Deck 2: Small Business Management Entrepreneurship and Ownership

Question 1

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

Answer 1

False

Question 2

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

Answer 2

False

Question 3

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

Answer 3

False

Question 4

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

Question 5

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

Question 6

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

Question 7

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

Question 8

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

Question 9

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

Question 10

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

Question 11

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

Question 12

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

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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

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

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

Question 25

A sole proprietorship is owned by two or more persons.

Question 26

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

Question 27

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 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

C corporations and S corporations are taxed the same.

Question 33

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

Question 34

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

Question 35

The major disadvantage of a sole proprietorship is limited liability.

Question 36

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 37

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

Question 38

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 39

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

Question 40

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

Question 41

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 42

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 43

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 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

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 46

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

Question 47

____ 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 48

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 49

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 50

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 51

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 52

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 53

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 54

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 55

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 56

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 57

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 58

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 59

The entrepreneurship process begins with

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

Question 60

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 61

Which of the following is more important in the future development of a small business owner than the formal education received in school?

A) Financial backing
B) Management expertise
C) Lifelong learning
D) Technical skills

Question 62

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 63

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 64

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 65

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 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

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 68

At Wingate University,a product that wirelessly connects to a smartphone and app to test blood alcohol levels was developed by

A) Faculty
B) Students
C) Research specialists
D) Campus police

Question 69

The three forms of business ownership include all but which of the following?

A) Sole proprietorships
B) Partnerships
C) Corporations
D) Joint ventures

Question 70

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 71

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 72

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

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

Question 73

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 74

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 75

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 76

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 77

One-day to one-year programs offered through college extension departments that are tailored to entrepreneurs and small business owners are referred to as

A) Small-business counseling programs
B) Entrepreneurial degree programs
C) Corporate grind programs
D) Executive education programs

Question 78

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 79

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 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