Deck 1: The Entrepreneurial Life

Question 1

An owner-manager is a person who founds a new business.

Answer 1

False

Question 2

According to the definition of entrepreneur given in Chapter 1, owner-managers who buy out founders of existing firms may be classified as entrepreneurs.

Answer 2

True

Question 3

Although Life is Good owners John and Bert Jacobs' line of merchandise is related to leisure pursuits, they cannot partake of them because of the constraints of their fast-growing business.

Answer 3

False

Question 4

Winning a table decoration competition was the precipitating event for launching Table Occasions.

Question 5

"Second-stage" entrepreneurs are entrepreneurs who take over the operations of a successful ongoing business from its founder.

Question 6

A large percentage of small business owners cite their desire to be their own boss as the main reason they left their previous employers.

Question 7

The universally accepted definition of the term small business is based on the number of people employed by the firm.

Question 8

Three primary rewards of entrepreneurship are thought to be profit, independence, and personal fulfillment.

Question 9

Entrepreneurial teams are formed by bringing together two or more persons together who function in the capacity of entrepreneurs.

Question 10

Some estimate that self-employed people are four times more likely to be millionaires than are those who work for others.

Question 11

Persons who leave their leave an undesirable work situation and go into business for themselves in a new country would be described as entrepreneurial refugees.

Question 12

Chris Mittelsdaedt states that "a healthy dose of worst-case-scenario thinking" helps his business succeed.

Question 13

One survey found that 91 percent of small business owners give back to their communities each year through volunteering, in-kind contributions and/or direct cash donations.

Question 14

Researchers at Case Western Reserve University found a strong connection between entrepreneurship and a cavalier, happy-go-lucky attitude toward life and business.

Question 15

An entrepreneurial career can provide an exciting life and substantial personal rewards while also contributing to the welfare of society.

Question 16

The term entrepreneur is understood in this text to refer only to founders of small businesses.

Question 17

A reasonable goal of an entrepreneur would be to "get rich slowly".

Question 18

Between 2006 and 2008, the number of women-owned firms in the U.S. remained fairly constant.

Question 19

A refugee is a person who tried entrepreneurship, failed, and sought refuge in corporate employment.

Question 20

A mechanic who starts an independent garage can best be thought of as an opportunistic entrepreneur.

Question 21

Small and entrepreneurial firms cannot hold their own or gain an edge over successful, more powerful businesses.

Question 22

According to a study conducted by Timmons and Spinelli, 72 percent of respondents stated that the single most important factor in long-term success was high ethical standards.

Question 23

Business opportunities exist for any size firm, as long as they can provide products or services that customers desire.

Question 24

New ventures are more often financed mostly with a founder's personal savings rather than a bank loan or money provided by a venture capitalist.

Question 25

According to Bernard Rapoport, achieving your goals is the important thing - not how you achieve them.

Question 26

The textbook states in chapter one that an entrepreneur is a person who does all the following except:

A) relentlessly focuses on an opportunity..
B) creates value.
C) assumes both risk and reward for his effort.
D) manages a small business for a salary.

Question 27

Franchises offer the most independence for a new entrepreneur.

Question 28

The textbook intends to help move entrepreneurs toward the artisan end of the continuum and away from the opportunistic end.

Question 29

The Seven Habits of Highly Successful People suggests that the most effective way "to begin with the end in mind" is to develop a personal mission statement or philosophy or creed.

Question 30

Microbusinesses are sometimes referred to as lifestyle businesses.

Question 31

Many entrepreneurs are innovators, individuals who are often better at taking inventions or innovations developed elsewhere and putting them into use.

Question 32

Compared to large corporations, small businesses

A) play just as important a part in the economy.
B) attract more attention and make more headlines in the media.
C) are not as important to the well-being of society.
D) are highly visible.

Question 33

New product innovation seldom comes from the world of small business because the large corporations spend large amounts on R&D (research and development).

Question 34

The ideal age for starting a business appears to be between 40 and 50.

Question 35

Small firms are at a great disadvantage when it comes to competing based on customer service.

Question 36

Most entrepreneurs have an external locus of control.

Question 37

The Small Business Administration reports of small firms all of the following except:

A) comprise 99.7 percent of all firms with employees.
B) account for 75 percent of private payrolls.
C) generated 60 to 80 percent of all new jobs over the past decade.
D) represent 97.3 percent of all exporters.

Question 38

Paternalism is a distinguishing characteristic between artisan and opportunistic businesses.

Question 39

Individuals who have entered business as a result of financial hardship or other severe negative conditions are called ____ entrepreneurs

A) refugee
B) artisan
C) reluctant
D) opportunistic

Question 40

It is futile for small businesses to attempt to develop strategies that offer a competitive advantage over larger, more mature businesses.

