Deck 6: Managing Small Business Start Ups

Question 1

Approximately 600,000 new businesses are launched in the U.S. each year by entrepreneurs.

Answer 1

True

Question 2

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

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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 5

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

Question 6

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

Question 7

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

Question 8

Small businesses, according to the Small Business Administration, employ more than 90 percent of the private workforce in the United States.

Question 9

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

Question 10

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

Question 11

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

Question 12

Entrepreneurship and small business in the United States is an engine for job creation and innovation.

Question 13

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

Question 14

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

Question 15

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

Question 16

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

Question 17

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

Question 18

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

Question 19

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

Question 20

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

Question 21

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 22

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

Question 23

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

Question 24

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

Question 25

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 26

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 27

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

Question 28

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

Question 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

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

Question 34

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

Question 35

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

Question 36

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

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

Question 39

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

Question 40

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

Question 41

A(n) _____ is someone 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 42

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 43

Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur?

A) Idealist
B) Sustainer
C) Optimizer
D) Juggler
E) Hard worker

Question 44

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 45

Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of Melissa's characteristics is not consistent with entrepreneurship?

A) Melissa has high self-confidence.
B) Melissa tends to put things off till later.
C) She is untroubled by uncertainty.
D) She has a high energy level.
E) She has high need to achieve.

Question 46

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

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

Question 47

Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. These examples most closely relate to which personality trait of entrepreneurs?

A) Need to achieve
B) Patience
C) Tolerance for ambiguity
D) High energy level
E) Self-confidence

Question 48

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 49

Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which personality trait of entrepreneurs?

A) Need to achieve
B) Impatience
C) Tolerance for ambiguity
D) High energy level
E) Self-confidence

Question 50

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

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

Question 51

Social entrepreneurs are committed to both good business and:

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

Question 52

In 2011, which country had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business?

A) China
B) Peru
C) Columbia
D) Angola
E) Dominican Republic

Question 53

Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess?

A) A high need for achievement
B) A high need for power
C) An external locus of control
D) An inability to deal with uncertainty
E) Intolerance for ambiguity

Question 54

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

Question 55

Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as a(n) _____.

A) entrepreneurship
B) intrapreneurship
C) useless idea
D) large business
E) partnership

Question 56

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 57

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

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

Question 58

Which of the following 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 59

Tracy's Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes exemplifies which of the categories of small business owners?

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

Question 60

Which of the following demographic factors distinguish 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 likely the children of immigrants.
E) All of these.

Question 61

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 proprietorship
C) A corporation
D) An association
E) A trade alliance

Question 62

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 owner's liability
D) Unlimited liability and continuity
E) Continuity and non-tax structure

Question 63

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 64

_____ 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 65

Which of the following is an unincorporated business owned by two or more?

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

Question 66

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

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

Question 67

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

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

Question 68

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 69

Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for the company can best be described as a(n):

A) proprietorship.
B) partnership.
C) trade alliance.
D) corporation.
E) one man operation.

Question 70

Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as a:

A) SWOT analysis.
B) business portfolio.
C) business plan.
D) competitive analysis.
E) mission statement.

Question 71

Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as:

A) a proprietorship.
B) a partnership.
C) a trade alliance.
D) a corporation.
E) none of these.

Question 72

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 73

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 74

An artificial 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 75

The drawback(s) of proprietorship include:

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 financing.
E) complexity and cost.

Question 76

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 these.
E) provide necessary assistance and advice and provide information to help the entrepreneur prosper only.

Question 77

One of the first characteristics or points of a successful business plan is:

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

Question 78

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

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

Question 79

A(n) _____ has a legal life of its own.

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

Question 80

A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as:

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