And financial status answer equity reference ready
Chapter 5 ENTREPRENEURSHIP: STARTING AND MANAGING YOUR OWN BUSINESS
TRUE-FALSE QUESTIONS
a. True
*b. False
Title: ANSWER: T REFERENCE: Entrepreneurship Today LEARNING OUTCOME:
1
3. Entrepreneurs are people with vision, drive, and creativity, who are
willing to take the risk of starting and managing a business to make a
profit.
*a. True
b. False
Title: ANSWER: F REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Multipreneurs are entrepreneurs who start a series of companies.
a. True
*b. False
Title: ANSWER: F REFERENCE: Small Business: Driving America's Growth LEARNING OUTCOME: 3 RATIONALE: Established small businesses are defined as companies that have been in business at least five years and employ at least one, but less than 50, employees.
Title: ANSWER: F REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 RATIONALE: The first step in starting your own business is a self-assessment.
10. The first step in starting your own business is the creation of a unique marketable idea.
Title: ANSWER: T REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4
12. The most common use of a business plan is to persuade lenders and
investors to finance the venture.
*a. True
b. False
*a. True
b. False
Title: ANSWER: F REFERENCE: Managing a Small Business LEARNING OUTCOME: 5 RATIONALE: One way to ease the burden of managing a business is to hire outside consultant.
Title: ANSWER: T REFERENCE: Small Business, Large Impact LEARNING
OUTCOME: 6
17. An advantage of a small manufacturer over a large manufacturer is
the speed with which new products can be introduced to the
marketplace.
*a. True
b. False
Title: ANSWER: T REFERENCE: Small Business, Large Impact LEARNING
OUTCOME: 6
19. One of the reasons small businesses continue to thrive in the United
States is outsourcing.
*a. True
b. False
a. True
*b. False
Title: ANSWER: T REFERENCE: The Small Business Administration
LEARNING OUTCOME: 7
22. The Small Business Administration (SBA) assists small businesses by
providing advice in management and financial matters.
24. Entrepreneurial activities are not influenced by changes in the external environment.
a. True
*b. False
a. True
*b. False
MULTIPLE-CHOICE QUESTIONS
Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: The person who takes the risk of starting and managing a business to make a profit is called an entrepreneur.
3. Jon P. Farmer is the founder of Kolopua Hawaii LLC, a company that markets Pure Hawaiian Air. Bottles of Pure Hawaiian Air contain air that smells like the floral bouquet that greets tourists as they get off the plane in Hawaii. Retailing for about $5 apiece, the bottles are sold at gift shops in Hawaii, as well as to travel agents nationwide who give them to clients. As a(n) _____, Farmer's annual income exceeds $100,000 annually.
Title: ANSWER: D REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1
6. The difference between small business owners and entrepreneurs is
that small business owners: A. are innovators
B. started the business to pursue their idea for a new product or
service
C. are risk takers
*D. accept the status quo and take a short-term view of the future
E. are accurately described by all of the above
8. When he read Chicken Soup From the Soul, Joe Farmer was struck by how many of the stories mentioned the scent of the islands. So Farmer created bottles filled with Hawaiian air and some scented essence beads. When customers shake the bottles up and open the lids, they're transported back to paradise. While many marketing experts did not think that consumers would buy bottles of air, Farmer has earned more than half a million dollars of sale during his first year of operation. Farmer was an example of a _____ entrepreneur.
A. growth-oriented
*B. classic
C. opportunistic
D. risk-aversive
E. debt-based
B. multipreneur
C. intrapreneur
D. growth entrepreneur
*E. micropreneur
Title: ANSWER: E REFERENCE: Entrepreneurship Today LEARNING OUTCOME:
1
11. Many classic entrepreneurs are _____ who start small and plan to
keep their business small.
*A. Multipreneurs
B. Intrapreneurs
C. Multi-venturists
D. Multi-faceted venturists
E. Growth capitalists
Title: ANSWER: B REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Multipreneurs are entrepreneurs that start a series of companies.
Title: ANSWER: C REFERENCE: Entrepreneurship Today LEARNING OUTCOME: 1 RATIONALE: Intrapreneurs are entrepreneurs who apply their creativity, vision, and risk taking within a large corporation rather than starting a company of their own.
