The decision regarding the legal form of organization should be made by the
entrepreneur before request for venture capital.
To determine the figures in the budget, the entrepreneur should identify benchmarks or
norms in the industry.
A quick feasibility study should be conducted before preparing the business plan to
uncover possible barriers to success.
Franchising involves payment of royalties in exchange for exclusive distribution rights.
Rent and insurance are examples of variable costs.
The business plan is a private document and should not be read by employees and
customers.
Endowment and pension funds can be part of venture capital equity pools.
Major considerations in channel of distribution selection include degree of directness
and number of channel members.
The detailed review of a potential venture capital deal is called diligent research.
The SBA’s Microloan program is their primary business loan program.
The most commonly issued type of patent is the plant patent.
Chapter 11 bankruptcy allows a firm to reorganize and prepare strategies to improve
future profits.
An error of omission occurs from the decision not to act of a new entry opportunity
when in hindsight they should have.
The limited liability company is the only form of organization that allows members to
share liability.
A product development strategy relies on taking market share from competitors.
The principle of reanalysis requires the entrepreneur to focus on the most important
issues, even when under pressure.
It is best for the entrepreneur to have any litigation in existence transferred to the
bankruptcy court.
A key concern in any merger or acquisition is the legality of the purchase.
When new equipment is being purchased or presently owned equipment is used as
collateral, usually 50 to 80 percent of the value of the equipment can be financed
depending on its salability.
In writing the business plan an entrepreneur should consider four perspectives: the
investor, the customer, the employees and themselves.
Most managers in a corporation are capable of being successful corporate entrepreneurs
with the correct training.
The principle of reanalysis requires the entrepreneur to categorize his or her tasks by
their degree of importance and then to allocate time to tasks based on this
categorization.
A product extension merger occurs when acquiring and acquired companies have
related production and/or distribution activities but do not have products that compete
directly with each other.
Health Insurance is now required in any company for employees who work more than
20 hours per week.
Franchising is an example of a new entry strategy that increases the risk of downside
loss for the franchisees.
The marketing mix consists of the following variables: external environmental factors,
internal environmental factors, and marketing strategy.
Self-renewal includes the re-definition of the business concept, reorganization, and the
introduction of systemwide changes to increase innovation.
The claims section of a patent application is probably the most difficult section of the
application to prepare since this area sets the criteria by which any infringements will
be determined.
Since bills have to be paid at different times of the year, cash flow projections should be
presented weekly.
Telephone surveys have the poorest response rate.
When an entrepreneur bootstraps the purchase of a company, none of the price of the
acquisition is cash.
About one third of all new start-ups fail in their first years.
Only the pricing element in the business strategy of an international entrepreneur has
the potential to be affected by the multiplicity of legal environments.
All marketing goals and objectives should be quantifiable in physical units, time units,
or price units.
Letters from customers, distributors, or subcontractors are examples of information that
should be included in the executive summary of a business plan.
The funds for a SBA guaranteed loan are provided by the federal government.
A narrow scope strategy reduces the risks associated with competition.
Business plan progress can and should be measured throughout the year. Discuss three
controls that help track progress. (Students can discuss any 3 of the following six)
Continuous innovations are described as:
A.having the least disrupting influence on established consumption patterns.
B.having some disruptive influence on established consumption patterns.
C.having no disruptive influence on established consumption patterns.
D.having to establish new consumption patterns due to the creation of a previously
unknown product.
Discuss both the Gordon method and Forced Relationship creative problem solving
techniques.
The number of goals and objectives in the marketing plan should be:
A.2-4
B.4-6
C.6-8
D.8-10
A country’s _______________ is the difference between the value of a country’s
imports and exports over time.
A.gross national product
B.purchasing power parity
C.current account
D.foreign exchange reserve
Discuss the three types of market development strategies and give examples of each.
Why is loss-orientation physically and mentally exhausting?
A.Since it involves psychological counseling.
B.Since it involves confrontation.
C.Since it advocates change of lifestyle.
D.Since it takes a long time to recover from grief.
The majority of bankruptcies are:
A.corporate bankruptcies.
B.partnership bankruptcies.
C.S Corporation bankruptcies.
D.individual bankruptcies.
_____ includes initiative and risk taking, as well as competitive aggressiveness and
boldness.
A.New business venturing
B.Self-renewal
C.Innovativeness
D.Proactiveness
Most ventures that are available for sale:
A.are undervalued.
