fees, you are considering this factor of the Business Model Canvas?
Revenue streams
Which of the following is not one of the three processes described for creating and identifying opportunities?
Seeking out failed competitors and borrowing their ideas.
Which of the following is not a competitive advantage?
Temporarily undercutting a competitor's already low prices.
Which of the following statements about small businesses is true?
The clear majority of businesses are small businesses.
The complete bundle of products and services, along with the benefits, you will be bringing to the marketplace is referred to as which element of the business definition?
The offer
Which of the following is not an example of customer research?
Tour of a competitor facility
According to Joseph Schumpeter, this is not one of the ways that entrepreneurs find opportunities to create new businesses.
Using an existing product to sell to mass markets.
Delivering a pitch, writing a financing proposal, or developing a business plan are examples of which of the following career skills you will develop by using this book?
Written and oral communication
Earnings valuation is a method that assesses the firm's value based upon:
a stream of earnings multiplied by an agreed-upon factor or price/earnings ratio.
Considering the business model canvas' section on Revenue Streams includes all of the following except:
accessibility.
One way to jump-start entry into small business ownership is to purchase a business. Purchasing an existing business is referred to as a(n):
acquisition.
Barriers to entry:
are factors that contribute to the ease or difficulty of a new competitor joining an established market.
Standards for the __________ valuation method include book value, adjusted book value, liquidation value, and replacement value to determine a firm's value.
asset
Creating a business plan can help you do all of the following except:
avoid ever making any mistakes.
An entrepreneur is best described as an individual that does all of the following except:
avoids risks at all costs.
As an existing firm, you want __________ to be high.
barriers to entry
Expensive legal fees in an established high-technology industry, which contribute to the difficulty new businesses face when attempting to enter the market, are considered to be:
barriers to entry.
Causal logic is:
based on cause and effect and starts with a goal.
All of the following statements about causal logic are true except it is:
best applied in entrepreneurial situations of uncertainty.
Competitive strategy is a combination of the business':
business definition and competitive advantage.
If you have created a document that thoroughly explains your business idea and how you intend to carry it out, you have created a(n):
business plan
The promotion component of the marketing mix consists of all of the following except:
channels of distribution.
If you attract customers to your business by beating your competitor on price and service in the market, this would be referred to as a(n):
competitive advantage.
The benefit you can provide to your customers that puts you ahead of your competition, and keeps you there, is your:
competitive advantage.
According to Michael Porter, the degree of ___________ among ___________ is impacted by all industry forces.
competitive rivalry; existing firms
The fundamental ethical and moral philosophy and beliefs that form the foundation of the organization and provide broad guidance for all decision making are best described as the organization's:
core values
The cost of materials and direct labor used to make a product comprise its:
cost of goods sold.
The beliefs, values, and behavioral norms of an organization encompass its:
culture
the company's mission statement entails all of the following except:
describing its beliefs, values, and norms
Production and delivery capability includes all of the following except:
describing the product benefits.
or a product, the COGS includes the cost of:
direct labor used to make the product plus the cost of materials.
You own and operate your own small business. You have decided to pay yourself with a portion of the business profits each year in addition to earning $25/hour. You are paying yourself a:
dividend and a wage.
A business valuation method that assesses the value of the firm based on a stream of earnings that is multiplied either by an agreed-upon factor (the capitalization factor) or by the price/earnings ratio (for a publicly traded company) is referred to as:
earnings valuation.
The amount of gross profit that is earned on each unit of the product or service a business sells is referred to as:
economics of one unit of sale.
All of the following are factors considered for Porter's "threat of substitutes" force except:
economies of scale.
A defined way of thinking employed by entrepreneurs that includes decision-making principles applied in situations of uncertainty is referred to as:
effectual logic.
One of the challenges for entrepreneurs in a free-enterprise system is:
encouragement of competition between entrepreneurs.
A(n) _____________ assists in decision-making by considering the product/service, market, industry, and financial data
feasibility analysis
One of the most frequently used tools for industry analysis is the:
five forces model.
