Untitled Deck

Question 1

Should entrepreneurs hire mediocre people?

Answer 1

No, entrepreneurs should avoid hiring mediocre people.

Question 2

What does an entrepreneurial team consist of?

Answer 2

An entrepreneurial team consists of the owner, the financier, and one key employee.

Question 3

Can managers who buy out founders of existing firms be classified as entrepreneurs?

Answer 3

Yes, they may be classified as entrepreneurs.

Question 4

Is Josie a reluctant entrepreneur?

Answer 4

Yes, Josie is a reluctant entrepreneur.

Question 5

What is the primary motivation for starting a new business?

Answer 5

It should not be to make as much money as possible.

Question 6

What does Jesse’s feasibility study indicate?

Answer 6

The plan has a fatal flaw with financing but competition might not be as much of an issue if the native plant landscaping is growing with the buyers.

Question 7

What is an example of a global trend?

Answer 7

The E.U. declares an increase in tariffs on all agricultural goods.

Question 8

What type of strategy is Marketplace Farms relying on?

Answer 8

Marketplace Farms is relying on a cost-based strategy.

Question 9

Why do many direct sales organizations suggest part-time selling?

Answer 9

The business can be tested cheaply and expanded incrementally.

Question 10

What type of small business does Bailey have?

Answer 10

Bailey has a lifestyle business.

Question 11

What is skimming in a business context?

Answer 11

Skimming refers to understating income or claiming personal expenses as business expenses.

Question 12

What follows when a company delivers an excellent product with excellent service?

Answer 12

Customer satisfaction and healthy sales are likely to follow.

Question 13

What does opportunity recognition refer to?

Answer 13

It refers to the way entrepreneurs identify new products or services that may lead to promising businesses.

Question 14

What characterizes the automotive industry in the United States?

Answer 14

It is characterized by high barriers to entry.

Question 15

What is the most important key to ethical performance in a small business?

Answer 15

The personal integrity of the founder or owner.

Question 16

What type of firm was Jobs and Wozniak’s business before moving out of the garage?

Answer 16

It would have been labeled as an attractive small firm.

Question 17

What is an example of unethical employee behavior?

Answer 17

Taking unjustified sick leave.

Question 18

What describes Drs. James and Janet Baker’s startup?

Answer 18

They began with a problem in mind or a pain they could relieve.

Question 19

How would Michael Porter explain Bob and Shirley’s situation with their bed-and-breakfast?

Answer 19

The focus strategy was imitated.

Question 20

What type of team are Bill Gates and Steve Ballmer considered?

Answer 20

They are considered an entrepreneurial team.

Question 21

What is Naked Sports Gear’s dedication an example of?

Answer 21

It is an example of a sustainable small business.

Question 22

What are the two broad strategies for building a competitive advantage?

Answer 22

They are cost-based and differentiation-based strategies.

Question 23

What describes employees starting their own businesses after layoffs?

Answer 23

They are best described as reluctant entrepreneurs.

Question 24

How are resources best described?

Answer 24

They are those basic inputs that a firm uses to conduct its business.

Question 25

What is an eBay retailer selling counterfeit goods violating?

Answer 25

They are violating laws related to intellectual property.

Question 26

What is the most common source of new product ideas for small business startups?

Answer 26

Prior work experience.

Question 27

What is a paradigm shift?

Answer 27

It is a change in how we fundamentally see a situation.

Question 28

When can a focus strategy erode?

Answer 28

When the target segment's differences from other segments narrow.

Question 29

Why would Floyd want to monitor his employees' Internet activity?

Answer 29

Such activity hinders workplace productivity.

Question 30

What is ethical imperialism?

Answer 30

It is the application of U.S. standards to ethical issues clouded by cultural differences abroad.

Question 31

What is a drawback of SWOT analysis?

Answer 31

Its focus on present conditions.

Question 32

What has Noland found in his market?

Answer 32

He has found an opportunity sweet spot.

Question 33

How would Michael Porter explain the drop in attendance at O-MY-U games?

Answer 33

Demand disappeared.

Question 34

What personality does Ben have?

Answer 34

Ben has an entrepreneurial personality.

Question 35

What can financial reports sometimes be without being illegal?

Answer 35

They can be misleading.

Question 36

What does an evaluation of the general environment help identify?

Answer 36

It helps identify a trend that could be used for a possible startup idea.

Question 37

What does the U.S. manager's belief about access fees reflect?

