Deck 7: Entrepreneurship and Starting a Small Business

Question 1

For prospective entrepreneurs,enrolling in an Introduction to Business or Small Business Management course offered through their community college:

A)can be helpful by offering them an opportunity to meet experienced small business owners.
B)would offer training equivalent to two years of on-the-job experience.
C)would be most helpful after starting their business venture.
D)is likely to be wasted time since college courses tend to be too theoretical.

Answer 1

A

Question 2

Although all the functions of business in a small-business setting are important,which of the following are the primary concerns when you start your own business?

A)planning and accounting
B)planning and managing your employees
C)planning and financing
D)financing and knowing your customers

Answer 2

C

Question 3

Examples of crowdfunding platforms include:

A)business plans
B)financial capitalists
C)venture capital
D)kick starter

Answer 3

D

Question 4

A review of small business successes and failures indicates that the:

A)businesses that are easiest to start offer the greatest potential for long term growth and profits.
B)reason the service sector is rapidly growing is that these firms are easy to start and keep going,and offer high levels of security and growth potential.
C)restaurant industry offers the least risk for entrepreneurs.
D)businesses with the potential of high profit levels tend to be difficult to start and hard to keep going.

Question 5

Dr.Smiley White just graduated from dental school.He is hoping to acquire the necessary funding to start his own dentist's office.One advantage of this type of business is the:

A)very low startup costs.
B)low failure rate.
C)above average opportunity to borrow funds at a high interest rate.
D)nearly unlimited growth potential.

Question 6

Entrepreneurs in Canada have:

A)played an important role,but are less important now in creating jobs and wealth.
B)often created wealth for themselves,but have had a minor impact on the economy as a whole.
C)been successful only when they worked in partnership with the federal government.
D)played a major role in developing the Canadian economy.

Question 7

are the primary concerns of someone starting a business.

A)Human relations and accounting
B)Staffing and controlling
C)Financing and planning
D)Marketing and public relations

Question 8

Ellie is a creative person who works for the Bigdome Corporation,a large producer of consumer products.One of her primary duties is to initiate and develop new products to complement the firm's current product line.Evidently Ellie is a(n):

A)intrapreneur.
B)entrepreneur.
C)owner's daughter.
D)outside consultant.

Question 9

One reason why many Canadian small businesses are not involved in exporting is:

A)the government's new homeland security programs limit opportunities for small businesses.
B)Canadian products are perceived as inferior.
C)many of these firms do not know how to get started.
D)there is a limited market for their products.

Question 10

When comparing small businesses to their larger competitors,it is clear that:

A)small firms are slower to respond to opportunities than are large firms.
B)bigger is always better.
C)small firms often can offer more personalized customer services than big firms.
D)small firms can always outperform big firms on a level playing field.

Question 11

Which of the following best describes the difference between an intrapreneur and an entrepreneur?

A)Intrapreneurs limit their efforts to financial investments,while entrepreneurs are involved in the management of all areas of a business.
B)Intrapreneurs are practical while entrepreneurs are creative.
C)Intrapreneurs start nonprofit organizations while entrepreneurs start profit-seeking businesses.
D)Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business.

Question 12

Sally Wright has just taken early retirement,including a substantial retirement allowance.She wishes to continue working and wants to invest her retirement allowance in her own small business,and feels comfortable doing so with an established product and process.She worked for the same employer in the same job all of her working career and therefore has no experience in running her own business.In starting her own business she would be well-advised to:

A)buy an existing business.
B)work for someone in an existing small business for the next 10 years.
C)buy a franchise.
D)start the business from scratch.

Question 13

Within the small business sector,there is some debate about what in terms of small-business success and failure?

A)the skills needed to be an entrepreneur
B)the role of government
C)how to make a profit
D)how many new small businesses fail each year

Question 14

A(n)is a valuable source of information regarding techniques to reduce a firm's exposure to risk.

A)liability assessor
B)insurance agent
C)union business agent
D)accountant

Question 15

Which of the following would not be helpful in explaining why individuals accept the risks of business ownership?

A)The challenge of taking calculated risks.
B)The sense of self-satisfaction and independence.
C)The potential for profit and wealth.
D)The desire to work fewer hours.