Entrepreneurs choose how and when they are paid. If you pay yourself a wage, this is a:
fixed rate per hour.
Dividing a particular marketing into segments according to location is an example of _________ segmentation.
geographic
If Joanie starts a business to protect the environment by reducing carbon emissions, she has formed a ________ entrepreneurship.
green
As defined by the Small Business Administration (SBA), a small business:
has fewer than 500 employees and sells less than $5 million annually.
All of the following are common standards for asset valuation except:
historical earnings value.
The economics of one unit of sale calculations reveal:
how much gross profit is being earned on each unit of the product or service that is sold
Lean Startup is a(n):
hypothesis-driven approach to business startup using iterative development.
All of the following statements about economics of one unit are true except:
if one unit of sale is not profitable, the business can still be successful.
A mission statement is all of the following except it:
includes learned behaviors shaped by company leadership.
The income statements included in the financial section of the business plan are a financial document that summarizes:
income and expense activity over a specified period of time.
The financial analysis section of the business plan should contain three years of ___________, which summarize income and expense activity for a specified period of time.
income statements
The product life cycle consists of the following four stages that a product or service goes through as it matures in the market:
introduction, growth, maturity, and decline.
For an idea to qualify as a genuine opportunity, it must lead to the development of a product or service that:
is of value to the customer and is profitable for the business.
All of the following statements of industry research are true except:
it focuses on demographics of individual consumers.
The Business Model Canvas component that addresses physical, financial, intellectual, and human needs which are critical to making the model function is the section titled:
key resourses
The executive summary must be all of the following except:
lengthy and detailed.
f a firm is segmenting its market geographically, it is dividing the population by:
location
Which of the following is not considered as a potential benefit of entrepreneurship?
long hours
The collection and analysis of data regarding target markets, industries, competitors is defined as:
market research.
The stage when consumers have become knowledgeable about you and your competitors, but growth has come to a halt due to market crowding is referred to as:
maturity
Start-ups create models or versions of new products with minimal effort to secure maximum customer feedback with minimal effort. These are referred to as:
minimum viable products.
"To organize the world's information and make it universally accessible and useful" is Google's:
mission statement.
If Joe became an entrepreneur because he lost his job and starting his own business was the best option to provide for his family, he is a(n):
necessity-based entrepreneur.
All of the following are factors referred to as the "Four Ps" included in the marketing mix except:
people
The Key Resources section of the Business Model Canvas includes the:
physical, financial, intellectual, and human needs that are critical to making the model function.
The __________ represents the four stages that a product or service goes through as it matures in the market.
product life cycle
Something that exists in nature, is human-made, and tangible is best described as a(n):
product.
The environmental analysis portion of the opportunity analysis and research section includes the:
roles of the community, region, nation, and world relative to your business
The target market is best described as the:
segment of the market you are aiming to serve.
Providing a wider range of choices than your competitors is an example of which of the following factors of competitive advantage?
selection
The organization's vision is all of the following except it is:
smaller and more narrow than the organization's mission.
A for-profit enterprise with the dual goals of achieving profitability and attaining social returns is best described as:
social entrepreneurship.
A unicorn is a:
startup company valued privately or publicly at over $1 billion.
Your competitive advantage must be:
sustainable.
The segment of the market you are aiming to serve is referred to as the:
target market.
Market research is best described as:
the collection and analysis of data regarding target markets, industries, and competitors.
The cash flow valuation method determine's the firm's value based upon:
the future projected cash flows and the time value of money.
Which of the following components of the business definition addresses the bundle of tangible products or intangible services along with their benefits?
the offer
Opportunity cost is the:
value of what must be given up to obtain something else.
The __________ for your business paints a picture of the overall view of what you want your organization to become in the future.
vision
The Business Model Canvas is a:
visual representation of a Lean Startup's core business hypotheses.
The company's core values include all of the following except:
what it will become in the future