Deck 2: Small Business Management, Entrepreneurship, and Ownership

Question 1

The three most important characteristics that every successful entrepreneur possesses are perseverance, needed technical skills, and a deep belief in himself/herself.

Answer 1

True

Question 2

The primary reason most people go into business for themselves is to gain the respect of others.

Answer 2

False

Question 3

Personal characteristics vary as a business evolves from one stage to another.

Answer 3

True

Question 4

Personality characteristics are not useful in predicting who will be a successful entrepreneur.

Question 5

More than 50 percent of business owners started their own business in order to earn large sums of money.

Question 6

Entrepreneurship and small business management are processes, not isolated incidents.

Question 7

The conclusion after more than 30 years of research on personal characteristics is that successful entrepreneurs cannot be predicted.

Question 8

A triggering event is a specific event or occurrence that sparks the entrepreneur to proceed from thinking to doing.

Question 9

Financial risks, material risks, and psychological risks are all risks faced by the entrepreneur.

Question 10

Environmental factors are the traits possessed by the business owner that affect the development of the small business.

Question 11

The typical entrepreneur tends to accept moderate risk only after careful examination.

Question 12

Individuals who prefer steady pay and a normal nine-to-five work schedule also tend to gravitate toward self-employment

Question 13

In the end, every business will eventually reach the harvest stage.

Question 14

Entrepreneurs tend to have a weaker internal locus of control than do people in general.

Question 15

There is only one factor that could be called a triggering event.

Question 16

Mergers, IPOs, and ESOPs are all forms that can be taken in the harvest stage of the startup process model.

Question 17

Independence and control over their own lives are reasons many people begin small businesses.

Question 18

Entrepreneurs recognize an opportunity and start a business to take advantage of it.

Question 19

A small business manager and an entrepreneur perform the same functions.

Question 20

Income uncertainty is one of the most challenging aspects of starting a new business.

Question 21

A closely held corporation publicly trades its shares of stock on a major auction market.

Question 22

In a partnership, if both partners bring the same qualities to the business, then one of them is probably not needed.

Question 23

Limited liability is the major advantage of forming a business as a corporation.

Question 24

A sole proprietorship is owned by two or more persons.

Question 25

If a partner leaves, the partnership is dissolved and the remaining partners can either find a new partner or terminate the business.

Question 26

Over 25 percent of all new business owners have an MBA or other professional degree.

Question 27

The most common form of business in the United States today is the corporation.

Question 28

Although the ability to raise capital is better with a partnership than with a proprietorship, a partnership still cannot usually gather as many resources as a corporation.

Question 29

C corporations provide individuals with limited-liability protection of a corporation while allowing the tax advantages of a partnership.

Question 30

A form of business ownership where the business is owned by a limited group of people and the stock is not traded publicly is called a closely held corporation.

Question 31

In a partnership, the partners will be held liable only for their own negligence.

Question 32

A document describing a business that is filed with the state in which a business is formed is referred to as articles of incorporation.

Question 33

Entrepreneurs and small business owners typically have higher education levels than the general public.

Question 34

C corporations and S corporations are taxed the same.

Question 35

The biggest advantage of partnerships is the pooling of talents and resources.

Question 36

One of the most serious problems that can threaten a partnership is managerial conflict.

Question 37

One's own efforts are the most important factor to a person with a strong locus of control.

Question 38

The major disadvantage of a sole proprietorship is limited liability.

Question 39

Foresight in writing articles of partnership can solve many partner problems in the future.

Question 40

A major advantage of a sole proprietorship is that the owner has complete control over the business.

Question 41

Entrepreneurship primarily involves which phase of business?

A) The startup process
B) Hiring of key employees
C) Maintaining a positive cash flow
D) Building and maintaining a sufficient customer base

Question 42

The time span for the innovation phase may be

A) One month or less
B) One year or more
C) Several months or even several years
D) Five years or more

Question 43

When does the entrepreneurship stage end and the small business management stage begin?

A) When the maturity stage ends
B) When the growth stage ends
C) After the entrepreneurial event ends
D) When the triggering event ends

Question 44

Which of the following behaviors was not cited as being included in most definitions of an entrepreneur?

A) Controlling
B) Creation
C) Innovation
D) Risk assumption

Question 45

The entrepreneurship process begins with

A) An innovative idea
B) A triggering event
C) Implementation
D) Growth

Question 46

Forces that occur outside of the business that affect the business and its owner are referred to as

A) Financial factors
B) Controlled factors
C) Environmental factors
D) Internal factors

Question 47

The phase of implementation in the entrepreneurial process involves all but which of the following?

A) Introducing new products
B) Opening new markets
C) Industrial reorganization
D) Developing an advertising campaign

Question 48

Which stage of the startup process is characterized by relative certainty that the business will survive?

A) Growth
B) Maturity
C) Harvest
D) Implementation

Question 49

Sue Pallen is a partner in a cake-decorating company. Her role within the company is to identify new markets for growth and sustaining the company's long-term financial health by maintaining all financial records. As such, Sue can best be described as a/an

A) Entrepreneur
B) CEO
C) Nonprofit manager
D) Small business manager

Question 50

LLCs can be an attractive form of ownership for small businesses.

Question 51

The stage in the startup process model in which the small business owner removes himself/herself from the business is which of the following?