Question 16

Most Canadians find their jobs in:

A)the manufacturing sector.
B)government agencies.
C)large corporations.
D)small businesses.

Question 17

All of the following are characteristics of successful entrepreneurs except:

A)willingness and desire to follow others.
B)action-oriented.
C)tolerant of uncertainty.
D)self-disciplined.

Question 18

A creative person working within a corporation to launch new products and generate new profits is known as a(n):

A)micropreneur.
B)intrapreneur.
C)arbitrator.
D)procrastinator.

Question 19

The largest source of capital for entrepreneurs is usually from

A)venture capitalists.
B)provincial and municipal governments.
C)loan sharks.
D)personal savings.

Question 20

Rockdale College has received a government grant to establish a business incubator.This facility will offer:

A)new businesses low-cost office space with basic business services.
B)local government agencies assistance in obtaining funds for urban renewal.
C)venture capitalists an opportunity to identify new entrepreneurs.
D)area businesses advice on health care benefits for their employees.

Question 21

An examination of the reasons given by people willing to accept the risks of entrepreneurship indicates that:

A)the desire to earn a profit is the only reason most people have for becoming entrepreneurs.
B)the strongest motivator is the desire to be famous and powerful.
C)contrary to popular opinion,most entrepreneurs are not interested in personal achievement.
D)many people become entrepreneurs because they do not enjoy working for someone else.

Question 22

Over 75% of home based employer businesses are in:

A)manufacturing.
B)Ontario.
C)the service sector.
D)bankruptcy court.

Question 23

All of the following are hurdles small businesses face when considering exporting except:

A)there is great deal of required paperwork.
B)financing is often difficult to find.
C)cultural differences are not easily understood.
D)overseas buyers prefer dealing with large corporate bureaucracies.

Question 24

Small businesses often have advantages in international markets.All of the following are advantages many small businesses can offer except:

A)a greater expertise in managing the paperwork required to sell goods in international markets.
B)the ability to provide a wide variety of suppliers.
C)the ability to ship goods more quickly.
D)individualized customer service as opposed to impersonal corporate bureaucracies.

Question 25

An entrepreneurial team consists of:

A)experienced managers from different areas of business.
B)managers with similar skills,abilities,and interests.
C)a group of wealthy investors who share a vision for a product.
D)representatives from management,labour,and the government who work together to solve a company's problems in a creative way.

Question 26

A good business plan will:

A)describe all aspects of the business,including product,the target market,the nature of the competition,and the resources and qualifications of the owner(s).
B)focus on the big picture and omit the small details of operating the business.
C)focus on the nature of the business and the target market,omitting personal information about the owner in order to avoid personality issues.
D)be purposefully vague,since specifics can restrict creativity and flexibility.

Question 27

Which of the following best describes the opportunities available to small businesses in international markets?

A)Higher business costs eliminate the profit opportunities in global markets.
B)Most foreign buyers prefer to deal with large,well-known corporations rather than small businesses.
C)The threat of terrorist activities prevents small businesses from competing internationally.
D)The world market is a much larger,and potentially more lucrative,market than the Canadian domestic market.

Question 28

Chris is an angel investor.This indicates that she:

A)creates business incubators for startup Web-based firms.
B)provides assistance for struggling entrepreneurs.
C)invests her own money in new businesses before they sell stock publicly.
D)is involved in providing startup money for new churches and other nonprofits.

Question 29

When preparing the executive summary section of a business plan,it is important to remember:

A)to list all the qualifications,experience,and education of the entrepreneur.
B)that computer software programs provide the information needed to complete this section.
C)that the goal is to capture the attention of bankers and other investors who receive many business plans every day.
D)that a perfect business plan starts in this section.

Question 30

Anthony,a small business owner,is considering marketing his product in Brazil.If he enters the Brazilian market,he is likely to face all of the following problems except:

A)difficulties in obtaining adequate financing.
B)the heavy burden of bureaucratic paperwork.
C)the cultural differences between Canada and Brazil.
D)convincing foreign firms to do business with a small firm,rather than a large corporation.

Question 31

The management of charities,government agencies,and schools is the management of a business.

