Management needs to look at the marketing plan as a guide for implementing marketing
decision making and not as a generalized, superficial document.
In order to increase their chances for success, an entrepreneur should approach all
possible venture capital firms with proposals.
To prevent pressures on the financial resources created by growth, the venture should
avoid resource slack.
For a global entrepreneur, technological environment variations are minimal since firms
produce mostly standardized, relatively uniform products that can be sorted to meet
industry standards.
The majority of bankruptcies are mid-size businesses.
By buying a franchise the entrepreneur reduces the amount of money available for
advertising.
In encouraging a culture for corporate entrepreneurship, using older, proven, technology
is recommended in order to increase stability in the organization.
In corporate entrepreneurship, trial and error are encouraged.
The reservation price is the price at which the entrepreneur is ready to accept the
agreement.
It is harder to charge a high price if the company operates in a differentiated product
market.
Nanotechnology would be classified as a breakthrough technology.
Passing the business to an employee ensures the new principal is familiar with the
business and the market.
In building a marketing plan, the entrepreneur should use a process designed as a
pyramid, starting with narrow data and working down to broader-based information.
Investors accept that the management team draws a large salary for their contributions
in early operations.
One disadvantage to an acquisition is that they are often a slow way to expand.
Entrepreneurially run firms are driven by controlled resources whereas traditionally
managed firms are driven by perception of opportunity.
Marketing research involves the gathering of information in order to determine who
will buy the product and what the most effective promotion strategy would be.
Asking “How is this problem similar to problems I’ve already solved”? is an example of
a connection task.
The entrepreneur should always design and build his own webpage to maintain strategic
control.
A copyright can be used to protect sculptures or blueprints.
There are three general classifications for exporting; direct, indirect and third-party.
One advantage to an acquisition is that there is an established customer base.
The Family Business Institute indicates that about 12 percent of successful ventures
survive into the third generation of ownership.
In preparing the business plan, entrepreneurs can provide their own perspective and
should consider the needs of external sources.
Entrepreneurs focus on how to minimize resources needed whereas traditional firms
focus on accumulating resources.
In a limited liability partnership (LLP), the death or withdrawal of a partner dissolves
the partnership.
After the completion of the preliminary preparation, the first public offering normally
requires three to six months to prepare, print, and file the registration statement with the
SEC.
Venture capital firms are pools of equity managed by large corporations.
Using a penetration strategy, the entrepreneur attempts to encourage existing customers
to buy more of the firm’s current products.
The first step in preparing the marketing plan is to define the target market.
Most entrepreneurs could benefit from implementing time management techniques.
The most expensive type of business to start is the partnership.
Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an
unlimited number of securities to 35 investors and an unlimited number of accredited
investors and relatives of issuers.
__________ financing involves using any possible methods for conserving cash.
A.Bootstrapping
B.SBIR
C.Private placement
D.Floor planning
Which of the following ways of distributing the income of corporations is taxed twice?
A.Bonus
B.Salary
C.Profit sharing
D.Dividends
Which of the following is not one of the main functions of the management team
according to text?
A.Execute the business plan.
B.Identify fundamental changes in the business plan as they occur.
C.Make adjustments based on changes in the environment and market that will maintain
profitability.
D.Help the entrepreneur write the business plan.
Growth of the venture:
A.lessens pressures on existing financial resources.
B.causes pressures on human resources.
C.lessens legitimacy of the firm.
D.lessens time spent on management decision making.
Pro forma cash flow is
A.cash flow based on the actual.
B.calculated from subtracting assets from liabilities.
C.cash flow calculated on past receipts and expenses.
D.projected cash inflow and outflow.
The North American Free Trade Agreement (NAFTA) is between which of the
following countries?
A.United States, Brazil, and Canada
B.United States, Mexico, and Brazil
C.United States, Argentina, and Brazil
D.United States, Canada, and Mexico
A two to three year plan to sell a business to employees is:
A.an ESOP.
B.an acquisition.
C.succession.
D.the most popular method of exit.
______ is defined as the risk of interference with the operations of the venture.
A.Transfer risk
B.Ownership risk
C.Investment risk
D.Operating risk
It is a practice in some cultures to hug and even kiss when greeting a known business
partner. What aspect of nonverbal language is being referred to in the above example?
A.Time
B.Business relationship
C.Space
D.Customs
Observation, interviewing, and focus groups are examples of collecting:
A.marketing data.
B.primary data.
C.secondary data.
D.target data.
Which of the terms in a franchise agreement is the most likely cause of a lawsuit?
A.Termination
B.Exclusivity of territory
C.Schedule of payments
D.Initial price of the franchise
Concerns regarding roads, electricity, banking facilities, communication, and
educational systems have to do with a country’s:
A.infrastructure.
