Deck 10: Managing Small Business Start-Ups

Question 1

China is the most entrepreneurial country,with 24 per cent of individuals age 18 to 64 starting a new business.

Answer 1

True

Question 2

Particularly in a turbulent environment,the three most important traits of successful entrepreneurs are realism,flexibility,and passion.

Answer 2

True

Question 3

The process of initiating a business venture,gathering and organizing the appropriate resources and assuming the associated risks and rewards refers to entrepreneurship.

Answer 3

True

Question 4

The first step in pursuing an entrepreneurial dream is to come up with a viable idea.

Question 5

Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners.

Question 6

A business plan for a small business should be detailed,encompassing at least 100 pages.

Question 7

Entrepreneurs in the sustainer category like the chance to balance work and personal life and often don't want the business to grow too large.

Question 8

The most common source of new business ideas comes from in-depth understanding of an industry or profession.

Question 9

Sole proprietorships are one of the fastest growing segment of small business.

Question 10

A document specifying the business details prepared by an entrepreneur prior to opening a new business is known as a business plan.

Question 11

Social entrepreneurs have a primary goal of improving society rather than maximizing profits.

Question 12

Optimizers are rewarded by chance to work on something new and creative.

Question 13

The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called tolerance for ambiguity.

Question 14

Social entrepreneurship combines the creativity,business smarts,passion and hard work of the traditional entrepreneur with a mission to change the world for the better.

Question 15

Entrepreneurship and small business is an engine for job creation and innovation.

Question 16

A need to achieve is a psychological characteristic that means people are motivated to excel and pick situations in which success is likely.

Question 17

Immigrants are more likely to start small businesses than native-born citizens.

Question 18

Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners.

Question 19

Social entrepreneurs are leaders who are committed to both good business and ensuring high profitability.

Question 20

Approximately 600 000 new businesses are launched in the US each year by entrepreneurs.

Question 21

To succeed in the competitive online market,aspiring entrepreneurs need to identify a market niche that isn't being served by other companies.

Question 22

The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur's own way.

Question 23

Borrowing from family and friends is a common source of debt financing for a start-up business.

Question 24

Two principle advantages of forming a corporation are continuity and limits on the owners' liability.

Question 25

The first stage of growth for an entrepreneurial company is the investment stage.

Question 26

An attractive innovation for entrepreneurs who want to start a business from scratch is to join a business incubator.

Question 27

Equity financing is when funds are invested in exchange for ownership in the company.

Question 28

The failure rate for high-tech business is lower than the failure rate for conventional businesses.

Question 29

At the success stage of growth,a company's substantial financial gains may come at the cost of losing its advantages of small size,including flexibility and the entrepreneurial spirit.

Question 30

The owner should start implementing more structured control systems by Stage 3 of growth for an entrepreneurial firm.

Question 31

A venture capital firm is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.

Question 32

At Stage 3 of growth for an entrepreneurial firm,managers often are hired to take over duties performed by the owner.

Question 33

The Small Business Administration (SBA)can provide loan financing for small business start-up.

Question 34

A domain name gives a company an address on the Web and a unique identity.

Question 35

The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing.

Question 36

The takeoff stage is the last of the five stages of growth for an entrepreneurial company.

Question 37

Since a corporation is a legal structure reserved for large firms,small businesses have two basic choices for legal structure of their company: proprietorship and partnership.

Question 38

Entrepreneurs see themselves as being less in control of their environment,generally speaking,and can be expected to have an external locus of control.

Question 39

A sole proprietorship an unincorporated business owned by two or more people.

Question 40

In the start-up stage of an entrepreneurial business,formal planning tends to be nonexistent except for the business plan.

Question 41

A(n)_____ has a legal entity of itself .

A) partnership
B) LLP
C) corporation
D) association
E) trade alliance

Question 42

Which of the following per Daft et al are high-energy people who enjoy handling every detail of their own businesses?

