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Midterm Review Flashcards

(80 cards)

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1
Q

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

personal fulfillment

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2
Q

The three primary rewards or incentives for entrepreneurs are

A

independence, personal fulfillment, and profit

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3
Q

An owner-manager who bought out the founder of a firm would be classified as a(n)

A

entrepreneur

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4
Q

Individuals are typically pulled toward entrepreneurship by the hope of obtaining

A

financial rewards

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5
Q

Reluctant entrepreneurs

A

individuals who have entered business as a result of financial hardshp or other severe negative conditions

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6
Q

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

A

firms with more than 100 employees

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7
Q

Risk of business failure

A

drawback of entrepreneurship

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8
Q

A prospective entrepreneur is evaluating the suitability of his own characteristics for an entrepreneurial career. He realizes that he should be prepared to assume

A

moderate risks

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9
Q

Game plan for a business

A

business plan

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10
Q

A business plan should generally project financial and operational aspects of the proposed business for the first

A

3-5 years

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11
Q

Operating Plan

A

where the facilities and location are described in the business plan

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12
Q

A passion for business

A

Something entreprenuers tend to have

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13
Q

The ideal period of life for starting a business is

A

between the mid 20s and mid 30s

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14
Q

Founder

A

A person who starts a business

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15
Q

Microbusiness

A

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

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16
Q

Gazelles

A

Small businesses that have great prospects for growth

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17
Q

Attractive Small Firm

A

A firm that provides substantial profits to its owners

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18
Q

Entrepreneurial team

A

Individuals who work together in the same firm as entrepreneurs

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19
Q

Potential advantages of small entrepreneurial firms

A

Customer focus, quality performance, special niche

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20
Q

Moderate Risk Taking Prospensity

A

Entrepreneurs willingness to assume risks

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21
Q

Business to consumer, business to business, auction sites

A

Major categories of e-commerce businesses

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22
Q

Amazon.com

A

B2C

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23
Q

Revenues from auction sites are mostly from

A

listing fees and commissions on sales

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24
Q

Observational or questioning

A

Primary data collection methods

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25
The owner of a home-based business can establish boundaries between the business and the home by
setting aside specific space for the business
26
E-Commerce
the paperless exchange of business information via the Internet
27
Bricks and mortar
The traditional physical store
28
Investors like a business plan that shows evidence of
a well balanced managerial team
29
Why does electronic commerce benefit small firms?
Without e-commerce, small firms often lack the resources to expand beyond local markets
30
The Internet has brought new life and technology to the old-fashioned notion of
customer service
31
Closeness to raw materials
top priority in locaiton decisions
32
Appreciation of the atmosphere of the community, more extensive knowledge of consumer tastes, greater ability to establish favorable credit arrangements
Potential advantage of establishing a small business
33
Decrease in investment risk
The primary advantage an entrepreneur gains by leasing rather than buying facilities
34
The most important reason to lease rather than buy a facility is
Avoidance of a large cash outlay
35
The functional requirements of a business should determine the
suitability of a building
36
A home based business is located
in the owner's home - costs can be decreased which will increase profits
37
A major advantage of using a computer in the business plan
Spreadhsheets enable the planner to prepare and make changes to the financial reports
38
When making a decision regarding the extent of planning, an entrepreneur should consider
the level of uncertainty of the business
39
Investors and lenders use the business plan to
better understand the type of product or service offered by the new venture
40
The business plan is
a selling document and should be brief - it assures the understanding of a new business, an ongoing process
41
Maximizing potential return on investment
A potential investor's single goal
42
Market-oriented
Plans that appeal effectively to investors
43
Prospectus
A marketing document intended to sell a concept
44
Marketing Plan
A section of the business plan that describes the user benefits of the product or service and the type of market that exists - this is the section which includes the competition
45
Executive Summary
is at the beginning and includes the highlights from various sections of the plan
46
Mission statement
Intended strategy and business philosophy for making the entrepreneur's vision a reality
47
Layman Terms
Should be used when describing the product in teh business plan
48
Business planning
is an ongoing process
49
Business plan software packages
help an entrepreneur think through the important issues in starting a new company
50
When dealing with weaknesses in a business plan
the owner should deal with them and have an action plan
51
Synopsis
the type of executive summary that briefly covers all aspects of the business plan, giving each topic relatively equal treatment
52
Balance - with each member having competence in at least one area
Key to strong management
53
Most of the reasons for failure in many high growth ventures may be traced to
specific flaws in the venture team
54
Sole Proprietorship
owns the business and assumes all losses of the business, the most rudimentary form of business organization, disadvantage is the lack of limits on personal liability
55
Partnership
Owner by two or more people with each person capable of legally contracting for the business - requires that partners are honest, healthy, capable, and compatible with one another. A partner has agency power (can make decisions without asking the permission of the other partners)
56
Corporation
Chartered under state laws, the charter should be prepared by an attorney, permission to incorporate comes from the government - an artificial being. Ownership is more easily transferable than ownership in other forms of organization
57
Stockholders
have an ownership interest in a corporation that does not confer a legal right to manage the firm
58
Strategic Alliance
An organizational relationship that links two separate businesses, they represent promising opportunities for small entrepreneurial firms.
59
Board of Directors
Governing body of a corporation
60
Reciprocation
A sense of obligation ot repay what has been done for you
61
Customer Accessibility
The top priority in location decisions for small businesses
62
Environmental conditions affecting selection of the small business location
Competition, weather and climate, laws and regulations
63
Raw Materials availability factor is particularly important for a
manufacturer.
64
Agency power
the ability of any one partner to legally bind the other partner
65
24/7 e-tailing
open 24 hours a day for internet selling
66
Advisory council
a group that functions like a board of directors but acts only in an advisory capability
67
Precipitating Event
the event that makes the entrepreneur start a business
68
Dehydrated plan
a short form of a business plan that presents only the most important issues and projections for the business
69
Enterprise zones
state designed areas that are established to bring jobs to economically deprived regions through regulatory taxes
70
LLC
Limited Liability Corporation - a form of organization in which owners have limited liability but pay personal income taxes on business profits
71
Lifestyle business
a business that is set up and run by its founder primarily to fit into their lifestlye
72
Critical Risk
a section of the business plan that identifies the potential risks that may be encountered by an investor
73
Nonprofit corporation
A form of corporation that businesses establish to servce civic, educational and charitable purposes but not for generation of profits
74
General Purpose Equipment
machines that serve many functions in the production process
75
Social network
an interconnected system comprising relationships with other people
76
Stock certificate
a document specifying the number the numbber of shares owned by a stockholder
77
Strategic alliance
an agreement between two or more parties to pursue a set of agreed objectives
78
Transaction based model
a business model in which the website provides a mechanism for buying or selling products or services
79
Zoning ordinances
Local laws regulating land use
80
Brick and mortar
the traditional physical store from which businesses have historically operated

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