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venture planning
test one
| Question | Answer |
|---|---|
| What is NOT a typical characteristic of the entrepreneurial profile? | A gambling, risk-taking mindset |
| An entrepreneur is? | Someone who creates a new business in the face of risk and uncertainty. |
| T/F Less and less young people are choosing entrepreneurship as a career | False |
| Which of the following factors acts as fuel to feed the nation's entrepreneurial fire? | Greater opportunities for entrepreneurial education, The shift from an industrial economy to a service economy, Increasingly powerful technological advancements that are available at affordable prices |
| T/F Women now own 40 percent of all businesses in the United States. | True |
| Today, home-based businesses | Account for 53 percent of all businesses |
| T/F Family businesses account for just 10 percent of all of the companies in the United States | False |
| _________ are entrepreneurs who have been the victims of corporate downsizing and are an important source of entrepreneurial activity | Castoffs |
| Account for about 99.7 percent of all businesses in the United States, Employ 52 percent of the nation's private sector work force. Create more jobs than do big businesses | Small businesses |
| See the ability to fail intelligently, learning why they failed so that they can avoid making the same mistake twice | Successful entrepreneurs |
| One who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on them | Entrepreneur |
| Willingness to take initiative, Preference for moderate risk, Confidence in their ability to succeed, Self-reliance, Perseverance, Desire for immediate feedback are all _______ | characteristics of entrepreneurs |
| Control your own destiny, Make a difference, Reach your full potential, Reap impressive profits, Contribute to society and to be recognized for your efforts, Do what you enjoy and to have fun at it What are some benefits of____ | small business ownership |
| Uncertainty of income, Risk of losing your entire investment, Long hours and hard work, Lower quality of life until the business gets established, High levels of stress, Complete responsibility, Discouragement are some drawbacks of_____ | small business ownership. |
| What is the largest industry category of business activity for small businesses | Services |
| What is the difference between corporate castoffs and corporate dropouts? | Castoffs are downsizing victims and dropouts, no longer trusted employers set out on their own. |
| What are serial entrepreneurs | |
| these business builders seek to find innovative solutions to some of society’s most pressing and most challenging problems | social entrepreneurs |
| Entrepreneurial couples who work together as co-owners of their businesses are_____ | copreneurs |
| What are the seven ways of avoiding the pitfalls of small business failure? | Know your business in depth, Prepare a business plan, Manage financial resources, Understand financial statements, Learn to manage people effectively, Set your business apart from the competition, Maintain a positive attitude |
| Entrepreneurs seem to be characterized by | a high energy level |
| Surveys show that owners of small businesses believe that | they work harder on their own than if they worked for someone else |
| Potential drawbacks of small business ownership include | a high likelihood of a lower quality of life while starting and establishing the small business |
| Approximately __ % of family businesses survive the transition of the leadership to the second generation | 33 |
| More businesses fail because of_____ than for any other reason. | Incompetent management |
| What is a factor of a company's intellectual capital? | Increasingly, it is likely to be the source of the firm's competitive advantage |
| What activity comes first in the strategic management process? | Develop a clear vision for the business |
| T/F There are three key issues entrepreneurs and their employees should address when developing their mission statement | True |
| The first question that a company's mission statement should address is | What business am I? |
| T/F Strengths are negative internal factors that inhibit the accomplishment of its mission, goals, and objectives | False |
| Because of ______ facing their businesses, theater owners are changing the way they do business in an effort to lure customers from their in-home theaters and back to the (really) big screen. | Threats |
| Which competitors offer some of the same products and services? | Significant competitors |
| T/F A competitive profile matrix allows entrepreneurs to evaluate their firms against the major competitors on the key success factors for their market segments | True |
| Core competencies are a unique set of skills, knowledge, or abilities that a company develops in key areas, such as superior quality, customer service, innovation, engineering, team-building, flexibility, speed, responsiveness, that allow to perform___ | perform vital processes surpass competitors |
| _______ is the practice of gathering, organizing, and disseminating the collective wisdom and experience of a company’s employees for the purpose of strengthening its competitive position | Knowledge management |
| Which strategy recognizes that not all markets are homogeneous? | Focus |
| Customer perspective, Internal business perspective, Innovation and learning perspective, all refer to | A balanced scorecard |
| Strategic management involves developing a game plan to do what for a company | to guide the company as it strives to accomplish its vision, mission, goals, and objectives and to keep it from straying off its desired course |
| What is a vision for an entrepreneur | is the result of an entrepreneur’s dream of something that does not exist yet and the ability to paint a compelling picture of that dream for everyone to see |
| What does a mission statement do for a company | addresses the first question of any business venture: “What business am I in?” |
| What is the difference between weaknesses and threats for a company | Weaknesses are negative internal factors that inhibit the accomplishment of its mission, goals, and objectives, and threats are negative external forces that hamper a company’s ability to achieve its mission, goals, and objectives. |