Answer 37

It reflects a sense of ethical imperialism.

Question 38

What factor lures Valerie to entrepreneurship?

Answer 38

The freedom to operate independently.

Question 39

What happens when the bargaining power of suppliers increases?

Answer 39

It decreases both the attractiveness and the profitability of the target market.

Question 40

What characterizes the fast food hamburger industry?

Answer 40

It is characterized by intense rivalry.

Question 41

What does Abraham Lincoln's actions demonstrate?

Answer 41

Integrity and responsibility.

Question 42

What is Darlene's competitive edge?

Answer 42

Quality performance.

Question 43

What are ethical issues?

Answer 43

They are questions of right and wrong.

Question 44

What should be considered first in an outside-in analysis?

Answer 44

The general environment.

Question 45

What does Isabella possess?

Answer 45

Isabella possesses entrepreneurial alertness.

Question 46

What does a computer technician recognizing a need for better designs have?

Answer 46

He has entrepreneurial alertness.

Question 47

What does Isabella possess when she listens for business ideas?

Answer 47

entrepreneurial alertness.

Question 48

What is the term for a computer technician recognizing a need for more aesthetically pleasing computers?

Answer 48

entrepreneurial alertness.

Question 49

What is an effective way for an entrepreneur to establish legitimacy?

Answer 49

to insist on professional behavior from all customer-contact employees.

Question 50

What change did Julie make to her bed and breakfast inn business?

Answer 50

combining two businesses into one to create a market opening.

Question 51

What kind of small business does Adam have?

Answer 51

high-potential venture.

Question 52

What does refusing to pay a bribe in a common practice country exemplify?

Answer 52

integrity.

Question 54

Nonfamily employees in a family business may be caught in the crossfire between feuding family members.

Answer 54

True

Question 55

An ownership interest does not automatically confer a right to act for or to share in the management of a corporation.

Answer 55

True

Question 56

A business plan should always be written before deciding to go forward with a startup business idea.

Answer 56

False ## Footnote A business plan is not always needed as what matters is not writing a plan, but implementing it.

Question 57

As part of the valuation process, a buyer should scrutinize the seller's balance sheet to see whether asset book values are realistic.

Answer 57

True

Question 58

Even if family members lack the capability to run the business, an entrepreneur should always select a successor from this pool of talent.

Answer 58

False ## Footnote When capable family members are not available, the entrepreneur may have to bring in outside leadership to avoid a decline in firm performance.

Question 59

Which suggestion is the most critical when hiring a consultant to review a business plan?

Answer 59

Have a legal contract that specifies exactly what will be done for what price.

Question 60

The section of the marketing plan which describes the entrepreneur's approach to creating customer awareness of the product or service is the:

Answer 60

promotion section.

Question 61

The purchase price of a business is determined by negotiation between:

Answer 61

buyer and seller.

Question 62

Richard is trying to figure out how many units of his product his new business could reasonably expect to sell in its first year. What is he working on?

Answer 62

sales forecast.

Question 63

Darin is assembling a team of experts to help him through the process of evaluating a franchise opportunity. This team should include:

Answer 63

an attorney, an accountant, and a banker.

Question 64

Oliver figured if people were willing to pay for bottled water, they would also be willing to pay for bottled air. What has Oliver forgotten?

Answer 64

customers will buy only if they have unsatisfied needs.

Question 65

An inherent problem for couples involved in a family business is that:

Answer 65

conflicts in the business tend to carry over into family life.

Question 66

Joel recently opened a neighborhood grocery. What has he learned?

Answer 66

a business provides a bundle of satisfaction to its customers, not just the product they have bought.

Question 67

Brandon always came in second in various aspects of life. What was he likely paralyzed with fear about?

Answer 67

fear of failure.

Question 68

Collin's Classic for Children with Cancer is a 501(c)3 nonprofit corporation that sells shirts. How will the organization be taxed?

Answer 68

It is not taxed.

Question 69

Martina's franchise agreement allows her to open up to seven new stores within a 100-mile radius of the first one. How is Martina best described?

Answer 69

an area developer.

Question 70

In the analysis of a market, what should the customer profile include?

Answer 70

detailed discussion of major customer benefits provided by the product and/or service.

Question 71

McDonald's corporation helps select the location for a new restaurant and provides financial assistance, training, marketing, and products. What type of franchising does McDonald's engage in?

Answer 71

business format franchising.

Question 72

Why would a small business conduct less marketing research than a larger, established firm?

