Question 1

What is the most common source of funds for entrepreneurs?

Accepted Answer

Personal financial resources, such as savings or assets, are often the most common source of funds for entrepreneurs. This is because it can be difficult for new businesses to secure loans or convince investors to provide funding without a proven track record of success. Using personal funds also allows entrepreneurs to have full control over the business without needing to dilute ownership or take on debt. However, this option may not be feasible for everyone, and some entrepreneurs may need to explore other funding sources such as bank loans or venture capitalists.

Question 2

Jeff wants to start a company that makes the medical consent forms patients are required to sign easier to understand.Jeff is a doctor with medical sales experience;his partner Gina has the technical abilities to make the product.Where should they look first for financing?

Accepted Answer

Since Jeff and Gina are just starting out, it is likely that their business idea will not attract larger sources of funding such as venture capital companies or SBICs. The Small Business Administration (SBA) and strategic alliances may be potential sources of funding, but they may also have strict requirements and regulations that may not be suitable for a new startup. Therefore, the best option for Jeff and Gina would be to utilize their personal resources, such as savings or loans from family and friends, to initially fund their business.

Question 3

Jane's Candy Shack has ineffective advertising.Where should she go for help with a promotion program?

Accepted Answer

The answer of Jane's Candy Shack has ineffective advertising.Where should...

Question 4

Which of the following statements about recent trends in franchising is TRUE?

Accepted Answer

According to the passage, franchising is growing rapidly and is projected to account for half of all retail sales. The other options either state that franchising has leveled off or declined in popularity, which contradicts the information given in the passage.

Question 5

Which activity in developing a business plan is the most important?

Accepted Answer

Researching the market is the most important activity in developing a business plan as it helps to determine the viability and potential success of the business idea. It involves identifying target customers, analyzing market trends and competition, and identifying potential opportunities and challenges. This information is essential for making informed decisions about the product mix, location, production plan, and organization chart.

Question 6

The most important part of the small business financial plan is the

Accepted Answer

The cash budget is the most important part of the small business financial plan because it helps the business to plan and manage its cash flow. This includes estimating the amount of cash coming in and going out over a specific period of time, ensuring the business has enough cash to meet its obligations and identify any potential cash shortfalls. Other financial statements and analyses such as the income statement, balance sheet, inventory analysis, and break-even chart are also important, but the cash budget is critical for the day-to-day financial management of a small business.

Question 7

After watching the royal wedding,Susan wants to start her own hat making company in the United States.To help her determine whether this is a good idea,she needs to find the answers to which of the following questions?

Accepted Answer

All of these questions are important for Susan to consider when starting her own hat making company. She needs to identify her potential customers and where they are located, as well as her competitors and how she can make her product stand out. Additionally, she needs to determine the demand for her product and at what price her customers are willing to buy. Considering all of these factors will help her determine whether starting a hat making company in the United States is a good idea.

Question 8

____ are a group of small investors seeking to make profits on companies with rapid growth potential.

Accepted Answer

Venture capitalists are a group of small investors who seek to invest in companies with rapid growth potential in order to make profits. They provide funding in exchange for equity or ownership in the company and often take an active role in the management and growth strategies of the company.

Question 9

Jay wants to start a new business.With which of the following methods will he pay a share of the income from the business in return for the use of trademarks and business formulas?

Accepted Answer

Franchising is the method in which a person pays a share of the income from the business in return for the use of trademarks and business formulas. This allows the franchisee to operate a business under an established brand name and with support from the franchisor. The franchisor provides the business model, marketing materials, and ongoing support while receiving a percentage of the profits in return. Venture capitalism involves selling equity in the business to investors, buying an existing business may include goodwill but doesn't necessarily involve the use of trademarks or business formulas, and industrial revenue sharing typically involves sharing profits with the government or other entities. SBA loans provide funding for a new business but don't involve sharing profits or utilizing trademarks and business formulas.

Question 10

Which of the following is NOT a source of management advice for an entrepreneur?

Accepted Answer

The Securities and Exchange Commission (SEC) is not a source of management advice for entrepreneurs. The SEC is a government agency that regulates securities markets and enforces securities laws, it doesn't provide advice on how to manage a business. Choices A, B, C, and D are all valid sources of management advice for entrepreneurs.

Question 11

Jane's Candy Shack was a quaint shop,in a small town,with high end items that never attracted many customers.Its failure was probably attributable to failure to

Accepted Answer

The fact that Jane's Candy Shack did not attract many customers suggests that they did not do appropriate market research to determine what products and services would be in demand in the local area. Without this research, the shop may have invested in high-end items that did not appeal to the local population.

Question 12

The most significant disadvantage to franchising as a means of acquiring a business is

Accepted Answer

Franchising often requires high start-up costs, including fees, initial inventory, and the cost of building or renovating a facility to meet franchisor standards. These costs can be significant and may require substantial investment or financing, making franchising a potentially risky venture. Additionally, ongoing royalty fees, marketing expenses, and other costs can also add up over time, further increasing the cost of franchising.