A)much the same as
B)better organized than
C)less well defined than
D)much different than

Question 32

Small business owners often struggle in attracting qualified workers.Which of the following does not contribute to this problem? Small firms offer:

A)lower wages than paid by large corporations.
B)limited room for advancement.
C)a lack of challenging jobs.
D)less attractive fringe benefits than offered by larger firms.

Question 33

Intrapreneurs make use of to develop and launch new products and generate new profits.

A)government supplied physical and financial resources
B)old ideas abandoned by entrepreneurs
C)their employer's existing human,financial,and physical resources
D)their own personal financial resources

Question 34

When comparing various types of small businesses,the firms that are easiest to start tend to be those that:

A)offer the greatest security.
B)involve professional services,such as dentistry or veterinary medicine.
C)have the highest failure rates.
D)have the greatest prospect of long-term growth.

Question 35

The goal of an intrapreneur is to:

A)develop new products and generate new profits for the corporation.
B)improve quality control in a corporation's production process.
C)implement cost control policies for existing products.
D)break up an inefficient big firm into a group of smaller,more efficient business organizations.

Question 36

Luis is a partner in a firm that specializes in producing vitamins and health food products.While the business is considered small by Canadian standards,he is attempting to persuade his partner to expand internationally.Luis would list all of the following as advantages of going international except:

A)selling products in other markets can extend their life cycle.
B)expanding internationally can reduce a firm's dependence on their domestic market.
C)exporting can help sell excess inventory.
D)marketing programs benefit from the cultural similarities in prospective markets.

Question 37

Entrepreneurs seeking financial support from bankers and potential investors should:

A)be vague regarding their creative business plans to avoid having their idea stolen.
B)seek their assistance in developing their business plan.
C)ask for a relatively small amount of capital initially,postponing a full funding request until the investors better understand the business concept.
D)create a detailed business plan to help the bankers and investors understand why this business will succeed.

Question 38

Individuals motivated to start a home-based business allowing them to balance the demands of business and family are called:

A)home workers.
B)entremanures.
C)micropreneurs.
D)intrapreneurs.

Question 39

Today,small business ventures are far more capable of expanding globally,with relatively minimal effort and cost because of:

A)the support received from government agencies.
B)the increased level of general business knowledge.
C)the many options that exist for how a small business can enter a global market.
D)web-based business applications.

Question 40

Conversations with small business owners before you start your own business are:

A)a good idea since you can learn from their experiences.
B)not a good idea since every small business person is different.
C)risky since other entrepreneurs may be tempted to steal your ideas.
D)a possible violation of fair trade laws.

Question 41

Web-based businesses:

A)are highly limited in what they sell.
B)only compete with other small businesses.
C)do not compete with bricks-and-mortar businesses.
D)sell a wide variety of items.

Question 42

Kathy,like many others in her extended family,works in the furniture store started by her grandfather.As the business has expanded,she has been frustrated because:

A)suppliers are reluctant to do business with a family-run business.
B)profit margins have increased on household furnishings.
C)of the accounting rules that apply to family businesses.
D)you can't fire family.

Question 43

As a prospective entrepreneur,Gregory benefited from his experience working for an established florist.He now feels that he is ready to start his own shop,but he lacks the necessary capital.Which of the following would best help Gregory achieve his goal of business ownership?

A)Enroll in the closest university and apply for student loans.
B)Open his business and trust that his work experience will bring him success even with insufficient capital.
C)Consider working for a major corporation,live modestly and save until he has sufficient funds to start his business.
D)Offer to take over management of the business,allowing the owner to enjoy some leisure time.

Question 44

A Small Business Management course at a community college may offer entrepreneurs an opportunity to:

A)do a research paper on a topic of interest.
B)try out ideas on a computer simulation before risking real time and money.
C)meet with experienced entrepreneurs with diverse backgrounds and learn from their advice.
D)listen to a qualified instructor solve all of the problems of small business owners.

Question 45

After working as a manager of a small business for several years,Connie has been offered a management position with a local charity.If she accepts the job offer,she is likely to find that:

A)nonprofit organizations are motivated by their desire to help people and so financial management is of little concern.
B)planning is less important to a nonprofit organization.
C)her previous experience will be of little value in her new position.
D)the principles of management are much the same regardless of the type of organization.

