Ch 6 – Flashcard Test Answers

Flashcard maker : Ben Russell
Entrepreneurship is:
accepting the risk of starting and running a business.

Which of the following U.S. issues does entrepreneurship most directly affect?
The ability to create jobs for others

Which of the following explains why individuals accept the risks of business ownership?
The sense of self-satisfaction and independence

Which of the following is a characteristic of successful entrepreneurs?
Action-oriented

Which of the following best describes entrepreneurial personality traits?
Tolerant of uncertainty and highly energetic.

A(n) ________________ is a group of experienced professionals from different areas of business who join together to develop, make, and market a new product.
entrepreneurial team

An entrepreneurial team consists of:
experienced professionals from different areas of business.

Business owners who prefer to maintain their businesses at a manageable size are called:
micropreneurs

One of the challenges of running a home based business is:
keeping work and family tasks separate.

A successful web based strategy that helps a business spread the word about its website and products is called ____________.
affiliate marketing.

A creative person working within a corporation to launch new products and generate new profits is known as a(n):
intrapreneur.

The goal of an intrapreneur is:
to develop new products and generate new profits for the corporation.

The U.S. government’s Immigration Act of 1990:
encouraged entrepreneurs to come to the U.S. through “investor visas.”

Enterprise zones are specific geographic areas that:
attract business investment by offering lower taxes and government support for development.

Business incubators are usually government funded facilities intended to:
offer start-up firms low-cost office space and basic business services.

Historically entrepreneurs in the U.S.
started many small firms that later became major corporations employing thousands of workers.

Which of the following statements explains one of the reasons that people in the U.S. take the entrepreneurial challenge?
It’s about independence and the opportunity to share in the American dream.

Successful entrepreneurs are self nurturing. This means they:
believe in themselves and their ideas.

Which of the following statements is characteristic of entrepreneurs?
They look at problems and see opportunities.

Although successful entrepreneurs are more tolerant of uncertainty,
they strive to take calculated risks.

Effective entrepreneurial teams combine:
creativity with marketing and production experience.

Successful entrepreneurial teams:
bring a variety of talent to the business venture.

One reason we have seen continued growth in home based businesses is:
affordable technology makes it easier to compete.

Which of the following statements is not a challenge for home based businesses?
Affordable technology such as the Internet

Affiliate marketing is a web based business strategy that:
rewards individuals who are willing to link a company’s website to their blog or social network page.

Which of the following best describes the difference between an intrapreneur and an entrepreneur?
Intrapreneurs work within existing corporations while entrepreneurs assume the risks of starting their own business.

Intrapreneurs make use of __________ to develop and launch new products and generate new profits.
their employer’s existing human, financial, and physical resources

Enterprise zones are:
specific locations across the U.S. where entrepreneurs can set up shop and receive tax breaks for operating in these areas.

Enterprise zones and investor visas are examples of:
government programs that encourage economic growth through entrepreneurship.

State and city governments have promoted facilities where new businesses can open up shop and share common services such as secretarial, accounting, and legal services. Due to their remarkable success rate, _______________ continue to grow in popularity.
incubators

Kyra recently quit a job with a large corporation to start her own business. While she realizes that her decision comes with risk, she is excited at the chance to be independent and by the challenges of running her own firm. Kyra is an example of a(n):
entrepreneur.

Erin developed a new type of exercise equipment she calls the Tush N’ Tone. After unsuccessfully searching for potential investors, she arranged a personal loan and borrowed additional money from her parents. Her willingness to continue believing in her idea and to remain enthusiastic shows that Erin is:
characteristically self-nurturing.

Apple’s smart team is an example of a firm that succeeded by:
bringing together a group of talented and experienced managers to conceive, develop, and market products.

Small businesses:
deal with similar management issues that large companies face.

The Small Business Administration defines a small business as a firm that:
is independently owned but not dominant in its industry.

Small businesses create about __________ percent of the new jobs in the United States.
65

A business’s size is measured:
in relation to other firms in its industry.

According to economist Bruce Kirchhoff, small business failures are:
lower than traditionally reported.

When comparing small businesses to their larger competitors, it is clear that:
small firms often can offer more personalized customer services than big firms.

Which of the following is not a reason stated for small business failure?
Buying too little on credit and not being lenient enough with your credit paying customers

Which of the following will not help your small business succeed?
Services you perform are easily replicated by larger companies, such as online banking.

Small businesses are important to the U.S. economy because:
they create about 65% of new jobs each year and generate over 50% of the U.S. GDP.

Using the analogy of boulders vs. sand for filling a hole, the textbook points out that:
small businesses can serve niche markets that larger firms do not serve well.

Which of the following employment statistics about small businesses is true?
A great majority of American workers find their first jobs with a small business.

According to SBA guidelines, a manufacturing firm with 1,000 employees:
may be classified as a small business depending upon the size of other firms in the industry.

Which of the following statements accurately depicts an advantage that small business has over big business?
A small business can maneuver and change quicker than most large businesses can. It can react to market conditions and customer concerns much faster.

Entrepreneurs looking for a business that gives them the best opportunity to get rich should consider starting a business in:
the manufacturing sector.

A review of small business successes and failures indicates that the:
businesses with potential of high profit levels tend to be difficult to start and hard to keep going.