Question 13

Jane's Candy Shack is in danger of failing.She needs much consulting help,but she has limited financial resources.She contacts the SBA.She most likely will get help from the

Accepted Answer

The answer of Jane's Candy Shack is in danger of...

Question 14

Why should a new entrepreneur,who has to be careful about how she spends every penny,join the National Federation of Independent Businesses (NFIB)?

Accepted Answer

Joining the National Federation of Independent Businesses (NFIB) offers excellent networking opportunities, which can be invaluable for a new entrepreneur who needs to build connections and relationships within their industry. Additionally, the NFIB advocates for small businesses at the national level and offers resources and advice on navigating government regulations and policies, which can save a new entrepreneur time and money in the long run.

Question 15

The ____ tells how much money is needed to operate a new business.

Accepted Answer

A cash budget is a financial statement that projects cash inflows and outflows for a specific period of time, often monthly or quarterly. It helps in estimating how much cash is needed to operate a new business. The income statement, profit and loss statement, t-account, and balance sheet provide information on the financial performance and position of a business, but do not specifically address the amount of money needed to start a new venture.

Question 16

The most significant change in small business is

Accepted Answer

The rapid emergence of electronic commerce has been the most significant change in small business. With the growth of technology, small businesses have been able to reach a wider audience and expand beyond their traditional markets. E-commerce has also given small businesses access to new tools and platforms to market and sell their products and services. This has led to significant changes in the way small business operates, and has opened up new opportunities for growth and success.

Question 17

The first step for the entrepreneur in planning his or her business is to

Accepted Answer

Engaging in self-analysis is the first step in planning a business. This involves assessing personal strengths, weaknesses, interests, and goals to determine the type of business that would be a good fit, as well as identifying any potential challenges or obstacles that may need to be addressed. Only then can the entrepreneur move on to developing an effective organizational plan and making other important decisions. Forecasting sales revenues, choosing a business location, and developing an organizational chart all come later in the process.

Question 18

The text lists several questions that the business plan should answer for the entrepreneur who is planning to open a business.Which of the following is one of the questions?

Accepted Answer

The answer of The text lists several questions that the...

Question 19

Under the guidance of the ____,veteran business professors and students seeking advanced degrees work with small business owners to help solve specific problems like shoplifting and ineffectual advertising.

Accepted Answer

The Small Business Institute (SBI) is an organization that provides consulting services to small businesses via partnerships between business professors and advanced degree-seeking students. The goal of the partnership is to help small business owners solve specific problems and improve overall operations. The other answer choices, such as the SCORE and SBDC, also provide resources and guidance to small business owners, but they do not specifically involve collaborations between professors and students.

Question 20

Which of the following is NOT a source of management advice for an entrepreneur?

Accepted Answer

The Federal Trade Commission (FTC) primarily focuses on consumer protection and antitrust laws, not on providing management advice to entrepreneurs.

Quiz 9: Managing Start-Ups and New Ventures

What is the most common source of funds for entrepreneurs?

Jeff wants to start a company that makes the medical consent forms patients are required to sign easier to understand.Jeff is a doctor with medical sales experience;his partner Gina has the technical abilities to make the product.Where should they look first for financing?

Jane's Candy Shack has ineffective advertising.Where should she go for help with a promotion program?

Which of the following statements about recent trends in franchising is TRUE?

Which activity in developing a business plan is the most important?

The most important part of the small business financial plan is the

After watching the royal wedding,Susan wants to start her own hat making company in the United States.To help her determine whether this is a good idea,she needs to find the answers to which of the following questions?

____ are a group of small investors seeking to make profits on companies with rapid growth potential.

Jay wants to start a new business.With which of the following methods will he pay a share of the income from the business in return for the use of trademarks and business formulas?

Which of the following is NOT a source of management advice for an entrepreneur?

Jane's Candy Shack was a quaint shop,in a small town,with high end items that never attracted many customers.Its failure was probably attributable to failure to

The most significant disadvantage to franchising as a means of acquiring a business is

Jane's Candy Shack is in danger of failing.She needs much consulting help,but she has limited financial resources.She contacts the SBA.She most likely will get help from the

Why should a new entrepreneur,who has to be careful about how she spends every penny,join the National Federation of Independent Businesses (NFIB) ?

The ____ tells how much money is needed to operate a new business.

The most significant change in small business is

The first step for the entrepreneur in planning his or her business is to

The text lists several questions that the business plan should answer for the entrepreneur who is planning to open a business.Which of the following is one of the questions?

Under the guidance of the ____,veteran business professors and students seeking advanced degrees work with small business owners to help solve specific problems like shoplifting and ineffectual advertising.

Which of the following is NOT a source of management advice for an entrepreneur?