Deck 6: Managing Start-Ups and New Ventures

Question 1

 Women have historically started fewer businesses than men, and the gap is widening.

Answer 1

False

Question 2

 Entrepreneurs who aspire to start an online or mobile business must follow different, more rigorous steps than is required to start a traditional business.

Answer 2

False

Question 3

 Optimizers are rewarded by the chance to work on something that is new, creative, or personally meaningful.

Answer 3

False

Question 4

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

Question 5

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

Question 6

 A new corporate structure known as a benefit corporation has been established for minority-owned and women-owned businesses.

Question 7

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

Question 8

 Globally, entrepreneurship has experienced a tremendous boost due to larger numbers of college graduates and the rapid expansion of the upper class in countries such as China and India.

Question 9

 The powerful advantage of a franchise is that management help is provided by the franchisor.

Question 10

 Research indicates that the age of a company, more so than its size, determines the number of jobs that it creates.

Question 11

 In the United States, entrepreneurship and small business are the engines for job creation and innovation.

Question 12

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

Question 13

 The U.S. Census Bureau's Survey of Business Owners shows that the number of minority-owned companies in the United States increased from 5.8 million firms in 2007 to 8 million in 2012.

Question 14

 Sole proprietorships are one of the fastest-growing segments of small business in both the United States and Canada.

Question 15

 Most entrepreneurs use their own savings as the primary source of initial funding.

Question 16

 Entrepreneurs are able to stay positive after long periods of sacrifice or struggle.

Question 17

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

Question 18

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

Question 19

 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 20

 IndieGoGo, Kickstarter, and GoFundMe are all examples of crowdfunding platforms.

Question 21

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

Question 22

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

Question 23

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

Question 24

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

Question 25

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

Question 26

 One of the biggest mistakes that new entrepreneurs is in not knowing when to pivot, which means knowing when to abandon a failing business.

Question 27

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

Question 28

 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 29

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

Question 30

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

Question 31

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

Question 32

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

Question 33

 Equity financing consists of funds that are invested in exchange for ownership in the company.

Question 34

 All entrepreneurs are motivated by building larger, more profitable businesses.

Question 35

 People who believe that outside forces determine what happens to them have a high internal locus of control.

Question 36

 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 37

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

Question 38

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

Question 39

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

Question 40

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

Question 41

 Small businesses represent _____ percent of U.S. exporters. 

A) 87
B) 22
C) 98
D) 54
E) 72

Question 42

 One area of great growth and opportunity for women-owned businesses is:

A) expanding globally.
B) volunteering as consultants for the Small Business Administration (SBA).
C) filing patents for the products they produce.
D) starting technology firms.
E) hiring employees to work for the company.

Question 43

 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) an entrepreneurship.
B) an intrapreneurship.
C) franchising.
D) a business plan.
E) a partnership.

Question 44

 A(n) __________ is someone who recognizes a viable idea for a business product or service and carries it out by finding and assembling the necessary resources to undertake the business venture. 

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

Question 45

 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 46

 The U.S. Census Bureau's Survey of Business Owners shows that the number of minority-owned companies in the United States was __________ in 2012.

A) 5.8 million
B) 1.3 billion
C) 872,000
D) 8 million
E) 2.9 million

Question 47

 Which of the following is the process of initiating a business venture, organizing the necessary resources, assuming the associated risks, and enjoying the rewards?

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

Question 48

 In the United States, entrepreneurship and small business are the engines behind __________ and __________.

A) job creation; competition
B) innovation; competition
C) competition; investment
D) job creation; innovation
E) innovation; investment

Question 49

 __________ reflects an entrepreneur's desire to make their own decisions about their business. A) Self-confidence B) An internal locus of control C) High energy D) Autonomy E) Entrepreneurial sacrifice

Question 50

 Only about _____ percent of women-owned businesses have employees.

A) 2
B) 5
C) 10
D) 15
E) 20

Question 51

 Which of the following are high-energy people who like the chance that a small business gives them to handle everything themselves?

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

Question 52

 The U.S. Small Business Association (SBA) reports that small firms accounted for _____ percent of net new jobs created between 1993 and 2011.

A) 30
B) 32
C) 46
D) 64
E) 82

Question 53

 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 54

 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 characteristic of entrepreneurs?

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

Question 55

 Which of the following 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 56

 Which of the following is not a form of debt financing?

A) A loan from the Small Business Administration (SBA)
B) Crowdfunding
C) Personal credit cards
D) A bank loan
E) Borrowing from family and friends

Question 57

 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 58

 Entrepreneurs who aspire to start an online or mobile business:

A) follow the usual steps required to start a traditional business.
B) should be savvy with technology.
C) need to be unusually nimble.
D) must know when to pivot.
E) all of these.

Question 59

 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. She has a strong work ethic and often works more than 60 hours a week. These examples most closely relate to which characteristic of entrepreneurs?

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

Question 60

 In 2012, which of the following countries had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business?

A) China
B) Ecuador
C) Senegal
D) Thailand
E) Dominican Republic

Question 61

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

A) Brainstorming
B) In-depth understanding of industry or profession
C) A hobby
D) Copying someone else
E) Finding a market niche

Question 62

 Social entrepreneurs are committed to both good business and:

A) swaying political opinion of consumers.
B) improving the natural environment.
C) changing the world for the better.
D) nonprofit goals.
E) big profits.

Question 63

 __________ entrepreneurship combines the creativity, business smarts, passion, and work of the traditional entrepreneur with a social mission.

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

Question 64

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

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

Question 65

 A successful business plan should be no more than:

A) 5 paragraphs.
B) 2 pages.
C) 10 pages.
D) 50 pages.
E) 100 pages.

Question 66

 Ginger likes to set her own goals, which are moderately difficult. 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 67

 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 68

 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 69

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

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

Question 70

 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 owners' liability
D) Unlimited liability and continuity
E) Continuity and nontax structure

Question 71

 A drawback of a sole proprietorship is:

A) the unlimited liability of the partners.
B) conflicts with partners.
C) its continued existence regardless of whether the owner lives or dies.
D) difficulty in obtaining financing.
E) the complexity and cost to keep the records required by law.

Question 72

 Melissa is a very good middle manager. However, she has a dream of starting her own business. She is willing to give up all of her free time and weekends in order to get her business started. This illustrates Melissa's:

A) high self-confidence.
B) entrepreneurial sacrifice.
C) internal locus of control.
D) autonomy.
E) need to achieve.

Question 73

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

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

Question 74

 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 75

 All of the following are common reasons why small-business ventures fail except:

A) sloppy accounting.
B) fear of firing.
C) poor management.
D) long-term focus.
E) operational mediocrity.

Question 76

 Vaughn Hager started his one-man consulting business under the name Hager Associates. He likes that he does not have to consult anyone else when making decisions. The legal structure for the company can best be described as a(n):

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

Question 77

 Over the past two decades, most new jobs have come from:

A) established small businesses.
B) new companies.
C) franchises.
D) established multinational corporations.
E) women-owned businesses.

Question 78

 Which of the following statements regarding partnerships is true?

A) When forming a partnership, a formal partnership agreement should be drawn up with the help of an attorney.
B) Unlike other forms of ownership, a partnership has a legal life of its own.
C) A disadvantage of a partnership is the limited liability of the partners.
D) A partnership is an incorporated business owned by two or more people.
E) Partnerships often dissolve within two years.

Question 79

 Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1,500 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 80

 An artificial entity created by the state and existing apart from its owners is known as a(n):

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