STS 2500 Quiz 2 – Flashcards
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It is a minor portion of all current entrepreneurship
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Which of the following does NOT hold true of part-time self-employment?
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Stand retailing
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Full-time approaches include all of the following EXCEPT
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Doing a business plan
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Nowadays, the conventional wisdom is that if you are serious about starting a business, you ought to start a business full time and prepare for it by
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Estimates suggest that a business plan may take anywhere from 10 to 20 hours or more if you are new to business
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Which of the following statements about a business plan is false?
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When there is enough time and resources to get the entire business going
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All of the following are situations in which it might make better sense to undertake a part-time business EXCEPT
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The more time and energy you spend preparing for a small-scale part-time business, the shorter it takes to make a profit
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Which of the following statements about the key considerations for part-time small business start-ups is false?
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Zoning challenges
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What is the greatest problem that home-based entrepreneurs face?
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Variance
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Permission from a government organization to act differently than the laws state is known as
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Informational Web site
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An internet site designed to introduce and explain a business to others is known as
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B2B e-commerce is larger than B2C e-commerce
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Identify the correct statement about B2B.
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An RSS feed sends whatever Web material you specify to subscribers to that feed
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Identify the correct statement about RSS feeds.
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Reciprocal link
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A listed, live connection to a different Web site, which in turn displays a similar link to the first Web site is a(n)
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Always working "on the road" thereby enhancing productivity
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Which of the following is NOT an advantage of home businesses?
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high cost of getting started
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All of the following are disadvantages of home retailing EXCEPT
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they need to be built in places where there is less traffic
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All of the following relate to "stand retail" EXCEPT
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the to-do list
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The key device for managing time for part-time business individuals is
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the government and customers
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The two key groups outside your business with whom you must deal with as part-time business owners are
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Registration
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____ refers to information provdied to the government concerning the existence of, name of, nature of, and contact information for your business.
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the ability to make money to sustain the business
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All of the following are challenges of being a part-time entrepreneur EXCEPT
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When trust is low and employees lack sills
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Delegation does NOT make sense in which of the following situations?
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outsourcing
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Contracting with people or companies outside your business to do work for your business refers to
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bootstrapping
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All of the following are major concerns of moonlighting EXCEPT
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stand retailing
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"Light a Candle" can be described as
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conflict of interests
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If Elizabeth starts to take days off from work to staff the kiosk at the flea market, she may be facing
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consignment stores
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If Elizabeth wants to have a full-time sale with only part-time involvement, she should consider
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Stand retailing
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Which of the following is NOT a path to full-time business ownership?
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franchise
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A legal agreement that allows a business to be operated using the name and business procedures of another firm is referred to as a
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earn-outs
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Purchases of existing businesses may occur through __ in which the business is bought over a period of time with money earned from the business.
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the access to revolving credit line
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All of the following are advantages of a start-up EXCEPT
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absence of initial name recognition
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Which of the following is a disadvantage of a start-up?
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Asset
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__ refers to something the business owns that has economic value or is expected to have economic value in the future.
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revolving
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A(n) ___ credit is a credit agreement that allows the borrower to pay all or part of the balance at any time; as the loan balance is paid off, it becomes available to be borrowed again.
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experience
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The specific concept that leads to a start-up business usually comes from the ___ of the person starting the business.
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business incubator
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A ___ is an organization that provides financial, technical, and managerial help to start-up a business.
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mentoring programs
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In ___, executive volunteers contribute their time and energy in assisting start-up and struggling small businesses as a public service.
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the business is critically examined by outsiders.
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When a small business start-up secures outside investment, one thing it accomplishes is that
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obtaining and maintaining sufficient cash
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The single greatest hurdle to a successful start-up is
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Partners may provide capital, equipment, or advice.
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In which way wil working with a partner reduce the risk of a start-up?
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Purchasing a business often requires less cash outlay than for creating a start-up.
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Which of the following is an advantage to buying an existing business?
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Existing managers and employees resisting change.
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Which of the following is a disadvantage of purchasing an existing business?
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Developing a brief business plan for the acquisition
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Identify the statement that is not a part of the steps which make up the process of due diligence.