Question 41

Individuals are typically pulled toward entrepreneurship by the hope of obtaining

A) an easy life.
B) financial rewards.
C) freedom from long hours.
D) job security.

Question 42

A person who starts a business is classified as a

A) founder.
B) general manager.
C) franchisee.
D) marginal-firm manager.

Question 43

A camera hobbyist starts a photographic supplies store. The most obvious reward for this entrepreneur is the opportunity to

A) serve other photography enthusiasts.
B) enjoy satisfying work.
C) be independent.
D) work with people.

Question 44

The daughter of an entrepreneur disliked her father's criticism and eventually decided to quit the family business and show her father that she could start her own business. The daughter is a

A) corporate opportunist.
B) feminist advocate.
C) potential housewife.
D) refugee.

Question 45

When a large business like IBM or General Motors downsizes and lays off workers, some of these displaced employees decide to start their own businesses. They are best described as

A) foreign refugees.
B) welfare profiteers.
C) reluctant entrepreneurs.
D) corporate entrepreneurs.

Question 46

The three primary rewards or incentives for entrepreneurs are

A) independence, personal fulfillment, and profit.
B) love of country, independence, and freedom from long hours.
C) preserving the capitalistic system, an easy life, and financial rewards.
D) serving self, love of country, and independence.

Question 47

Miriam Motif is an example of Stanley and Danko's The Millionaire Next Door. She is ____ more times likely to be a millionaire than those who work for others.

A) two
B) four
C) ten
D) forty

Question 48

A corporate manager chafes under red tape and bureaucratic regulations until finally deciding to start a separate business. The apparent reward being sought is

A) community service.
B) a satisfying way of life.
C) independence.
D) the satisfaction of working with people.

Question 49

Which of the following is classified as an entrepreneur?

A) A manager in a large corporation
B) A financial manager in a small firm
C) An owner-manager who bought out the founder of a firm
D) A salaried technician in a rapidly-growing high-tech firm

Question 50

Sally Forthright, a single mother, opened a florist shop to support her family after losing her job in a corporate layoff. She is _____.

A) a woman without a portfolio
B) a parental refugee
C) a reluctant entrepreneur
D) an independent refugee

Question 51

Gill Balstock started his business after inventing an environmentally-friendly disposal foam container for dairy products. His son Larry now runs the business while Gill pursues other projects. Gill is a(n) ____ and Larry is a(n) ____.

A) founder, follow-on entrepreneur
B) initiator, instigator
C) founder, franchisee
D) founder, second-stage entrepreneur

Question 52

The size standard for small business used in the textbook would exclude firms that

A) have more than 10 employees.
B) have more than 100 employees.
C) have more than two owners.
D) sell products of services outside the local community.

Question 53

Which of the following is excluded from the definition of entrepreneur given in the book?

A) Founder
B) Second generation owner-manager
C) Franchisee
D) A salaried manager who has a flair for innovation

Question 54

A prospective entrepreneur wants to find a career doing what she enjoys most-designing and selling clothing. She might be drawn to try an entrepreneurial venture in order to realize

A) enjoy satisfying work.
B) substantial long-term profits.
C) freedom from control of a managerial hierarchy.
D) a sense of self-esteem as a result of building her own business.

Question 55

Using the textbook's criteria for defining a small business, Portland Ceramics isn't a small business if it

A) is financed by one or only a few individuals.
B) is considerably smaller than larger firms in the industry.
C) is engaged in geographically dispersed operations.
D) has fewer than 100 employees.

Question 56

Lifestyle businesses are so called because they achieve all but which one of the following:

A) promote an easy-going, unstressful lifestyle.
B) permit an owner to follow a desired pattern of living.
C) provide only modest financial returns.
D) usually do not attract investors.

Question 57

Lydia Kurze works as a senior network administrator and is dissatisfied with stifling bureaucratic environment of her job. She considering venturing out on her own as a consultant. If she carries through with her intentions, she would be considered a ____.

A) pariah
B) dilettante
C) emigrant
D) refugee

Question 58

Characteristics of artisan entrepreneurs include all of the following EXCEPT:

A) They are paternalistic.
B) They are good delegators.
C) They use few capital resources.
D) Their time orientation is short.

Question 59

Opportunistic entrepreneurs exhibit which one of the following traits:

A) paternalistic.
B) reluctant to delegate authority.
C) sales efforts are primarily personal.
D) plan for future growth.