Question 46

A group of experienced people from different areas of a business joined together to develop,produce,and market a new product is known as a(n):

A)joint venture.
B)managerial task force.
C)entrepreneurial team.
D)self-directed functional team.

Question 47

Kayla recently quit a job with a large corporation to start her own business.While she realizes that her decision comes with risk,she is excited by the chance to be independent and the challenges of running her own firm.Kayla is an example of a(n):

A)raconteur.
B)intrapreneur.
C)venture capitalist.
D)entrepreneur.

Question 48

Seeking the advice of established small business owners is:

A)only helpful if the person giving the advice has been successful.
B)often valuable since you can from learn from their experiences.
C)not recommended since federal privacy laws could be violated.
D)generally not a good idea since they desire to limit their competition.

Question 49

A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a:

A)financial capitalist.
B)venture capitalist.
C)corporate raider.
D)takeover specialist.

Question 50

Motivated by his desire to operate his own business,Caleb is considering the purchase of an existing business.As he carefully weights this option,he is likely to find that:

A)very few owners of small businesses have any interest in selling.
B)the value of an existing business is determined by what the business owns,what it earns,and what makes it unique.
C)any entrepreneur willing to sell their business is experiencing serious financial problems.
D)his potential for success would greatly improve if he started his own new firm.

Question 51

As a(n)Rick searches for firms in need of funding to achieve their goals.In return for his investment,Rick becomes a part owner in the business.Rick operates as a(n):

A)corporate raider.
B)venture capitalist.
C)securities trader.
D)investment analyst.

Question 52

Employees of small businesses often have greater job satisfaction than do employees of larger firms.One reason for this difference in job satisfaction is that employees of small businesses often:

A)have more job security and better fringe benefits.
B)get more respect from their bosses.
C)receive more vacation time.
D)earn higher wages.

Question 53

Business incubators are government-funded facilities intended to:

A)offer startup firms low-cost office space and basic business services.
B)help rebuild the nation's infrastructure.
C)provide health care benefits for small business owners and their families.
D)assist foreign investors to identify business opportunities in Canada.

Question 54

One way that entrepreneurs can get ideas about new products and services is to ask what question?

A)What do I want,but can never find?
B)How energetic do I want to be?
C)What do I want to do with my life?
D)How much money will I need to support myself?

Question 55

About percent of businesses in Canada have fewer than 100 employees.

A)10
B)98
C)40
D)26

Question 56

To be considered part of a market,an individual must:

A)know the names and addresses of two or more sellers.
B)have both a willingness to buy and the financial resources needed to buy.
C)be a registered buyer.
D)have made a purchase within the last 30 days.

Question 57

Successful entrepreneurs are self-directed.This means they:

A)are self-disciplined and comfortable being their own boss.
B)perform all business operations by themselves.
C)look to others for strength and encouragement.
D)are self-financed with no assistance from others.

Question 58

All of the following are important to creditors as they consider making a small-business loan except:

A)the character of the small-business owner.
B)financial statements prepared by an accountant.
C)the number of elderly in the community.
D)the business plan.

Question 59

The business plan of a new entrepreneur should include all of the following except:

A)name of the company.
B)target market.
C)competitive advantages.
D)capital required.

Question 60

are private individuals who invest their own money in potentially hot new companies before these firms sell stock publicly.

A)Angel investors
B)Corporate raider investors
C)Venture investors
D)Leveraged buyout specialists

Question 61

Self-employed women account for about what percentage of all self-employed persons?

A)one-half.
B)one-quarter.
C)one-third.
D)10%.

Question 62

A detailed written statement that describes the nature of the business,the target market,the firm's competitive advantages,as well as the resources and qualifications of the owner(s)is a(n):

A)professional action plan.
B)profit and loss statement.
C)entrepreneurial mission statement.
D)business plan.

Question 63

Commercial loan officers serve as a resource for small business owners for information regarding risk management.

