Question 1

Many new businesses are formed as a result of an entrepreneur's previous work experience.

Accepted Answer

Another source of skills for a new business comes from your work experience.

Question 2

Talking with retired business executives can generate new business ideas for start-ups.

Accepted Answer

Great insight can be gained from individuals whom the entrepreneur respects or those who have been successful in founding a business.

Question 3

New businesses are more likely to be successful when an entrepreneur creates a product or service before there is a need in the marketplace.

Accepted Answer

Entrepreneurs should list and evaluate their own personal skill sets and then carefully analyze the market and look for a gap, or some need that is not being met effectively. Finally they need to compare their ability to fill those gaps with the opportunity that seems to be available.

Question 4

Entrepreneurs who understand the industry can access market opportunities more than entrepreneurs who do not understand the industry.

Accepted Answer

First, the founder should list his or her skills. Next, the founder should conduct an analysis of the market.

Question 5

A person's outdoor activities may have an unique skill set that could improve his or her success in business.

Accepted Answer

If there is a great passion associated with hobbies or activities, that passion can help the success of a new business. The avid skier who opens up a ski shop, the distance runner who opens up a running store, and the ham radio operator who becomes a radio equipment dealer are all examples of hobbies leading to a business.

Question 6

Brainstorming works best in formal groups.

Accepted Answer

Brainstorming sessions work well in informal groups.

Question 7

The process of generating linear ideas is done in a single session.

Accepted Answer

The process of generating ideas is not something that is done in a single sitting. Instead, it takes time, interaction, consideration, evaluation, and iteration.

Question 8

If an individual owner really understands the market, he or she should be able to describe the business to investors succinctly in 10 minutes.

Accepted Answer

The potential business owner should be able to describe the business in less than two minutes.

Question 9

Conducting a gap analysis will help a potential business owner to clearly define the business opportunity.

Accepted Answer

One form of a gap analysis is when individuals identify an opportunity that exists and defines it.

Question 10

The last column in a gap analysis records the perceived deficit or gap.

Accepted Answer

In the last column you should qualitatively compare your skills and resources with the perceived requirements of that particular business and record the perceived deficit or gap.

Question 11

The discussion in the book of threats to profit margin states the firm could lose money and still survive.

Accepted Answer

A significant threat to the success of the new venture is its ability to establish and maintain a high-margin product or service.

Question 12

The discussion in the book of threats to sales generation schemes states that a new business must sell to as many customers and make an effort to obtain repeat business.

Accepted Answer

A new venture must have the opportunity to sell too many customers and to obtain repeat business.

Question 13

According to the book, new product ideas for small business start-ups originate from all of the following EXCEPT:
A) prior work experience
B) personal interests and hobbies
C) educational background
D) existing records of a business

Accepted Answer

New product ideas for small business start-ups originate from hobbies and activities, education, and prior work experience.

Question 14

An example of an idea for a new start-up from a hobby is _________.
A) a sports card collector who bought and sold cards for a year to build a personal collection, deciding to become a sports card dealer
B) a computer salesperson seeing the possibility of opening a new electronic store in a different part of the city
C) a purposeful exploration to find a new idea
D) a baker who tosses ingredients together to see what they taste like

Accepted Answer

If there is a great passion associated with hobbies or activities, that passion can help the success of a new business. The avid skier who opens up a ski shop, the distance runner who opens up a running store, and the ham radio operator who becomes a radio equipment dealer are all examples of hobbies leading to a business.

Question 15

Potential generation of new business ideas occurs:
A) when dismissing a promising idea
B) when copying existing business
C) automatically
D) because of the process of identifying skills and opportunities in the market

Accepted Answer

An individual makes a rational evaluation of a business opportunity and its potential instead of reacting in a knee-jerk manner to what appears to be an opportunity or, even worse, quickly dismissing a promising idea.

Question 16

According to the book, new product ideas for small business start-ups originate from all of the following EXCEPT:
A) prior work experience
B) personal interests and hobbies
C) brainstorming
D) existing records of a business

Accepted Answer

New products ideas for small business start-ups originate from hobbies and activities, education, and prior work experience.

Question 17

Effective brainstorming has rules that should be followed in order to be most effective. Which of the following is NOT one of the rules of brainstorming?
A) carefully examine each possible option before considering another
B) include friends and family members in the group
C) avoid evaluating ideas that are contributed
D) generate ideas related to a specific topic or problem

Accepted Answer

Brainstorming is a creative process where individuals (friends and family members) are brought together to come up with ideas about a specific topic or problems, with little effort given to evaluating the true potential.

Question 18

Which of the following is the definition of brainstorming?
A) a creative process whereby an individual is asked to develop ideas followed by evaluation of each potential idea
B) a simple process of systematically examining the difference between what is expected and what occurs
C) an imaginative process whereby a group of individuals are brought together and asked to generate ideas with little or no effort made to evaluate the potential for each idea
D) rational decision making by a group of individuals

Accepted Answer

Brainstorming is a creative process where individuals are brought together to come up with ideas about a specific topic or problems, with little effort given to evaluating the true potential.

Question 19

According to the book, there are four specific threats to achieving business success. Which of the following is NOT one of the threats mentioned in the chapter?
A) high degree of risk
B) competitors
C) sales generation scheme
D) operational financing

Accepted Answer

Threats to business success include profit margin, sales generation schemes, competitors, and operational financing.

Question 20

Assume you're in the process of conducting a gap analysis. Which of the following statements you hope to find out at the conclusion of your analysis?
A) In one business idea, risk is about equal or less than the rewards.
B) You have fewer financial resources than are required.
C) Your business will require more time than you have available because you are a full-time student.
D) All of these

Accepted Answer

The level of risk needs to be commensurate with the rewards and within the tolerance level of the individual involved in the business founding.

Quiz 3: Business Idea Generation and Initial Evaluation

Many new businesses are formed as a result of an entrepreneur's previous work experience.

Talking with retired business executives can generate new business ideas for start-ups.

New businesses are more likely to be successful when an entrepreneur creates a product or service before there is a need in the marketplace.

Entrepreneurs who understand the industry can access market opportunities more than entrepreneurs who do not understand the industry.

A person's outdoor activities may have an unique skill set that could improve his or her success in business.

Brainstorming works best in formal groups.

The process of generating linear ideas is done in a single session.

If an individual owner really understands the market, he or she should be able to describe the business to investors succinctly in 10 minutes.

Conducting a gap analysis will help a potential business owner to clearly define the business opportunity.

The last column in a gap analysis records the perceived deficit or gap.

The discussion in the book of threats to profit margin states the firm could lose money and still survive.

The discussion in the book of threats to sales generation schemes states that a new business must sell to as many customers and make an effort to obtain repeat business.

According to the book, new product ideas for small business start-ups originate from all of the following EXCEPT:

An example of an idea for a new start-up from a hobby is _________.

Potential generation of new business ideas occurs:

According to the book, new product ideas for small business start-ups originate from all of the following EXCEPT:

Effective brainstorming has rules that should be followed in order to be most effective. Which of the following is NOT one of the rules of brainstorming?

Which of the following is the definition of brainstorming?

According to the book, there are four specific threats to achieving business success. Which of the following is NOT one of the threats mentioned in the chapter?

Assume you're in the process of conducting a gap analysis. Which of the following statements you hope to find out at the conclusion of your analysis?