Melanie Summer spoke to an investor who is interested in her business idea. Melanie
offered to send the investor a copy of her full business plan, but the investor asked for a
short overview of the business plan instead. What portion of her business plan should
Melanie send the investor?
A) Marketing plan
B) Executive summary
C) Elevator pitch
D) Company description
E) Operations plan
Answer:
A liquidity event accomplishes which of the following purposes?
A) Provides a business sufficient funding to operate for up to a year without raising
additional funding.
B) Provides the founders of a firm a salary.
C) Converts some or all of a company’s stock to cash.
D) Allows the founders of a firm to sell stock to the public.
E) Allows a business to liquidate in an ethical and cost-effective manner.
Answer:
Jeremy Westbrook owns an organic food company which has increased both its profits
and revenues over an extended period of time. Jeremy’s firm is experiencing ________
growth.
A) persistent
B) unremitting
C) sustained
D) unbroken
E) moderate
Answer:
According to the textbook, the four characteristics of successful entrepreneurs are
________.
A) passion for the business, on the cutting edge of technological change, very
charismatic, and tenacity despite failure
B) young and energetic, passion for the business, product/customer focus, and seeks
recognition
C) passion for the business, tenacity despite failure, product/customer focus, and
execution intelligence
D) on the cutting edge of technological change, forward thinking, tenacity despite
failure, and product/customer focus
E) passion for the business, seeks recognition, young and energetic, and execution
intelligence
Answer:
On a firm’s income statement, net sales consists of ________.
A) operating expenses minus cost of sales
B) total sales minus allowances for returned goods and discounts
C) cost of sales minus allowances for returned goods and discounts
D) cost of sales minus operating expenses
E) total sales minus operating expenses
Answer:
Before Kimberly Campbell opened her jiffy print store, she processed several large
print jobs for local merchants for free, to demonstrate the quality of her service and to
solicit feedback. Two of the merchants wrote favorable reviews of Kimberly’s service,
and agreed to let Kimberly post the reviews on her company’s Web site. The companies
that wrote the favorable reviews are referred to as ________.
A) appreciation reports
B) acknowledgement accounts
C) referent accounts
D) tribute reports
E) approval reports
Answer:
Which of the following is not one of the four elements of the core strategy section of
the Barringer/Ireland Business Model Template?
A) Business mission
B) Key assets
C) Basis of differentiation
D) Target market
E) Product/market scope
Answer:
Which of the following factors is a negative as it pertains to the financial feasibility of a
business venture?
A) Steady and rapid growth in sales during the first five to seven years in a clearly
defined market niche
B) High percentage of recurring revenuemeaning that once a firm wins a client, the
client will provide recurring sources of revenue
C) Inability to forecast income and expenses with a reasonable degree of accuracy
D) Internally generated funds to finance and sustain growth
E) Availability of an exit opportunity for investors to convert equity into cash
Answer:
The two types of crowdfunding sites are ________-based and ________-based.
A) rewards; equity
B) equity; debt
C) expectations; performance
D) private; nonprivate
E) domestic; international
Answer:
Megan Johnson owns a kitchen and bathroom cabinet company. Her market research is
telling her that she is taking business away from the large home improvement stores in
her trade area. One thing that Megan is worried about is that the large stores might fight
back by lowering their prices, which hurts everyone except the consumer. The
day-to-day challenge of firm growth that this example is referring to is ________.
A) quality control
B) price stability
C) capital constraints
D) cash flow management
E) benchmarking
Answer:
Katherine Chapman recently launched a firm in the clothing industry, targeting 13-17
year olds. One thing Katherine thinks she has accomplished is producing products that
have universal appeal, so she will not vary her approach from country to country.
Katherine is pursuing a ________ strategy.
A) universal
B) multidomestic
C) contemporary
D) global
E) home
Answer:
In the five-stage creative process, the flash of recognition, or what is sometimes
referred to as the “eureka” experience, occurs in the ________ stage.
A) insight
B) preparation
C) incubation
D) elaboration
E) evaluation
Answer:
New product development, other product-related strategies, and international expansion
are examples of ________ growth strategies.
A) external
B) domestic
C) primary
D) internal
E) in-house
Answer:
A firm’s ________ describe(s) the ways in which it makes money.
A) proceeds account
B) break-even analysis
C) revenue streams
D) cash flow
E) income statement
Answer:
________ feasibility analysis is an assessment of the overall appeal of the industry and
market for the product or service being proposed.
A) Institutional
B) Financial
C) Organizational
D) Product/service
E) Industry/target market
Answer:
According to the textbook, the first rule of buying a franchise is ________.