| Big Hairy Audacious Goals | BHAG |
| Gjve four ways in which an entrepreneur can analyze competitors in an ethical manner? | Monitor industry and trade publications, Talk to customers and suppliers, Listen to employees, especially sales representatives and purchasing agents, Attend trade shows and conferences |
| According to the textbook, what is the difference between goals and objectives | Goals are the broad, long-range attributes that a business seeks to accomplish; they tend to be general and sometimes even abstract, Objectives are more specific targets of performance |
| What are the three basic strategies | cost leadership, differentiation, focus |
| A______ strategy recognizes that not all markets are homogeneous. In fact, in any given market, there are many different customer segments, each having different needs, wants, and characteristics | focus |
| A company pursuing ______ strategy strives to be the lowest-cost producer relative to its competitors in the industry | a cost leadership |
| A company following a ______ strategy seeks to build customer loyalty by positioning its goods or services in a unique or different fashion. | Differentiation |
| Customer Perspective, Internal Business Perspective, Innovation and Learning Perspective, Financial Perspective, Corporate citizenship all make up a ______ | balanced scorecard |
| The key to a successful differentiation strategy is to build it on a______ | distinctive competence |
| ______ is a road map an entrepreneur draws up of the actions necessary to fulfill a company’s mission, goals, and objectives | strategy |
| ______ are specific, measurable, assignable, realistic, timely, written down, | Objectives |
| ______, is a set of measurements unique to a company that includes both financial and operational measures and gives managers a quick yet comprehensive picture of the company’s total performance against its strategic plan | balanced scorecards |
| A competitive ______ allows entrepreneurs to evaluate their firms against the major competitor on the key success factors for their market segments | profile matrix |
| ______ competitors offer the same products and services, and customers often compare prices, features, and deals from these competitors as they shop | Direct |
| ______ competitors offer the same or similar products or services only in a small number of areas, and their target customers seldom overlap yours. | Indirect |
| _______competitors offer some of the same products and services | Significant |
| _______are the factors that determine a company’s ability to compete successfully in an industry | Key success factors |
| Give an example of cost leadership, differentiation, and focus strategies | |
| What are the five perspectives of the balanced scorecard approach | |
| ______ are positive internal factors that contribute towards accomplishing the company's objectives | Strengths |
| Focuses on making the physical characteristics of the product as unique as possible | A differentiation strategy |
| Rather than attempting to serve the total market, the small firm pursuing a ____ strategy specializes in serving a specific target segment | focus |
| The aggregation of factors that sets the small business apart from its competitors and gives it a unique position in the market | Competitive advantage |
| Tyson Foods' practice of adding value to its chicken products by deboning, skinning, bite-sizing, or pre-cooking them is an example of a: | differentiation strategy. |
| The most popular form of business ownership in the United States is | the sole proprietorship |
| The greatest disadvantage of a sole proprietorship is | the unlimited personal liability of the owner. |
| The Uniform Partnership Act does not gives each partner the right to | Earn a profit without sharing |
| ________ partners are financial investors who do not wish to participate in the day-to-day affairs of the partnership and seek to limit their risk. | Limited |
| T/F A corporation is a separate legal entity uniquely setting it apart from its owners. | True |
| Every state requires a Certificate of Incorporation. The following information is generally required: | The corporation's name, The corporation's statement of purpose, The company's time horizon. |
| Limited partnerships are composed of at least one general partner and at least one limited partner | True |
| T/F Cost and time involved in the incorporation process is an advantage of being a corporation. | False |
| Joint ventures and syndicates are very much like _______ except that they are formed to _______. | partnerships; take advantage of a specific, limited opportunity |
| The disadvantages of a corporation include: | Cost and time involved in the incorporation process, Double taxation, Legal requirements and regulatory red tape. |
| What is the greatest disadvantage of a sole proprietorship as a form of business ownership | |
| What happens to a sole proprietorship when the owner dies | |
| What happens if partners do not write up a partnership agreement | |
| In a partnership, what is the law of agency? | |
| The limited partner is treated as a/an ______ in the partnership. | |
| What is a foreign corporation | |
| What is a publicly held corporation | |
| What are the four major advantage of the corporation as a form of business ownership | |
| Explain "double taxation" in the context of the corporation | |
| How is an S Corporation different from a C Corporation | |
| Sole proprietorships characteristically are | easy to discontinue |
| The most critical disadvantage of the sole proprietorship is: | unlimited personal liability |
| The three key elements of any partnership are | common ownership in the business, sharing the business' profits or losses, and the right to participate in managing the business |
| The ______ is a separate legal entity apart from its owners and may engage in business, make contracts, sue and be sued, and pay taxes. | Corporation |
| A corporation doing business in the state in which it is incorporated is considered to be a/an______ corporation | domestic |
| __________ franchising involves licensing the franchisee to sell specific products under the manufacturer's brand name and trademark through a selective, limited distribution network. | Product distribution |