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mission statement analysis
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Financial statements, in preforming due diligence, should include all the following EXCEPT a(n)
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Discounted cash flow
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___ analysis is based on the concept that the longer you h ave to wait to receive money, the less valuable it is right now.
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The application of asset valuation methods to business valuation is similar to having an annuity
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Which of the following statements about asset valuation methods is false?
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depreciation is an arbitrary, but nonsystematic, method of transferring asset value to expense.
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All of the following are major problems with using book value EXCEPT
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the earnings multiple
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The ratio of the value of a firm to its annual earnings is called
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heuristics
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are the rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristic of the business.
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The agreement does not require the franchisee to pay a fee for the right to enter into the business.
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Identify the statement that is not essential for an agreement to constitute a franchise.
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assuming that the leadership of the business must come from within the family
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To avoid having the diversity of values, goals, and motivators from becoming the source of such intrafamily strife, you and the other family business members should respect one another's differences by all of the following ways EXCEPT
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consignment business.
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Given that Tavanna has no inheritance possibility, all of the following are other options you could offer her for full-time business EXCEPT
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Clean slate
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Which of the following would you offer Tavanna as an advantage for starting a new business?
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Starting her business without any other founders to avoid conflict
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Based on what you have learned from this class, which of the following should Tavanna NOT do to increase her chance of start-up success?
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You give up control of marketing and operations
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Tavanna brought with her a franchise business packet. She likes the idea but is unsure what might be its disadvantage?
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Difficulty in determining the worth of the business
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If Tavanna were to buy an existing business, which of the following disadvantages should you point out?
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Strategy
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__ is the idea and actions that explain how a firm will make its profits.
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imitative; innovative
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Most small businesses are more __ than ___.
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involves reviewing and confirming the prestrategy decisions that define your firm and your goal for it.
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The first step of the small business strategy planning process
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customers; benefits
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The second step of the small business strategy planning process is considering with
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industry analysis
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The tool appropriate for the third step of the small business strategy process to study the dynamics and trends of your industry is the
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involves determining the best strategic direction and strategy for the firm
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The fourth step of the small business strategy planning process
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entry wedge
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An opportunity that makes it possible for a new business to gain a foothold in a market refers to
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NAICS and SIC
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What are the two major classification systems that code industries?
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Innovative strategy
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An overall strategic approach in which a firm seeks to do something that is very different from that of what others in the industry are doing is called a(n)
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market
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A(n) ___ is the business term for the population of the customers for your products or services.
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Scale; scope
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__ refers to the size of the market whereas __ refers to its geographic range.
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passionate customers
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What types of customers are likely to generate more potential customers than any other type?
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learning
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Value benefits can include all of the following EXCEPT
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credit
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Cost benefits can come from all of the following EXCEPT
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industry dynamics
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Changes in competitors, sales and profits in an industry over time is called
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Introduction, growth, maturity, decline, and death
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Which of the following represent the five stages of industry life cycle?
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shake-out
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A type of life cycle stage following a boom in which there is a rapid decrease in the number of firms in an industry is the
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gross profit
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Which of the following refers to funds left over after deducting the cost of goods sold?
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industry analysis
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A research process that provides the entrepreneur with key information about the industry, such as its current situation and its trends is called
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net profit
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The amount of money left after operating expenses are deducted for the business refers to
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differentiation
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A type of generic strategy aimed at clarifying how one product is unlike another in a mass market refers to ___ strategy.
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characteristics of the business that give it an advantage over others in the industry
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In SWOT, strengths are
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Competitive advantage
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Which of the following refers to the particular way a firm implements customer benefits that keeps the firm ahead of other firms in the market?
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an industry analysis
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The first thing that Amy and her friends need to do to pursue their strategy is to perform
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Imitation and innovation
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Identify the two market decisions that Amy and her friends need to make.
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Parallel competition
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Using the degree of similarity, Amy's concept of laundromat with a workout space can be described as
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Flee
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When performing a SWOT analysis, where Amy's business threats meet her business weaknesses, what should her strategy option be?
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Growth rate
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Which of the following represents a business plan concern of silent partners/angel investors?
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Intellectual property protection
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___ represents a business plan concern of joint venture partners.
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Monitoring compliance
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Which of the following is NOT a business plan concern of bankers?