A) asking for a copy of the franchisor’s annual report
B) checking the profitability of similar franchises
C) making sure the franchisor’s industry is conductive to franchising
D) making proper arrangements for financing
E) not making a hasty decision
Answer:
Internally generated growth is often called organic growth because it does not rely on
________.
A) outside intervention
B) its own skills and capabilities
C) external funding
D) internal leadership
E) internal design expertise
Answer:
Jenna Franklin is completing the portion of the Barringer/Ireland Business Model
Template that describes the most important costs that will be incurred to support her
business model. Jenna is completing the ________ structure box in the business model
template.
A) expense
B) outlay
C) payment
D) overhead
E) cost
Answer:
Which of the following statements is correct regarding the concept of branding?
A) Brands cannot be built through advertising, public relations, sponsorships, social
media, or similar techniques.
B) A company doesn’t normally want its customers to identify with its brand.
C) Startups usually start with an established brand.
D) A brand can be one of a company’s most valuable assets.
E) A brand can denote a negative impression of a company.
Answer:
Paul Mason’s firm sells medical equipment to heart surgeons. The company fields a
direct sales force that travels the country demonstrating its equipment to heart surgeons
and hospital administrators. Recently, Paul’s company started producing equipment for
eye surgeons, partly to maximize the value of his sales force, which can now call on
both heart surgeons and eye surgeons when it makes hospital visits. Paul’s firm is
attempting to capture economies of ________ through this strategy.
A) reach
B) scope
C) capacity
D) range
E) scale
Answer:
Which of the following is not a recommended guideline for writing a business plan?
A) To make the best impression, a business plan should follow an unconventional
structure and stand out in some dramatic way.
B) A business plan needs to project a sense of anticipation and excitement about the
possibilities that surround a new venture.
C) For most plans, 25 to 35 pages is sufficient.
D) A business plan should look sharp, but not a lot of money should be spent on the
physical appearance of the plan.
E) Shy away from using a lot of boldfaced type, italics, clip art, and different font sizes
and colors when preparing a business plan.
Answer:
There has been ________ in the number of minority entrepreneurs in the United States
over the past several years.
A) a moderate increase
B) a substantial decrease
C) no meaningful change
D) a substantial increase
E) a moderate decrease
Answer:
In regard to international franchising, under a(n) ________ franchise agreement, the
U.S. franchisor grants the rights to an individual or company (the developer) to develop
multiple franchised businesses within a country or territory.
A) indirect
B) global
C) concurrent
D) direct
E) express
Answer:
A(n) ________ is a panel of experts who are asked by a firm’s managers to provide
counsel and advice on an ongoing basis.
A) consultation board
B) idea panel
C) counseling panel
D) advisory board
E) suggestion panel
Answer:
Which of the following is not one of the rules for a formal brainstorming session?
A) No criticism is allowed.
B) The session moves quickly.
C) Freewheeling is encouraged.
D) Leapfrogging is encouraged.
E) The session is used for decision making.
Answer:
In the context of competitor analysis, ________ competitors are companies that are not
yet direct or indirect competitors but could move into one of these roles at any time.
A) stable
B) roundabout
C) impending
D) approximate
E) future
Answer:
A firm’s sales process ________.
A) is typically not put in place until a year or more after a startup launches
B) describes its branding strategy
C) depicts the steps it goes through to identify prospects and close sales
D) describes its social media strategy
E) depicts the steps it goes through to identify its target market and positioning strategy
Answer:
According to a concept called ________ theory, it is more effective for the units of a
growing chain to be run by franchisees than by managers because managers are usually
paid a salary and may not be as committed to the success of their individual units as
franchisees, who are in effect the owners of the units they manage.
A) incentive
B) stimulus
C) agency
D) stewardship
E) motivation
Answer:
The two components of product/service feasibility analysis are ________ and
________.
A) product/service value; product/service affordability
B) product/service demand; product/service timeliness
C) product/service timeliness; product/service value
D) product/service durability; product/service value
E) product/service desirability; product/service demand
Answer:
Which of the following statements regarding firm growth is incorrect?
A) Most entrepreneurial firms want to grow.
B) Growth in sales revenue is a poor indicator of an entrepreneurial firm’s potential to
survive today and be successful tomorrow.
C) Firm growth is exciting.
D) Many entrepreneurial firms have grown quickly, producing impressive results for
their employees and owners.
E) Growing a business successfully requires preparation, good management, and an
appreciation of the issues involved.
Answer:
A company’s mission statement should be placed in the ________ section of its
business plan.
A) marketing plan
B) management team and company structure
C) company description
D) market analysis
E) industry analysis
Answer: