Deck 20: Managing Small Business Start-Ups

Question 1

Hong Kong is the most entrepreneurial country, with 47.4 percent of individuals age 18 to 64 starting a new business.

Answer 1

False

Question 2

Immigrants are more likely to start small businesses than native-born Americans.

Answer 2

True

Question 3

The fastest growing segment of small business in both the U.S. and Canada is partnerships.

Answer 3

False

Question 4

Small businesses, according to the Small Business Administration, employ more than 90 percent of the private workforce in the United States and are responsible for 85 percent of all business innovations.

Question 5

The primary focus of most entrepreneurs is retail, manufacturing and/or service type of businesses.

Question 6

Idealists, who are rewarded by chance to work on something new and creative, consist of 15% of small business owners.

Question 7

Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners.

Question 8

Entrepreneurship and small business in the United States is an engine for job creation and innovation.

Question 9

The process of initiating a business venture, gathering and organizing the appropriate resources, and assuming the associated risks and rewards refers to Entrepreneurship.

Question 10

Sole proprietorships are the fastest growing segment of small business.

Question 11

People who have high achievement needs like to set their own goals, which are moderately difficult.

Question 12

Entrepreneurs in the sustainer category alike the chance to balance work and personal life and often don't want the business to grow too large.

Question 13

Hard workers, who thrive on the challenge of building a larger more profitable business, consist of 20% of small business owners.

Question 14

Entrepreneurs are in more control of their environment, generally speaking, and can be expected to have an external locus of control.

Question 15

According to a survey, majority of entrepreneurs work approximately 80 hours or more per week.

Question 16

Small businesses represent 68 percent of all firms and employ about three quarters of all private sector employees.

Question 17

Sole proprietorships are the fastest growing segment of small business in both the U.S. and Canada.

Question 18

Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners.

Question 19

Every time Tina Faye does poorly on an exam and blames some outside factor, she can be described as having an external locus of control.

Question 20

Women and minorities who have found their opportunities limited in the corporate world are seeing intrapreneurship as the only way to go.

Question 21

Two principle advantages of forming a corporation are continuity and limits on the owners' liability.

Question 22

The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called tolerance for ambiguity.

Question 23

Borrowing from family and friends is a common source of debt financing for a start-up business.

Question 24

A business incubator is an independent company producing a product or service similar to that produced by the entrepreneur's former employer.

Question 25

Social entrepreneurship combines the creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for the better.

Question 26

Borrowing money that has to be repaid at a later date in order to start a business is equity financing.

Question 27

A proprietorship is an unincorporated business owned by two or more people.

Question 28

Equity financing is when funds are invested in exchange for ownership in the company.

Question 29

To succeed in the competitive online market, aspiring entrepreneurs need to identify a market niche that isn't being served by other companies.

Question 30

A business opportunity that provides shared office space, shared secretarial assistance, management support services, and management advice to entrepreneurs is a franchise.

Question 31

An attractive innovation for entrepreneurs who want to start a business from scratch is to join a business incubator.

Question 32

Social entrepreneurs have a primary goal of improving society rather than maximizing profits.

Question 33

The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur's own way.

Question 34

A tolerance for ambiguity is a psychological characteristic that enables a person to accept the threat of competition and potential risk.

Question 35

Forty-one percent of people start a business to fulfill a dream.

Question 36

Entrepreneurs are able to deal easily with delays and exhibit high levels of patience, knowing that the results will be worth the wait.

Question 37

Since a corporation is a legal structure reserved for large firms, small businesses have two basic choices for legal structure of their company: proprietorship and partnership.

Question 38

A venture capital firm is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.

Question 39

The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing.

Question 40

A document specifying the business details prepared by an entrepreneur prior to opening a new business is known as a business plan.

Question 41

In the start-up stage of an entrepreneurial business, formal planning tends to be nonexistent except for the business plan.

Question 42

A domain name gives a company an address on the Web and a unique identity.

Question 43

Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as a(n)

A) entrepreneurship.
B) intrapreneurship.
C) useless idea.
D) large business.
E) partnership.

Question 44

The takeoff stage is the last of the five stages of growth for an entrepreneurial company.

Question 45

Which of the following are high-energy people who enjoy handling every detail of their own businesses?

A) Jugglers
B) Idealists
C) Sustainers
D) Optimizers
E) Hard workers

Question 46

At Stage 3 of growth for an entrepreneurial firm, managers often are hired to take over duties performed by the owner.

Question 47

The main problems are producing the product or service and obtaining customers in the survival stage of growth.

Question 48

Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the ____ to start new businesses.

A) Small Business Administration
B) Internet
C) bookstore
D) mall
E) Internal Revenue Service

Question 49

Small firms that file for patents typically produce ____ more patents per employee than large patenting firms.

A) twice
B) 3 to 4 times
C) 6 to 7 times
D) 9 to 10 times
E) 13 to 14 times

Question 50

Tracy's Trikes believes that each of the employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes would describe which of the categories of small business owners?

A) Optimizers
B) Idealists
C) Hard workers
D) Sustainers
E) Jugglers

Question 51

Which of the following is the process of starting a business venture, organizing the resources, and taking the risks?

A) Intrapreneurship
B) Entrepreneurship
C) Small business administration
D) Venture capital
E) Equity financing

Question 52

According to the Small Business Administration, which of these defines a business?