A) Jugglers
B) Idealists
C) Sustainers
D) Optimizers
E) Hard workers

Question 43

Which of the following is the most cited source of new business ideas?

A) Brainstorming
B) In-depth understanding of an industry or profession
C) An active hobby
D) Copying someone else
E) None of these

Question 44

_____ combines creativity,passion,and hard work of the traditional entrepreneur with a mission to change the world for the better.

A) Contemporary entrepreneurship
B) Traditional entrepreneurship
C) Modern-day entrepreneurship
D) Social entrepreneurship
E) Conventional entrepreneurship

Question 45

Social entrepreneurs are committed to both good business and:

A) swaying political opinion of consumers.
B) improving the natural environment.
C) positive sustainable social change.
D) non-profit goals.
E) big profits.

Question 46

Which of the following is the process of starting a business venture,organizing the resources and taking the risks?

A) Intrapreneurship
B) Entrepreneurship
C) Small business administration
D) Venture capital
E) Equity financing

Question 47

Which of these refers to an unincorporated business owned by an individual for profit?

A) Partnership
B) Sole proprietorship
C) Corporation
D) Association
E) Trade alliance

Question 48

The most common reason for becoming an entrepreneur is:

A) joining the family business.
B) to control one's future.
C) to be one's own boss.
D) to fulfill a dream.
E) the result of being laid off.

Question 49

A(n)_____ is an employee who recognizes a viable idea for a business product or service and carries it out.

A) intrapreneur
B) entrepreneur
C) manager
D) leader
E) introvert

Question 50

One of the early characteristics or rationale of a successful business plan is to:

A) develop a profile of potential customers and market needs.
B) demonstrate a clear and compelling vision that creates excitement and commitment.
C) unearth the key ingredient of the business that will attract millions of customers.
D) reveal the entrepreneur's background and role in the company.
E) provide essential information about funding received so far.

Question 51

Which of the following is a popular small business form because it is easy to start and has few legal requirements?

A) A partnership
B) A PLC
C) A corporation
D) An association
E) A trade alliance

Question 52

An entrepreneur:

A) assumes the risks of the business.
B) reaps the rewards of the business.
C) assumes the financial and legal risks of ownership.
D) recognizes a viable idea for a business product or service and carries it out.
E) all of these.

Question 53

Which of these means that people are motivated to excel and choose situations in which success is more likely?

A) External locus of control
B) Tolerance for Ambiguity
C) Awareness of passing time
D) Internal locus of control
E) Need for self achievement

Question 54

Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty?

A) Tolerance for ambiguity
B) External locus of control
C) Need to achieve
D) Awareness of passing time
E) Internal locus of control

Question 55

Which of the following is NOT an appropriate legal structure for an entrepreneurial company?

A) Limited Liability
B) Corporation
C) Partnership
D) Trade alliance
E) All of these are appropriate legal structures for an entrepreneurial company.

Question 56

Which of the following demographic factors distinguish US entrepreneurs from others?

A) They are likely the youngest child in their family.
B) Most entrepreneurs launch their businesses between the ages of 35 and 55.
C) Their parents likely worked for large companies.
D) They are often the children of immigrants.
E) All of these.

Question 57

What is the primary goal of the social entrepreneur?

A) Maximizing profits
B) Improving society
C) Reaching social circles
D) Finding funding
E) Writing grants

Question 58

The drawback(s)of partnership ship includes:

A) the unlimited liability of the partners.
B) conflicts with partners.
C) existence regardless of whether the owners live or dies.
D) difficulty in obtaining large value levels of financing.
E) complexity and cost.

Question 59

If a small business owner enjoys the chance to balance work and personal life,she would be considered a(n)_____.

A) idealist
B) optimizer
C) hard worker
D) juggler
E) sustainer

Question 60

Today,inspired by the growth of companies such as Amazon,entrepreneurs are connecting to the _____ to start new businesses.

A) Small Business Administration
B) Internet
C) bookstore
D) mall
E) Internal Revenue Service

Question 61

Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the company?