B.lack established location.
C.have a marginal or unprofitable track record.
D.are listed on the stock market.
The section of the patent application that includes engineering specifications, materials
and components is the:
A.background and advantage section.
B.description of invention.
C.claims section.
D.executive summary.
_____ is not desirable when brainstorming is in process.
A.”Freewheeling”
B.Idea combination and improvement
C.Generating a large quantity of ideas
D.Criticism
The _________ captures the steps it takes to develop raw materials into a product and
get it into the hands of customers.
A.value chain
B.inventory
C.electronic data interchange
D.market accounting system
Identify the most common reasons why business plans fail.
Identify and describe the three major risk reduction strategies.
Marketing information that already exists is called secondary data.
When would an entrepreneur be pronounced to have recovered from the grief of a lost
business?
A.On the availability of equally challenging entrepreneurial opportunities.
B.Upon a simultaneous engagement in an analysis of the failed business.
C.On having evaluated and absorbed the lessons learnt from the failed business.
D.Thoughts about the events surrounding, and leading up to the loss of the business, no
longer generate a negative emotional response.
Which of the following is not a major question that should be addressed by the
marketing plan?
A.Where have we been?
B.Where do we want to go in the short term?
C.Where do we want to go in the long term?
D.How do we get there?
The management team of a new venture:
A.is encouraged to operate the business as a sideline.
B.must operate the business full-time.
C.can expect to draw a large salary.
D.should be employed elsewhere to assure adequate income.
Using a large proportion of part-time workers:
A.provides the firm with flexibility.
B.makes building organizational culture easier.
C.improves worker commitment to the organization.
D.increases the overall productivity of the organization.
The usefulness of the title or introductory page is:
A.that it provides information about the company.
B.such that it requires several pages.
C.questionable, especially to investors.
D.that it contains backup data.
Discuss the advantages and disadvantages of an S-Corporation.
Some of the advantages of the S corporation are as follows:
A. Capital gains or losses from the corporation are treated as personal income or losses
by the shareholders on a pro rata basis (determined by number of shares of stock held).
The corporation is thus not taxed.
B. Shareholders retain the same limited liability protection as the C corporation.
C. The S corporation is not subject to a minimum tax, as is the C corporation.
D. Stock may be transferred to low-income-bracket family members (children must be
14 years or older).
E. Stock may be voting or nonvoting.
F. This form of business may use the cash method of accounting.
G. Corporate long-term capital gains and losses are deductible directly by the
shareholders to offset other personal capital gains or losses.
A broad-scope market strategy:
A.focuses on producing customized products.
B.provides substantial protection against competitors.
C.is used to reduce market uncertainty.
D.is based primarily on product quality.
Which of the following is a liability of newness?
A.Costs associated with learning new tasks are high.
B.Lack of established routines and processes give the venture a new slate.
C.Communication in informal systems is increased.
D.Market for potential consumers is limited.
A _____ is the joining of two firms in order to form a third company in which the
equity is shared.
A.majority interest
B.joint venture
C.product extension merger
D.minority interest
Notes payable is considered a(n) ________ on the balance sheet.
A.cash out-flow
B.current asset
C.current liability
D.long-term liability
Trade secrets are protected:
A.by the General Agreement on Tariffs and Trade.
B.by federal law.
C.by state law.
D.by the Library of Congress.
Which grant program requires partners at universities or other non-profit institutions?
A.The 504 program
B.Small Business Innovation Research
C.The SBA 7(a)
D.Small Business Technology Transfer
If the entrepreneur is constantly faced with significant changes in the marketing
strategy, then it is likely that:
A.there is insufficient monitoring of the plan.
B.the plan was not prepared properly.
C.the business marketing effort does not support the strategy.
D.there have been too many external factors that were difficult to predict.
What type of insurance would cover fire or burglary damage?
A.Property
B.Bonding
C.Life
D.Workers’ Compensation
Equity partnerships, royalty partnerships, and joint ventures are used in the
___________ stage of limited partnerships to reap the benefits of the effort.
A.funding
B.development
C.exit
D.all of these.
When determining how much help is needed to write the business plan an entrepreneur
should conduct a self-assessment. In this self-assessment which skill set would not be
considered?
A.product design
B.organizing
C.venture capital
D.people management
A _________ is a separate entity that involves a partnership between two or more active
participants.
A.merger
B.franchise
C.joint venture
D.leveraged buyout