B.balance of payments.
C.political climate.
D.economics.
A market development strategy would not involve:
A.selling the existing product in new locations.
B.offering the same product to a different demographic group.
C.using customer experience to develop new uses for the existing product.
D.selling new products to consumer’s purchasing the firm’s existing products.
Current liabilities are:
A.those liabilities due for payment within a year.
B.everything owed to creditors.
C.everything of value owned by the company.
D.those liabilities that represent the excess over all assets.
In projecting operating expenses for the second and third year costs like ______ are
likely to remain stable unless new equipment or additional space is purchased.
A.cost of goods sold
B.gross profit
C.advertising
D.insurance
Which survey method is the most expensive?
A.Telephone
B.Mail
C.Personal
D.Internet
Which of the methods of valuation of a company provides the potential investor with
the best estimate of the probable return on investment?
A.Book value
B.Earnings approach
C.Present value of future cash flows
D.Liquidation value
In an S corporation:
A.gains or losses of the business are separate from the personal income of the
shareholder.
B.shareholders retain unlimited liability.
C.only one class of stock is permitted.
D.most fringe benefits for shareholders can be deducted.
Venture capital firms prefer to invest in:
A.high-potential ventures.
B.conventional small businesses.
C.privately-held middle market firms.
D.ventures during the early stages.
To build a successful organization culture the entrepreneur:
A.should focus and not try out different things.
B.needs to remember that it is easier to change a person’s attitude than it is to change
the person’s behavior.
C.should spend extra time in the hiring process.
D.must create a workplace where communication from the top down is encouraged.
The Occupational Safety and Health Act (OSHA) mandated that first-aid kits be
available in business establishments employing more than three people. A newly
formed company was successful in developing first-aid kits that allowed companies to
comply with the standards of the act. This is an example of:
A.distribution channels as an excellent source for new ideas.
B.existing products and services as a source for new ideas.
C.potential consumers as a source for new ideas.
D.government regulations as a source for new product ideas.
The longest stage of the venture capital process, at 1-3 months, is:
A.preliminary screening.
B.final approval.
C.agreement on principal terms.
D.due diligence.
_____ is not considered a nonequity arrangement.
A.Turn-key projects
B.Exporting
C.Licensing
D.Management contracts
Going public:
A.is often viewed negatively by risk-averse venture capitalists.
B.ensures that the company gains control in decision making.
C.increases flexibility for the company.
D.enhances the company’s ability to obtain future funds.
Which section of the business plan is used for initial screening and provides the starting
point for the venture-capital process?
A.The executive summary
B.The industry and market analysis
C.The mission statement
D.Strategic plan
A bank may finance up to ______ of a company’s accounts receivable.
A.50%
B.60%
C.70%
D.80%
A ______ strategy that copies products that already exist and attempts to build an
advantage through minor variations.
A.technological
B.narrow scope
C.me-too
D.broad scope
How many stages are in the product planning and development process?
A.Two
B.Three
C.Four
D.Five
The bootstrap purchase of assets:
A.is a direct purchase of the entire assets of a firm.
B.means the entrepreneur purchases a small percentage of a firm for cash.
C.frequently results in a long-term capital gain to the seller.
D.results in double taxation.
Stress points are a result of all of the following except:
A.sales.
B.the need for new key personnel.
C.major capital investment.
D.lack of time.
Licensing represents opportunities for:
A.expanding into new markets.
B.reach more customers in existing target markets.
C.an entrepreneur to profit with less risk and costly start-up investment.
D.an entrepreneur to gain access to others’ copyrights, trademarks and patents.
Explain the advantages and disadvantages of an ESOP.
According to the text, the most prevalent reason for mergers is:
A.taxation.
B.economies of scale.
C.currency fluctuations.
D.to combine complementary resources.
Discuss the main advantages of an acquisition.
Describe the difference between a moral and professional support network and give
examples of who might fit into each network. Who do entrepreneurs typically cite as
their biggest supporters?
What are the main benefits (to the franchisee) of franchising?
Explain the 4 types of entrepreneurs and firm growth.
Explain why an entrepreneur might adopt an imitation strategy.
Identify the main disadvantages of being a first-mover.
List the 5 main first-mover advantages discussed in the text.
Identify and describe the three major types of diversification growth strategies.
Describe the difference between the causal process and the effectuation process.
Identify and briefly explain the 4 ways that lead time can be extended by creating
barriers to entry. Give examples where appropriate.
Explain the three major causes of “liabilities of newness.”
Discuss brainstorming, its definitions and tips for having a successful brainstorming
session.
Discuss the six main functions of a board of directors.
Identify and explain the three basic questions a marketing plan should answer.
Identify and describe the three different types of patents.
What benefits can an entrepreneur receive from better time management?