Question 64

As a small business owner,Tanika can't afford to provide her employees with the high wages and benefits offered by big corporations.One way to retain her employees and create a high level of motivation would be to:

A)empower her employees to develop their own ideas.
B)threaten to fire her existing employees and hire new workers.
C)adopt a policy of promoting the workers who have been employed the longest.
D)hire only family members,since they are more loyal.

Question 65

Which of the following would not be among the disadvantages of working for a small business?

A)Room for advancement.
B)Benefits.
C)Pay.
D)Job satisfaction.

Question 66

An entrepreneur:

A)manages businesses for others.
B)accepts the risk of starting and running a business.
C)manages businesses that operate in multiple countries.
D)has a controlling interest in the ownership of a corporation.

Question 67

All of the following are reasons given for the growth of home-based businesses except the:

A)improvement in job security for employees of large corporations.
B)computer technology.
C)favourable shift in social attitudes toward home-based business owners.
D)desire of micropreneurs to balance work and family.

Question 68

If you have managerial skills and leadership ability,you also possess the personality to be an entrepreneur.

Question 69

Neal,a licensed real estate broker,received notification that his application for a business loan was denied.The bank refused his request because he failed to provide a blueprint identifying the intended target market and competitive strategy.In order to secure a bank loan Neal evidently needs a:

A)business plan.
B)bankruptcy lawyer.
C)venture capitalist.
D)loan advocate.

Question 70

Entrepreneurs often discover that there are many legal and financial issues involved in starting their business.The best way for the small business owner to resolve these issues and protect the firm's resources is:

A)defer making decisions regarding these issues until the company is bigger.
B)to hire a full time lawyer and accountant immediately.
C)seek expert guidance and assistance.
D)for the owner(s)to trust their common sense.

Question 71

Individuals desiring to learn about small business operations would be well advised to learn from other entrepreneurs.

Question 72

As his college graduation nears,Manny has focused his attention on finding full time employment in the export business.He has decided to narrow his job search to jobs with a major corporation employing over 100 people.His job search strategy:

A)indicates that Manny's passion is to fulfill his dream of owning his own business.
B)will likely limit his job prospects since most Canadian exporters are small businesses.
C)makes sense because managerial skills are best developed by working for big firms.
D)is smart because major corporations represent the most important source of employment growth in Canada.

Question 73

A refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

A)consumer collective
B)consumer co-operative
C)market
D)buyer's co-operative

Question 74

Most entrepreneurs prefer working for someone else.

Question 75

Small businesses can provide more personalized service than a large corporation when looking at selling internationally.

Question 76

All of the following are elements of a small business definition except that these firms:

A)have annual receipts of less than a specified amount.
B)have fewer than 100 stockholders.
C)are independently owned.
D)are not dominant in its field.

Question 77

Which of the following would an experienced business owner offer to help someone who is thinking about starting a business venture?

A)Avoid the temptation of buying an existing firm.Build your own reputation and make your mistakes.
B)Gain experience by working for a successful businessperson.
C)Jump in quickly,before the market conditions change and opportunities are lost.
D)Postpone consulting with an accountant or lawyer until you can afford their services.

Question 78

Holiday Shores is an expensive,five-star restaurant with an outstanding reputation.Although located about two miles from a high school,the restaurant does not view the students as part of their market.The restaurant's view is likely correct because:

A)food is a low priority item for most students.
B)the school is more than a mile from the restaurant.
C)the school cafeteria provides all of the food the students require.
D)most high school students can't afford to eat at expensive restaurants.

Question 79

Lamont wants to improve his chances to be a successful entrepreneur and so he has written a business plan.One advantage of developing this plan is that it:

A)will enable him to switch from a sole proprietorship to a corporation without any further paperwork.
B)meets federal reporting requirements of Revenue Canada.
C)forces Lamont to think carefully about all aspects of his planned business.
D)ensures financing will be available from the venture capitalists.

Question 80

Ketan is an intrapreneur for a multinational electronics company.As an intrapreneur Ketan:

A)will use the firm's existing resources to develop new products.
B)will concentrate on creating new ventures that can be spun off to become independent firms.
C)is expected to recruit new managerial talent for his firm.
D)is concerned mainly with improving the firm's public image.