A) It has fewer than 500 employees.
B) It has sales less than $5 million a year.
C) It has fewer than $100 million in assets.
D) The SBA's definition of small business is one that is independently owned and operated and not dominant in its field of action.
E) It has fewer than 50 employees and $1 million in sales.

Question 53

A(n) ____ is someone who recognizes a viable idea for a business product or service and carries it out.

A) intrapreneur
B) entrepreneur
C) manager
D) leader
E) introvert

Question 54

Which of the following is the type of business that most entrepreneurs start?

A) Retail
B) Manufacturing
C) Service
D) All of these
E) Retail and manufacturing only

Question 55

Small businesses represent ____ percent of all firms and employ about half of all private sector employees.

A) 86.3
B) 21.9
C) 99.7
D) 54.2
E) 72.8

Question 56

If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n)

A) idealist.
B) optimizer.
C) hard worker.
D) juggler.
E) sustainer.

Question 57

At the success stage, the company's substantial financial gains may come at the cost of losing its advantages of small size.

Question 58

The owner should start implementing more structured control systems by Stage 3 of growth for an entrepreneurial firm.

Question 59

An entrepreneur

A) assumes the risks of the business.
B) reaps the rewards of the business.
C) assumes the financial and legal risks of ownership.
D) recognizes a viable idea for a business product or service and carries it out.
E) all of these.

Question 60

The first stage of growth for an entrepreneurial company is the investment stage.

Question 61

Which of these characteristics is associated with entrepreneurship?

A) A high need for power
B) A high need for affiliation
C) An internal locus of control
D) An external locus of control
E) Low energy level

Question 62

Ami believes that such things as luck or chance will determine her future success. Ami has

A) an internal locus of control.
B) a high need for achievement.
C) a tolerance for ambiguity.
D) an external locus of control.
E) high level of self-confidence.

Question 63

Which of the following demographic factors distinguish entrepreneurs from others?

A) They are likely the youngest child in their family.
B) Most entrepreneurs launch their businesses between the ages of 35 and 55.
C) Their parents likely worked for large companies.
D) They are likely the children of immigrants.
E) All of these.

Question 64

Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of Melissa's characteristics is not consistent with entrepreneurship?

A) Taryn has high self-confidence.
B) Taryn tends to put things off till later.
C) She is untroubled by uncertainty.
D) She has a high energy level.
E) She has high need to achieve.

Question 65

Entrepreneurs tend to

A) need clear instructions.
B) like specific instructions.
C) be impatient.
D) lack self-confidence.
E) have low energy level.

Question 66

All of these are entrepreneurial characteristics EXCEPT

A) self-confidence.
B) tolerance for ambiguity.
C) external locus of control.
D) high energy level.
E) awareness of passing time.

Question 67

____ combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for better.

A) Contemporary entrepreneurship
B) Traditional entrepreneurship
C) Modern-day entrepreneurship
D) Social entrepreneurship
E) Conventional entrepreneurship

Question 68

What is the primary goal of the social entrepreneur?

A) maximizing profits
B) improving society
C) reaching social circles
D) finding funding
E) writing grants

Question 69

Lauren Dean strongly believes in her abilities and feels that she controls her own destiny. She can be described as having a(n)

A) tolerance for ambiguity.
B) internal locus of control.
C) external locus of control.
D) low energy level.
E) awareness of passing time.

Question 70

____ refers to the belief by individuals that their future is within their control and that external forces will have little influence.

A) Awareness of passing time
B) Tolerance for ambiguity
C) Internal locus of control
D) External locus of control
E) Deferred locus of control

Question 71

Which of the following is the most cited source of new business ideas?

A) Brainstorming
B) In-depth understanding of industry/profession
C) A hobby
D) Copying someone else
E) None of these

Question 72

The majority of owners of new businesses work

A) between 40 and 50 hours per week.
B) less than 40 hours per week.
C) more than 60 hours per week.
D) more than 75 hours per week.
E) more than 90 hours per week.

Question 73

Which of these means that people are motivated to excel and pick situations in which success is likely?

A) External locus of control
B) Tolerance for Ambiguity
C) Awareness of passing time
D) Internal locus of control
E) Need to achieve

Question 74

One of the first characteristics or points of a successful business plan is

A) a profile of potential customers and market needs.
B) demonstrate a clear, compelling vision that creates an air of excitement.
C) the key ingredient of the business that will attract million of customers.
D) the entrepreneur's background and role in the company.
E) essential information about funding received so far.

Question 75

Which of the following is the belief by individuals that their future is not within their control but rather is influenced by external forces?

A) Awareness of passing time
B) Tolerance for ambiguity
C) Internal locus of control
D) External locus of control
E) Deferred locus of control

Question 76

The belief by individuals that their future is not within their control, but rather is influenced by some external force is considered

A) an external locus of control.
B) an internal locus of control.
C) a result of a need to achieve.
D) a tolerance for ambiguity.
E) a result of a boost of self-confidence.

Question 77

Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess?

A) A high need for achievement
B) A high need for power
C) An external locus of control
D) An inability to deal with uncertainty
E) Intolerance for ambiguity

Question 78

Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as

A) a SWOT analysis.
B) a business portfolio.
C) a business plan.
D) a competitive analysis.
E) a mission statement.

Question 79

In the United States, minorities own ____ firms.

A) 4.1 million
B) 1.3 billion
C) 872,000
D) 8.9 million
E) 2.9 million

Question 80

Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty?

A) Tolerance for ambiguity
B) External locus of control
C) Need to achieve
D) Awareness of passing time
E) Internal locus of control