Intro to Business Entrepreneurship – Flashcards
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Entrepreneurs constantly change U.S. business and contribute to
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the nation's overall good
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Which of the following is not a characteristic of a successful entrepreneur?
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Dependence
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To decide whether or not a business opportunity is realistic for you, compare your background and experience with
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the experience of people who own that kind of business
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You can find out about business opportunities from
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books and magazines,government publications, the SBA
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The SBA
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publishes information that may be helpful for small businesses
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The best entrepreneurs use
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a formal problem-solving model to make decisions
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The problem-solving process is not complete until
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the action is evaluated
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Good communication is important in the problem-solving process because to solve problems, you will likely need to
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interact with others, request information and express your ideas, listen to suggestions from others
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The role of business is
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to produce and distribute goods and services that people need and want
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Raw materials supplied by nature are called
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natural resources
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What would not be considered a capital resource
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Employees
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A marketing mix is
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a combination of product, distribution, price, and promotion
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The U.S. economic system is not based on
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government control
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components of the marketing mix do not include
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competition
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When the quantity of a good or service produced increases
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variable costs increase as well
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. The fixed costs of a business
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include monthly rent
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Writing a business plan can help you identify
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problems you might encounter in the future
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A business plan should
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identify target customers, show how your business will earn a profit, detail who will run your business
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A business plan explains how your product or service
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will be produced, will be sold, is either new or better than existing products or services
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Writing a business plan can force entrepreneurs to think
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about their goals
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The marketing section of your business plan should describe
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the location of your business
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The marketing section of your plan explains
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how you plan to enter the market, who your prospective customers are, your advantages over the competition
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A local Chamber of Commerce can provide
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information on trends affecting local businesses, local resources, and zoning and licensing information
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. Your business plan must
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clearly define your market, never overlook the competition, be consistent
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Entrepreneurs estimate demand for their products and services by identifying
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their target market
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. Understanding your customers allows you
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to meet customer demands
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. Psychographics are data that describe a group of people in terms of their
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lifestyle habits, personality traits, opinions
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Secondary data are found in
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already published sources
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Secondary data are found
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in government publications, on the Internet, in newspapers
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Customer relationship management
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focuses on understanding customers as individuals
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To convince customers to buy from you instead of your competition, you need
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need information about your competitors
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Your analysis of competitors should include
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their prices, locations, and facilities
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Competitive analysis does not
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) research a competitor's business plan
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A marketing mix is the blending of
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product, distribution, price, and promotion to satisfy a target market
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Price is one of the elements of
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the marketing mix
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Your marketing strategy should address
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product introduction or innovation, pricing, market share
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The marketing concept is the belief that
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the wants and needs of customers are the most important consideration when developing any product or marketing effort
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Branding is
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the name, symbol, or design used to identify your product
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Companies that use the marketing concept will
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select a product mix that will most appeal to their target customers
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Businesses can increase market share by
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networking with potential customers
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If the terms of an invoice read "2/10, net 30," this means that
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a 2 percent discount may be taken if the invoice is paid within 10 days
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Direct distribution channels move products
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directly from the manufacturer to the consumer
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Physical distribution does not include
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branding
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Direct-mail advertising is
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effective only if people read it
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In choosing an advertising medium, you should
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consider its effectiveness in reaching your target market
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Publicity is free promotion that
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is generated by media coverage, may involve staging an event or bringing in a celebrity, may be favorable or unfavorable
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Personal selling is
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direct communication between a prospective buyer and a sales representative in which the sales representative attempts to influence the prospective buyer in a purchase situation
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When customers know exactly what they want, the fulfillment of their needs is referred to as
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need satisfying
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The first step in the consumer decision-making process is to
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define the problem
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A disadvantage of buying an existing business is that it may
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be poorly located
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. When buying a business, you should not expect to be able to
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inspect a list of all customers
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You should be suspicious when buying a franchise if the franchisor refuses to provide
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written financial statements
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A partnership agreement should include
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a procedure for dealing with the death of a partner
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how dividends are to be distributed
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is not included in a partnership agreement
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During the period a patent is in effect
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no business or individual can copy or use the patented invention without permission from the patent holder
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Laws that protect businesses involve
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trademarks
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Restrictions on where businesses can locate are
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zoning laws
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In choosing location you should be able to
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identify your trade area on a map
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An advantage of working at home is that
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many costs are reduced or eliminated
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E-commerce consists of
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buying and selling over the Internet
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In a percentage lease
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the tenant pays a base rent and a portion of their profits to the landlord
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A lease in which the landlord pays all property expenses is a
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) gross lease
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A lease in which the landlord receives a portion of the tenant's revenue each month in addition to rent is a
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percentage lease
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. Inventory consists of
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the products and materials needed to make the product
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Vendors are
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companies that sell products and services to businesses
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A______________ business does not always need inventory before it can open for business
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Service business
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Net worth
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is the difference between what you owe and what you own
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Things that you own are called
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assets
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. A bank may turn down a loan application for a new business because the entrepreneur
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is investing too little personal money in the business
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The cost of the inventory a business sells during a particular period is called
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cost of goods sold
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Loans and accounts payable are examples of
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liabilities
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. In the accounting equation, assets must always equal
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liabilities plus owner's equity
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You should balance your check register every
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month
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If you have a personal checking account, you
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should still get a separate business account
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A payroll register does not include
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sales taxes deducted from an employee's earnings
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Instruction in safety procedures should be part of
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employee training
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Business rules, policies, and procedures should be included
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in your operations manual
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. If inventory is held too long it may become
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obsolete
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The level of inventory you keep in stock depends on
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the frequency with which you sell your inventory, the cost of carrying inventory, the cost of losing a sale because you are out of stock
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A cash budget is
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based on past revenues and will show the projection of incoming cash
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. Reducing your payroll expenses by laying off workers can
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improve your cash flow
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All of the information necessary for calculating net profit on sales is found on the
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income statement
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The people who work for your business are your
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human resources
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To determine your staffing needs
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make a list of all the duties in your business and the time needed to perform each
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A want ad should not
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ask applicants to identify their race and religion
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It is important to make the most of the job interview because you want to hire employees who can
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improve your ability to meet customer needs
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When checking references, you should ask previous employers about a candidate's
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personal qualities
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Rewards, other than cash are called
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benefits
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During a job interview, you should
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allow the applicant plenty of time to talk
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Effective managers need good
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leadership qualities
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Employee training should
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begin as soon as the employee is hired, be evaluated to ensure it was effective, be continuous
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You should evaluate employee performance
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to help you identify both outstanding and problem employees
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You should let your managers and employees know about your plan for
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handling risks
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A recovery plan is an important part of every
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risk management plan
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You transfer risk and protect yourself against financial losses from some risks by
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purchasing insurance
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A payment made to an insurance company to cover the cost of insurance is a
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premium
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life insurance.
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is not the most important type of insurance you will need for your business
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Property insurance usually does not cover losses due to
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floods
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An installment loan is
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paid back with interest in monthly equal amounts over a specified period of time
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It is the employee's, not the employer's, responsibility to file
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a workers' compensation claim.
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Uncollectible accounts
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are an expense to a business
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