A) Growth
B) Maturity
C) Implementation
D) Harvest

Question 52

Rubin's day-to-day job as a business owner involves identifying opportunities for which marketable ideas exist and assuming the risk to make these ideas happen. Rubin can best be described as a/an

A) Innovator
B) Marketer
C) Entrepreneur
D) Small business manager

Question 53

Jasper has developed a concept for a start-up company that involves developing a new process for priming and painting automobile panels. Based on this example, Jasper is focusing on which entrepreneurial behavior?

A) Creation
B) Innovation
C) Risk assumption
D) Performance intention

Question 54

According to the opening Vignette, John Goscha can best be described as a/an

A) Franchiser
B) Entrepreneur
C) Corporate business manager
D) Small business manager

Question 55

The entrepreneurial process in the startup process model begins with

A) A visit to the local banker for startup funds
B) A visit to the local library for more information on the business
C) A visit to a favorite business professor for advice
D) An innovative idea that is refined as the idea is thought through

Question 56

A small business manager faces which of the following environmental forces?

A) Finding opportunities
B) Prompting creativity
C) Locating an incubator
D) Hiring and retaining employees

Question 57

Which of the following is the key element needed to bring the entrepreneurial idea to reality during the implementation stage?

A) Capital/money
B) Commitment
C) Management expertise
D) A college education

Question 58

In the growth stage of the startup process model, what is the primary goal of the small business?

A) Regulations
B) Employees
C) Vendors
D) Reaching critical mass (survival)

Question 59

In the triggering event and the implementation stages of the startup process model, which of the following environmental factors will affect the small business?

A) Role models
B) Suppliers
C) Bankers
D) Competition

Question 60

___________ is the entrepreneurial behavior that involves the expectation of high levels of growth or profit.

A) General management
B) Supply chain
C) Risk assumption
D) Performance intention

Question 61

In the growth stage of the startup process model (Figure 2.3), which of the following organizational characteristics is needed?

A) Strategy
B) Marketing
C) IPO
D) Operation management

Question 62

Which of the following is not prerequisite for becoming a successful entrepreneur?

A) Passion
B) Determination
C) Knowledge
D) Education

Question 63

A characteristic of entrepreneurial personality that leads one to avoid goals that would be extremely difficult to achieve or goals with success almost guaranteed is called

A) Internal locus of control
B) A high desire for risk
C) Flexibility
D) A high need to achieve

Question 64

Which percentage of new business owners have had at least some college education?

A) 25 percent
B) 50 percent
C) 60 percent
D) 80 percent

Question 65

About half of all business owners choose to go into business for themselves because they

A) Want to earn lots of money
B) Like the challenge
C) Want to avoid hard work
D) Want to fulfill others' expectations

Question 66

An entrepreneur faces which of the following environmental forces?

A) Hiring and retaining employees
B) Dealing with vendors and suppliers
C) Fighting government regulations
D) Identifying product opportunities

Question 67

The ability to control one's own fate is known as

A) Locus of control
B) Self-determination
C) Perseverance
D) Need to achieve

Question 68

In terms of education level of new business owners, the most common educational degree level is the

A) Bachelor degree level
B) MBA level
C) PhD level
D) Associate degree level

Question 69

In the innovation and triggering event stages of the startup process model (see Figure 2.3), which of the following personal characteristics are needed by the small business owner?

A) Better opportunity
B) Planning
C) Commitment
D) Risk taking

Question 70

Some of the risks assumed through self-employment include all of the following except

A) Income uncertainty
B) Long work hours
C) Personal liability
D) A change in the owner's personality

Question 71

In the Reality Check "Small Biz on Campus," what did Whitney Williams begin selling while still in college?

A) Unique-flavored chewing gum
B) A new water-skiing product
C) Refurbished cell phones
D) Custom jewelry

Question 72

iContact is a web-based program developed by University of North Carolina students that promotes

A) Revenue generation
B) Social responsibility
C) Entrepreneurship
D) Frugality

Question 73

After spending 15 years working in the restaurant industry, Alex has decided to open a restaurant of his own. His 15 years of experience will allow him to capitalize on which of the following?

A) Passion
B) Determination
C) Trustworthiness
D) Knowledge

Question 74

The personal quality linked to entrepreneurship in which people are motivated to excel and choose situations where success is likely is known as

A) Locus of control
B) Need to achieve
C) Need to succeed
D) High performance goals

Question 75

The one overriding characteristic needed to be a successful small business owner is which of the following?

A) Confidence
B) Energy
C) Vision for the future
D) Incredible tenacity

Question 76

Which two areas of coursework are the fastest growing subjects in business schools?

A) Management and Marketing
B) Entrepreneurship and Small Business Management
C) Operation Management and Finance
D) Management and Finance

Question 77

In the triggering event stage of the startup process model (Figure 2.3), which of the following personal characteristics are needed by the small business owner?

A) Leadership
B) Vision
C) Commitment
D) Boredom

Question 78

The primary reason most people start their own business is to

A) Build for their family
B) Earn large sums of money
C) Use their skills/abilities
D) Live where they like

Question 79

In the _________ stage of the business management process, attention is placed on team building, setting strategies, and creating a structure and culture of the business.

A) Harvest
B) Growth
C) Maturity
D) Innovation

Question 80

The ability to see, conceive, and create new and unique products, services, and processes is known as

A) Innovation
B) Risk taking
C) Product development
D) Locus of control