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when outsiders expect it; for internal understanding
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There are two circumstances under which creating a business plan is absolutely necessary: (1) __ and (2) ___.
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250-500 words
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The length of an executive summary should be
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they talk in terms of what will make a difference for the customer or the industry
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All of the following concern taglines EXCEPT
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executive summary
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A one- to two-page overview of the business, its business model, market, expectations, and immediate goals represents a(n)
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mission statements give the firm's major business goal, which can be stated quantitatively or qualitatively, but always with a time period
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Identify the correct statement about the 5-M Model.
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40
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The classic business plan contains __ pages that include financials and appendixes.
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proprietary technology
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A product or service that is kept as a trade secret or is protected legally using patents, trademarks, copyright, or service mark is called a
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total population of people or firms to whom you plan to sell
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The market refers to the
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harvesting the business plan
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A good marketing strategy focuses on all of the following ideas EXCEPT
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R&D
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Which of the following refers to the part of a business that is focused on creating new products or services and preparing new technologies, ideas, products, or services for the firm's market?
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SEC filing statement
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Which of the following financial statements is NOT expected in the business plan?
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to provide supporting information that helps detail the key selling points of your plan
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What is the goal of appendixes?
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screening plan
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Which of the following gives the basic overview of a firm and a detailed look at the financials?
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how many others are already working with you?
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All of the following are key things an influential person looks for in your business plan presentation EXCEPT
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cash flow and cash cycle
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Which of the following would represent Mr. Johnson's interest in Connie's business plan?
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amounts and schedules for returns
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If Connie gets her family and friends involved as investors, which of the following would be their concern or interest?
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25
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Connie shops are established businesses and so Connie's business plans could/should be __ pages of text.
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the regulatory limitations
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Connie needs to know that all of the following are key components of a business plan she should include EXCEPT
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experiencing deficit
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Connie should be aware of which of the following risks that may cause Mr. Johnson to evaluate her plan negatively?
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tangible; intangible
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Goods are ___, while services are ___.
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total product
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Which of the following includes the entire bundle of products and services that you offer?
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augmented product
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Identify the product that has features which differentiate it from the competition but is still closely related to the core product.
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target market
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The group of people on which a market focuses promotion and sales efforts is called a
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same as your product name or your name
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Which of the following is NOT the best option when naming your company?
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idea generation
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Which of the following is the first stage of the new product development process?
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idea screening
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In the new product development process, what stage comes after idea generation?
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idea evaluation
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This is an exhaustive process of specifying the details of each idea's technological feasibility, its cost, how it can be marketed, and its market potential.
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the Internet makes it easier to find companies willing to bid on and build prototypes
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Which of the following statements about prototypes is true?
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commercialization
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___ is the process of making the new product available to consumers.
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introduction, growth, maturity, and decline
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Standard product life cycle has four stages:
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during this stage, advertising and promotion are much more critical than in the introduction stage
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Identify the incorrect statement about the growth stage of the product life cycle.
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keeping sales and profits at a fairly high level
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What is the challenge a small business faces in the maturity stage?
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many products go into decline, only to be resurrected in the future as styles come back to old standards
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Identify the correct statement about the decline phase of the product life cycle.
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value delivered by the customer
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The optimum price is primarily a function of all of the following EXCEPT
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inelastic product
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A product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased is called a(n)
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should not be an objective for a small business
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Increasing market share
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price escalation
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___ is the end price to your customer that might be four times from what you got.
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prestige; premium
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Generally, __ pricing is for an item considered a status symbol, whereas, __ pricing is used for non-status symbol types of products.
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price lining
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Identify the term for an attempt to appeal to different markets.
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periodic discounting
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A back-to-school sale is an example of
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limit pricing
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What is an extremely low penetration price that discourages competitors from entering a market called?
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the redemption rate is extremely low
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Rebates are a great tool for small businesses because
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idea screening
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Having generated several toy ideas, the next step Tammy needs to pursue in the new development process is
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prototypes
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The first versions of the toy products that Tammy develops in the formal development are called
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growth
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Once Tammy has introduced her toys in the market, during which stage of the product life cycle would the acceptance of her products increase and sales and profits grow faster than at any other time?
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skimming
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If Tammy were to charge the highest price the market would bear, it would be called