After graduation, Manny focused his attention on finding full time employment. He has decided to narrow his job search to jobs with a major corporation. His job search strategy:
will likely limit his job prospects since most new jobs are with small businesses.

A small business management course at a community college may offer entrepreneurs an opportunity to:
meet with experienced entrepreneurs and learn from their advice.

One way to get into business is to buy an existing company. The value of the business used to determine a fair purchase price is based on:
the value of what the business owns, what it earns, and what makes it unique.

Conversations with people who start their own business often reveal that:
many small business owners got their entrepreneurial idea from a previous job.

For prospective entrepreneurs, enrolling in an introduction to business or small business management course offered through their community college:
can be helpful by offering them an opportunity to meet experienced small business owners.

Which of the following suggestions would an experienced business owner offer to help someone who is thinking about starting a business venture?
Gain experience by working for a successful businessperson.

Successful small business owners are:
valuable sources for information since you can learn from their experiences.

When starting a small business, it’s important to remember:
learning from others and gaining relevant business experience improves the odds for success.

Motivated by his desire to operate his own business, Nick considers purchasing an existing business. As he carefully weighs this option, he is likely to find that:
the value of an existing business is determined by what the business owns, what it earns, and what makes it unique.

Two key management functions that need particular attention when starting a business are:
planning and financing.

A __________ is a written document that details the business idea, the target market and the business’s competitive advantage, financial resources available for the business, and the qualification of the management.
business plan

The business plan will include ____________.
an analysis of the competition

A detailed written statement that describes the nature of the business, the target market, the firm’s competitive advantages, as well as the owner’s resources and qualifications is a:
business plan.

Entrepreneurs seeking financial support from bankers and potential investors should:
create a detailed business plan to help the bankers and investors understand why this business will succeed.

Bankers and potential investors are likely to read ___________ first.
the executive summary

After personal savings, the next largest source of capital for entrepreneurs is from:
friends and family.

________ are private individuals who invest their own money in potentially hot new companies before these firms become larger, publicly traded companies.
Angel investors

Due to the credit crunch during the recent recession, many small businesses found that _____________ were more willing to lend money to smaller operations.
smaller, community banks

A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a:
venture capitalist.

Which of the following government agencies is responsible for encouraging the development of small business?
Small Business Administration

Which of the following sources of investment is the least likely type available to entrepreneurs?
Venture capitalists

The Small Business Administration’s microloan program awards loans to entrepreneurs based primarily on their:
integrity and sound business idea.

A Small Business Investment Company (SBIC) is a(n):
private investment company that is licensed by the SBA to make loans to small businesses.

One of the best places for young entrepreneurs to start shopping for an SBA loan is a(n):
Small Business Development Center.

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.
market

To be considered part of a market, an individual must:
have both a willingness to buy and the financial resources needed to buy.

Small business owners often struggle in attracting qualified workers. Which of the following contributes to this problem?
Many jobs in small firms have low pay and few benefits.

Employees of small businesses often have greater job satisfaction than do employees of larger firms. One reason for this difference in job satisfaction is that employees of small businesses often:
get more respect from their bosses.

A new business that sets up a(n) _____________ from the start is saving itself time and grief later.
good accounting system

Small businesses must seek advice from outside experts. In order to put together official documents such as leases, contracts, and partnership agreements, it is important to seek the advice of ________.
an attorney.

A(n) ____________ is a valuable source of information regarding techniques to reduce a firm’s exposure to risk.
insurance agent

Similar to how large businesses proceed, small businesses make marketing decisions ____________.
before a product is developed or store is opened.

The Small Business Administration sponsors volunteers from industry, trade associations, and education who offer advice to small business owners. These volunteers are called:
the Service Corps of Retired Executives.

Entrepreneurs applying for a bank loan should realize that bankers will:
expect the entrepreneur to provide a business plan.

A good business plan will:
describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner’s qualifications.

The executive summary section of the business plan contains:
information that will capture the attention of bankers and other investors who receive many business plans every day.

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will:
expect an ownership stake in the company in exchange for financial backing.

A market consists of potential buyers of a good or service. However, for a market to exist:
people must have unsatisfied wants and needs as well as a willingness and ability to buy.

Small business employees:
often find more job satisfaction than their counterparts in big business.

Entrepreneurs learn that there are many legal and financial issues involved in starting their business. The best way for the small business owner to resolve these issues and protect the firm’s resources is:
seek and pay for expert guidance and assistance.

Which of the following is not a recommended source of small business advice for persons contemplating a new business?
Other prospective small business owners

The size of the world market is about:
7 billion

Increased participation in small business exporting owes credit to _______.
technological advances such as the Internet and PayPal for safely fulfilling orders

One of the hurdles small businesses face when deciding to export is:
financing is often difficult to find.

One reason why many U.S. small businesses are not involved in exporting is:
many of these firms do not know how to get started.

The SBA’s ________ program provides export financing opportunities for small businesses.
Export Express loan

Which of the following best describes the outlook for small businesses in international markets?
The world is a larger, and potentially a more lucrative market than the U.S. domestic market.

Small businesses often have advantages in international markets. One advantage is:
individualized customer service as opposed to impersonal corporate bureaucracies.

Labels Plus, LLC, exports specialty printing equipment for the labeling, flexible packaging, and carton industry. Due to increased support from ______, this company’s sales to Brazilian companies and other global opportunities have significantly increased.
Department of Commerce’s Bureau of Industry and Security

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