| What is a benefit of franchising to the franchisee? | A business system, National advertising programs, Brand name appeal |
| T/F A proper location is critical to the success of any small business and franchise is no exception. | True |
| What are drawbacks of buying a franchise | Franchise fees and ongoing royalties, Strict adherence to standardized operations, Restrictions on purchasing. |
| What are clues that should arouse suspicion of an entrepreneur about to invest in a franchise? | A marginally successful prototype store or no prototype at all, No written documentation to support claims and promises, Evasive, vague answers to questions about the franchise and its operation. |
| When researching a potential franchise market, what are important questions to ask? | How strong is the competition, Who are the potential customers, What gaps exist in the market? |
| characteristics that make a franchisor stand out are | Profitability, Affordability, A unique concept or marketing approach. |
| What are advantages of buying a new franchise instead of an established franchise? | Possibility of lower fees as a "pioneer" of the concept, |
| Which of the following characteristics of a franchise system does NOT increase the success rate of franchisees? | Franchise does not offer training programs designed to improve franchisees' knowledge and skills. |
| T/F A large number of companies are no longer piggybacking or engaging in combination franchising | False |
| The first step a person considering buying a business should take is to: | conduct a self-inventory to determine his or her skills, abilities, and personal interests |
| What is franchising | |
| What are the three types of franchising | |
| What are three drawbacks of franchising | |
| What must a franchisor deliver to a franchisee before any sale of a franchise | |
| In franchising, what does the; UFDD contain | |
| List three signs of a dishonest franchisor | |
| In franchise contracts, what three items should you look for? | |
| List three things you should look for in a franchise | |
| Give an example of intercept marketing | |
| What is piggybacking in franchising | |
| ____ franchising exists when a franchisee is licensed to sell specific products underthe franchisor's brand name through a selective distribution system. | Product distribution |
| A significant advantage a franchisee has over the independent small business owner is participation in the franchisers ____ | centralized and large-volume buying power |
| In view of the cause of most new business failures, probably the most valuable service provided franchisees by the franchisor is: | management training and experience |
| The failure rate for franchises is | lower than the rate for all new businesses. |
| Establishing a Mrs. Fields Cookies franchise inside a Hardees fast-food franchise is an example of _____franchising | piggyback |
| _______ involves studying, reviewing, and verifying all of the relevant information concerning an acquisition candidate. | due diligence |
| Which of the following negotiating tips should be used when reaching a deal? | Know what you want to have when you walk away from the table, Develop a negotiation strategy, Recognize the other party's needs. |
| What are areas that should be investigated in the due diligence process | Motivation, Asset valuation, Market potential |
| What is an advantage of buying an existing business? | Superior location, Leveraging the experience of the previous owner, Successful businesses may continue to be successful. |
| To be enforceable, a covenant not to compete (restrictive covenant) must be: | part of a business sale, Negotiated directly with the owner, must be reasonable in scope. |
| What are variables that influence the value of a privately owned business? | The outlook for the market or industry, The company's financial status and stability, The company's earning capacity. |
| What is the intent of competitor analysis?b | To determine the company's current competitive situation |
| _______ is when a buyer purchases all or most of a business's inventory in a business sale. | bulk transfer |
| A company whose owner wants to sell to her employees by establishing an employee stock ownership plan (ESOP) should: | be profitable, have at least 15 to 20 employees, have an annual payroll of at least $500,000. |
| Why might the location of an existing business be unsatisfactory? | |
| When considering the purchase of an existing business, what might be wrong with the inventory of the existing business | |
| What is the hidden market | market of companies that may be for sale but are not listed as “for sale |
| What is due diligence | Due diligence involves studying, reviewing, and verifying all of the relevant information |
| In buying an existing business, what three legal areas must be checked for possible lawsuits against the existing business? | Lien, Bulk transfer, ongoing legal liabilities |
| What is a lien? | creditors’ claims against an asset |
| In section 6 of the Uniform Commercial code who does the bulk transfer Protect | Buyer |
| Why would a buyer obtain a non-compete contract with a seller personally? | The buyer must negotiate the covenant directly with the owners, not the corporation; if the corporation signs the agreement, the owner may not be bound by it.) |
| In determining the value of a business, the balance sheet technique fails to account for_______ | |
| The adjustable balance sheet technique improves on the balance sheet approach because it values assets at_______ | |
| The inventory in an existing business: | needs to be checked for age and salability |
| Accounts receivable in an existing business: | are rarely worth their face value. |
| The most common reasons owners of small- and medium-sized businesses give for selling their businesses are | boredom and burnout |
| A valuation method that is more realistic than the balance sheet because it adjusts book value to reflect actual market value is the | adjusted balance sheet method |
| Which of the following valuation methods does not consider the future income-earning potential of a business | balance sheet technique |
Created by:
romoore245