Question 60

Valerie Weatherspoon has been described as a "free spirit." She has tolerated but seldom appreciated parental, academic, or even job authority. The factor most likely to lure her to entrepreneurship is

A) profit opportunities.
B) freedom to operate independently.
C) enjoyment of doing what she likes to do.
D) satisfaction in serving the community through the business.

Question 61

A firm that provides substantial profits to its owner is called a(n) ____.

A) franchise
B) high-potential venture
C) attractive small firm
D) lifestyle business

Question 62

When a 32-year-old construction worker launches a construction firm after seven years' experience in that industry, he

A) has experienced a precipitating event.
B) is facing a forced-choice career.
C) is launching his venture during the ideal time of life for starting a business.
D) is part of an entrepreneurial team.

Question 63

Small businesses that have great prospects for growth are called ____.

A) gorillas
B) antelopes
C) jaguars
D) gazelles

Question 64

In terms of willingness to assume risks, entrepreneurs show

A) low risk-taking propensity.
B) moderate risk-taking propensity.
C) high risk-taking propensity.
D) extremely high risk-taking propensity.

Question 65

A professor of entrepreneurship is trying to identify students who are the best prospects for entrepreneurial careers. Based on prior research and especially the work of J. B. Rotter, she is looking for students having a

A) high external locus of control.
B) low external locus of control.
C) high internal locus of control.
D) low internal locus of control.

Question 66

A small firm that is profitable but provides only a very modest return to the entrepreneur is

A) an attractive small company.
B) a high-potential venture.
C) a franchise.
D) a microbusiness.

Question 67

Consistently operating with _____ can set a small business apart as being trustworthy when stories of corporate greed and corruption abound.

A) panache
B) integrity
C) competence
D) temerity

Question 68

Potential advantages of small entrepreneurial firms include:

A) Customer focus
B) Quality performance
C) Special niche
D) All of these

Question 69

In comparison to the general population, entrepreneurs have a

A) higher internal locus of control.
B) lower internal locus of control.
C) higher external locus of control.
D) similar locus of control.

Question 70

One drawback of entrepreneurship is the

A) routine and boring work.
B) requirement that the business pay a minimum wage.
C) need to participate in civic activities.
D) risk of business failure.

Question 71

The ideal period of life for starting a business is

A) between the mid-20s and mid-30s.
B) during the 20s.
C) between the late 20s and early 40s.
D) between 40 and 55.

Question 72

Entrepreneurs often produce innovations related to

A) multiple patents.
B) developing others' ideas.
C) competitive intelligence.
D) market identification.

Question 73

We would expect an opportunistic entrepreneur to be

A) paternalistic.
B) reluctant to delegate authority.
C) unwilling to plan for future growth.
D) well educated in non-technical matters.

Question 74

Amy Mendez is contemplating opening her own business. She should

A) stick to traditional fields for women (such as women's clothing stores or beauty shops) since nontraditional fields are virtually closed to women.
B) realize that many banks will be slow to offer loans because she is a woman.
C) realize that she is going against the flow, in that the proportion of women-owned firms is decreasing slightly.
D) know that women-owned firms are basically part-time businesses.

Question 75

Compared to the general population, entrepreneurs tend to have

A) a passion for business.
B) an external locus of control.
C) an aversion to risk.
D) a high need for affiliation.

Question 76

The following statements are true of women entrepreneurs except:

A) more women are now starting businesses than men.
B) women are majority owners of 40 percent of all U.S. companies.
C) women find access to capital easier than men.
D) women-owned businesses generate nearly $2 trillion in annual sales.

Question 77

An entrepreneurial team is a group composed of

A) individuals who work together in the same firm as entrepreneurs.
B) the entrepreneur plus the firm's banker, CPA, and attorney.
C) the firm's managers.
D) SBA officials who provide counseling to aspiring entrepreneurs.

Question 78

Compared to their larger competitors, small firms may be better positioned to provide good customer service because they

A) do not struggle as much with bureaucracy.
B) tend to have established corporate policies that emphasize a customer focus.
C) have a narrow range of products or services to offer.
D) refuse to be distracted by other developments in the industry.

Question 79

A woman wants to start a construction company. She should realize that

A) women have never successfully started construction businesses having more than two or three employees.
B) people (for example, some male loan officers) may not take her seriously simply because she is a woman.
C) it will be impossible for her to break into the "good old boy network".
D) gender differences are a fact of life (for example, construction is a male industry, beauty shops are usually female owned, and so on), and therefore she should stay with the pattern.

Question 80

A prospective entrepreneur is 36 years old. She realizes that, other things being equal, her age may affect her chances for success. She should

A) go for it-her age is ideal.
B) wait eight to ten years.
C) realize that prospects were much better when she was in her early 20s.
D) try entrepreneurship only if someone else in the family has an independent source of income.