16. Gord Larose and his friend David Allan worked in Ottawa at Nortel
Networks, a giant
telecommunications-equipment maker. One Friday afternoon, over a few
beers in Larose's kitchen, they dreamed up a scheme for renting software
over the Internet. Instead of quitting their jobs, they reported to work
on Monday, explained their plan to their boss, and began working to make
their idea a reality. Four years later, their idea has evolved into an
important division of Nortel called Channelware. Larose and Allan are
examples of:
A. interpreneurs
B. multipreneurs
*C. intrapreneurs
D. growth-oriented entrepreneurs
E. Insourced entrepreneurs
Title: ANSWER: E REFERENCE: Characteristics of a Successful
Entrepreneur LEARNING OUTCOME: 2 19. All of the following are
characteristics of an entrepreneurial personality EXCEPT:
A. the willingness to take risks
B. creativity
C. problem solving skills
D. a high energy level
*E. the willingness to be a follower rather than a leader
Title: ANSWER: E REFERENCE: Characteristics of a Successful Entrepreneur LEARNING OUTCOME: 2 20. Which of the following is a characteristic of the entrepreneurial personality?
Title: ANSWER: D REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4
23. Once Arnold Patel had decided he wanted to quit working as a Web
designer for a large advertising agency and go into some kind of
business for himself, he did a self-assessment, which indicated that he
had an entrepreneurial spirit. His next step will be to:
A. determine where the funding will come from
*B. look for customers
C. create a business plan
D. find the idea for his business
E. choose a form of business organization
Title: ANSWER: E REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4
24. Hannah Li wants to quit her job as a legal secretary and start her
own small business. She knows that she will be successful if she can
find the right idea. Where can Li look for ideas for her new
business?
A. a management plan
B. the elements of the company that make it unique
C. an analysis of the market in which the company will operate D. a
financial plan
*E. all of the above
29. Kathy Elliot has decided that she will start an Internet company to sell reliable used cars to customers nationwide. She has decided to use the sole proprietorship business format. Elliot’s next step is to write a formal _____ before she applies for a business loan.
A. venture prospectus
*B. business plan
C. business essay
D. request for SBA publications
E. market perspective
C. persuade customers to buy the new product or service
D. use as a recruitment tool
E. showcase innovative factors to production to make the company a
success
Title: ANSWER: D REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4 33. Once the business plan is finished, the next
step is to:
A. choose a business format
B. locate customers
C. create a promotional campaign
*D. find financing for the business
E. buy all fixed assets needed to operate business
Title: ANSWER: C REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4
36. _____ financing is a form of financing consisting of funds raised
through the sale of stock in a business.
A. Credit
B. Debt
*C. Equity
D. Monetary
E. Venture
38. Jill Hansom borrowed $40,000 from a credit union to start a company that makes and sells peach salsa. Hansom used _____ financing.
*A. debt
B. liquid
C. equity
D. venture
E. entrepreneurial
Title: ANSWER: B REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 41. _____ is financing obtained from investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.
A. Debt financing
*B. Venture capital
C. Equity financing
D. Entrepreneurial capital
E. Corporate stock financing
Title: ANSWER: C REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 RATIONALE: Equity financing is a form of financing consisting of funds raised through the sale of stock in a business.
45. Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. During the development of this high-growth company, Arnold and Bradford attracted a group of investors who purchased stock in their company and provided them with ______ financing.
B. Why are you selling?
*C. What are you going to do with the down payment?
B. Why are you selling?
C. Are there any problems with the business?
*B. Expenses were lower than the owner expected.
C. The owner lacked management expertise.
Title: ANSWER: D REFERENCE: Managing a Small Business LEARNING
OUTCOME: 5 51. One way to ease the burden of managing a business is
to:
A. keep minimal inventory on hand
B. only operate the business 20 hours a week
C. do all the work yourself and hire no employees
*D. hire outside consultants
E. sell a service instead of a tangible product
Title: ANSWER: E REFERENCE: Managing a Small Business LEARNING
OUTCOME: 5
52. One way to ease the burden of managing a business is to hire an
outside consultant. Which of the following is an example of an outside
consultant that might be useful to a small interior design company?