A) Venture-debt
B) Debt financing
C) Equity financing
D) Franchising
E) Licensing

Question 62

_____ refers to borrowing money that has to be repaid in order to start a business.

A) Venture capital
B) Debt financing
C) Equity financing
D) Franchising
E) Licensing

Question 63

All of these are essential entrepreneurial characteristics except:

A) self-confidence.
B) tolerance for ambiguity.
C) external locus of control.
D) high energy level.
E) education.

Question 64

With the entrepreneurial personality,Holly can be expected to have all of the following traits except:

A) internal locus of control.
B) tolerance for ambiguity.
C) high need to achieve.
D) high uncertainty avoidance.
E) all of these.

Question 65

A legal entity created by the state and existing apart from its owners is known as:

A) a partnership.
B) a proprietorship.
C) a corporation.
D) an association.
E) a trade alliance.

Question 66

After fully developing their new business idea,Holly and Peter recognize the need to develop a business plan.Typical business plans will include all of the following,except:

A) mission or vision of the company.
B) information about the suppliers.
C) policy for extending credit to customers.
D) analysis of critical risks that threaten success.
E) all of these should be included.

Question 67

Entrepreneurs who aspire to start an online businesses typically implement all the following steps EXCEPT:

A) create a professional website.
B) choose a domain name.
C) build online relationships
D) creating a physical production location.
E) identify a profitable market niche.

Question 68

What is the most common way that entrepreneurs finance the start-up of a new business?

A) Self-financing from savings or credit cards
B) Loans from friends,family or business associates
C) Bank loans
D) Lines of credit
E) Venture capital

Question 69

The majority of existing incubators are operated by:

A) large corporations.
B) Not for profit organizations.
C) small businesses.
D) international businesses.
E) college drop-outs.

Question 70

A venture capital firm wants to invest in businesses with a high rate of return.In return,they will:

A) invest large amounts of money.
B) provide necessary assistance and advice.
C) provide information to help the entrepreneur prosper.
D) all of the three above.
E) provide only the minimum assistance and advice to help the entrepreneur prosper only.

Question 71

_____ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with support from the owner.

A) Franchising
B) Business incubation
C) Spinning-off
D) Globalization
E) Right offerings

Question 72

A group of companies or individuals that invests money in new or expanding businesses,typically for partial ownership and potential future cash flows is known as:

A) an equity financing firm.
B) a franchisor.
C) a venture capital firm.
D) a corporation.
E) a trade alliance.

Question 73

The key problem,at the _____ stage of growth,is how to grow rapidly and finance that growth.

A) existence
B) survival
C) takeoff
D) resource maturity
E) success

Question 74

Formal planning,such as a strategic plan,is usually instituted during which stage?

A) Start-up
B) Survival
C) Takeoff
D) Success
E) Resource maturity

Question 75

At which stage of growth is the company if it is solidly based and profitable?

A) Resource maturity
B) Takeoff
C) Survival
D) Success
E) Existence

Question 76

Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in their own specific way?

A) Participate in a business incubator
B) Start a new business
C) Buy a franchise
D) Buy an existing business
E) All of these

Question 77

During the _____ stage,the company will need to make greater use of budgets,standard cost systems and statistical reports.

A) existence
B) survival
C) takeoff
D) success
E) maturity

Question 78

During the latter stages of entrepreneurial growth,the manager:

A) must learn to delegate and decentralize authority.
B) must institute greater use of rules and procedures.
C) must hire sufficient professional management to handle the growth phase.
D) all of the above.
E) none of the above.

Question 79

What are the two principal advantages of forming a corporation

A) Unlimited liability and potential conflicts with partners
B) Freedom from debt and relatively simple structure
C) Continuity and limits on directors' liability
D) Unlimited liability and continuity
E) Continuity and non-taxable structure

Question 80

Which of these is true about the business incubator?

A) It gives up control since every business is run the same way.
B) It provides shared office space,management support services and management advice.
C) It develops an international business.
D) It provides an established name and advertising.
E) All of these.