Answer 72

Marketing research is expensive.

Question 73

When evaluating the financial data of a 10-year-old business that is being considered for purchase, which issue will be of least concern?

Answer 73

Not having the books for Years 1-5 due to a fire.

Question 74

It is most important that the marketing plan:

Answer 74

describe how the firm will reach and service customers.

Question 75

A good business plan leads to a successful company when the entrepreneur and management team:

Answer 75

effectively execute the plan.

Question 76

Traditionally, marketing philosophies have been categorized as:

Answer 76

consumer-oriented, production-oriented, and sales-oriented.

Question 77

A common problem for a founder in passing the business on to a daughter or son is:

Answer 77

deciding whether the child has the necessary temperament and ability.

Question 78

In addition to the regular monthly payment of a percentage of gross sales to her franchisor, what is Wilma required to submit?

Answer 78

a smaller percentage for advertising costs.

Question 79

Allan opened a hot dog stand in Central Park, New York City. What kind of business is this?

Answer 79

An owner-managed business.

Question 80

In a family business, how are the interests of the family and the interests of the business best described?

Answer 80

overlapping.

Question 81

Annabell has been granted the right to conduct business according to specified methods and terms of another party. Who is Annabell?

Answer 81

a franchisee.

Question 82

Sewell Motors strives to treat the customer as its number one priority. What marketing philosophy does Sewell Motors subscribe to?

Answer 82

consumer-oriented.

Question 83

The short plan would have the least amount of information about:

Answer 83

supporting documentation.

Question 84

To determine credit card average purchases, what type of data are managers conducting marketing research by collecting and analyzing?

Answer 84

secondary data.

Question 85

Fran and Bob own and manage a cleaning service. What is a potential advantage of this arrangement?

Answer 85

it affords the opportunity to share more of their lives and build something together.

Question 86

Sister Mary Cupcake has partnered with the management of the toll road to operate her stores in the travel plazas. What is this arrangement an example of?

Answer 86

piggyback franchising.

Question 87

Jamie has decided to start a franchise. What revenue model would typically be required?

Answer 87

licensing.

Question 88

Robbie's financial advisor referred a customer to Robbie's new business. What concept obligates Robbie to return the favor?

Answer 88

reciprocation.

Question 89

Which group would be the most interested in a business plan for a new venture?

Answer 89

Lenders.

Question 90

The industry, target customer, and competitor analysis section should:

Answer 90

present the opportunity and demonstrate that a market segment is understood.

Question 91

Rhoda describes her typical customer as female between the ages of 22 and 35 with at least two years of college and a household income above $50,000 annually. What is she using to describe her customers?

Answer 91

demographic variables.

Question 92

The sources and uses table is a part of the ___________ of the business plan.

Answer 92

offering section.

Question 93

Investors who review business plans typically:

Answer 93

cannot read through all they receive.

Question 94

Bella decided to hire a nonfamily member as her successor instead of selecting one of her children. What might explain her decision?

Answer 94

Bella wanted to bring in new skills and expertise.

Question 95

The ___________ type of executive summary is better suited to a business that intends to market a new product or enter a new market.

Answer 95

narrative.

Question 96

After working together for a few months, disputes begin to arise between two of the young company's leaders. What is the owner's best action?

Answer 96

let one or both of the individuals go.

Question 97

Martin is creating the part of his business plan that includes the name, address, website, and logo of his company. What is he working on?

Answer 97

the cover page.

Question 98

Vicenzo is the sole owner and manager of a startup company. What challenge does he face as the business grows?

Answer 98

He finds it more difficult to fulfill the needs of all the management positions.

Question 99

What part of his business plan includes the name, address, website, and logo of his company?

Answer 99

The cover page.

Question 100

What should Vicenzo do as his startup company grows and he finds it difficult to manage?

Answer 100

Hire a management team with expertise in complementary areas.

Question 101

What should the product/service plan section include?

Answer 101

A description of the company's own product or service.

Question 102

How is ownership in a corporation characterized?

Answer 102

It is more easily transferable than ownership in other forms of organization.

Question 103

How can an entrepreneur best build social capital?

Answer 103

Using reciprocation.

Question 104

What will Dylan receive as proof of ownership after purchasing stock in a new corporation?

Answer 104

A stock certificate.

Question 105

What is the most likely question in the venture capitalist's mind after John presents his business plan?

Answer 105

What is the demand for the product?