Title: ANSWER: E REFERENCE: Managing a Small Business LEARNING
OUTCOME: 5
55. International trade specialists that buy goods at a discount from
small businesses and resell them abroad are called:
A. business trade unions
B. export management companies
C. domestic channel members
D. commission house brokers
*E. export trading companies
Title: ANSWER: B REFERENCE: Managing a Small Business LEARNING OUTCOME: 5 RATIONALE: Export management companies are international trade specialists that handle all aspects of exporting for its clients.
Title: ANSWER: E REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 59. Which of the following is a reason why small business thrives in the United States?
A. guaranteed profits
B. regular working hours
C. an aversion to success
D. the ability to avoid outsourcing
*E. rapidly changing technology
62. Kirby Frigo has opened a dog grooming business. Frigo, like other
small business owners, probably will experience:
A. guaranteed profits
B. short work hours
C. interest-free loans
*D. burdensome government regulations
E. relief from taxation
Title: ANSWER: C REFERENCE: Small Business, Large Impact LEARNING
OUTCOME: 6
63. All of the following are examples of disadvantages associated with
the ownership of a small business EXCEPT:
A. burdensome government regulations
B. fund-raising difficulty
*C. being your own boss
D. extreme personal commitment
E. limited management skill
Title: ANSWER: A REFERENCE: The Small Business Administration
LEARNING OUTCOME: 7 66. The Small Business Administration (SBA):
*A. helps people start and manage small businesses
B. is a privately-owned company
C. is a financial institution
D. does not have a Web site
E. is accurately described by all of the above
Title: ANSWER: A REFERENCE: The Small Business Administration
LEARNING OUTCOME: 7
67. The Small Business Administration (SBA) offers a broad range of aids
to small businesses. They include: *A. guarantees on loans made by
private lenders
B. entrepreneurial ideas
C. employee recruiting, hiring, and firing
D. the elimination of sales and employee taxation for the first three
years of operation
E. all of the above
Title: ANSWER: A REFERENCE: The Small Business Administration
LEARNING OUTCOME: 7 70. In the management assistance area, the Small
Business Administration (SBA) provides all of the following
EXCEPT:
*A. free college credit courses in management
B. toll-free advice numbers
C. training and educational programs
D. counseling by business development officers
E. free publications on business topics
Title: ANSWER: B REFERENCE: Trends in Entrepreneurship and
Small-Business Ownership LEARNING OUTCOME: 8
71. Which of the following is a trend that is changing the face of
entrepreneurship and small business ownership?
Title: ANSWER: business plan REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 3. Emily Millou is planning to open a bed & breakfast inn. To borrow money from the bank, she should prepare a ______, a formal, written plan that discloses details about her product, markets, competition, and financial status.
Title: ANSWER: equity REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME: 4 4. One form of business ownership involves _____, a form of business financing consisting of funds raised through the sale of stock.
Title: ANSWER: outsourcing REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6 9. A company has used ______ if it hires a mailing house to stuff its multi-part advertising message into envelopes and make sure that its mailings comply with government regulations.
Title: ANSWER: Small Business Administration (SBA) REFERENCE: The
Small Business Administration LEARNING OUTCOME: 7
10. The _____ is the main government agency that assists small
businesses with advice and financial assistance.
Title: ANSWER: a self-assessment to determine whether you have the
personal traits you need to succeed, and if so, what type of business
would be best for you REFERENCE: Ready, Set, Start Your Own Business
LEARNING OUTCOME: 4
3. What is the first step for starting a new business?
Title: ANSWER: to persuade lenders and investors to finance the
venture REFERENCE: Ready, Set, Start Your Own Business LEARNING OUTCOME:
4
4. What is the most common use for a business plan?
Title: ANSWER: The text lists the following four: (1) greater
flexibility, (2) more efficient operation, (3) greater ability to
service specialized markets, and (4) more personal service. REFERENCE:
Small Business, Large Impact LEARNING OUTCOME: 6
9. List three advantages that small businesses have over larger, more
complex companies.
Title: ANSWER: The text lists the following four: (1) limited
managerial skills, (2) fund-raising difficulties, (3) burdensome
government regulations, and (4) extreme personal commitment of the
owner. REFERENCE: Small Business, Large Impact LEARNING OUTCOME: 6
10. List three disadvantages that small businesses have over larger,
more complex companies.
