38. A venture capital firm wants to invest in businesses with a high rate of return. In return, they will:
a.
invest large amounts of money.
b.
provide necessary assistance and advice.
c.
provide information to help the entrepreneur prosper.
d.
all of these.
e.
provide necessary assistance and advice and provide information to help the entrepreneur
prosper only.
39. Which of these refers to the financing that consists of funds that are invested in exchange for
ownership in the company?
a.
Venture-debt
b.
Debt financing
c.
Equity financing
d.
Franchising
e.
Licensing
40. Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she
decided to quit her job and make crafts full-time, selling them on her new company Web site. Which
tactic of becoming a business owner did Wendy use?
a.
Equity financing
b.
New business start-up
c.
Buying an existing business
d.
Buying a franchise
e.
Merger and acquisition
41. Which of these offers the advantage that the entrepreneur has the ability to develop and design the
business in the entrepreneur’s own way?
a.
Participate in a business incubator
b.
Start a new business
c.
Buy a franchise
d.
Buy an existing business
e.
All of these
42. An advantage of which of these tactics is that there is a shorter start-up time and an existing track
record?
a.
Participate in a business incubator
b.
Start a new business
c.
Buy a franchise
d.
Buy an existing business
e.
Debt financing
43. _____ refers to an arrangement by which the owner of a product or service allows others to purchase
the right to distribute the product or service with help from the owner.
a.
Franchising
b.
Business incubation
c.
Spinning-off
d.
Globalization
e.
Right offerings
44. _____ was one of the top 10 fastest-growing franchises in 2011.
a.
Arby’s
b.
Krispy Kreme
c.
Subway
d.
Wendy’s
e.
Dairy Queen
45. Which of these is true about the business incubator?
a.
It gives up control since every business is run the same way.
b.
It provides shared office space, management support services, and management advice.
c.
It develops an international business.
d.
It provides an established name and advertising.
e.
All of these.
46. The majority of the incubators are operated by:
a.
large corporations.
b.
non-profit organizations.
c.
small businesses.
d.
international businesses.
e.
college drop-outs.
47. Entrepreneurs who aspire to start online businesses implement all the following steps except:
a.
create a professional Web site.
b.
choose a domain name.
c.
build online relationships
d.
determine physical location.
e.
identify a profitable market niche.
48. Max is the Web site manager for a local florist. The company’s owner would like Max to redesign
the Web site so that customers can connect directly with florist employees on a daily basis about
products and specials. This relates to which step in establishing an online business?
a.
Finding a niche market
b.
Creating a professional Web site
c.
Choosing a target market
d.
Choosing a domain name
e.
Building online relationships
49. Marion is an entrepreneur. At this stage of his company‘s growth, his main concerns are do we have
enough customers and money. What stage of growth is Marion’s company in?
a.
Start-up
b.
Survival
c.
Takeoff
d.
Resource maturity
e.
Success
50. 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.
51. Samuel Rohrer is providing consumers with a new, unique business. The stage of the growth where his
business has demonstrated that it is a workable business entity is considered the:
a.
start-up stage.
b.
survival stage.
c.
success stage.
d.
takeoff stage.
e.
resource maturity stage.
52. At which stage of growth is the company if it is solidly based and profitable?
a.
Resource maturity
b.
Takeoff
c.
Survival
d.
Success
e.
Existence
53. Janelle is very innovative and attentive to detail. As she starts her own company, she leads her
employees and ensures that every detail is attended to. As her company grows, she finds it more
difficult to deal with and motivate her employees. She is more interested in the product. What stage of
growth is Janelle’s company going through?
a.
Resource maturity
b.
Takeoff
c.
Survival
d.
Success
e.
Existence
54. Formal planning, such as a strategic plan, is usually instituted during which stage?
a.
Start-up
b.
Survival
c.
Takeoff
d.
Success
e.
Resource maturity
55. During the _____ stage, the company will need to make greater use of budgets, standard cost systems,
and statistical reports.
a.
existence
b.
survival
c.
takeoff
d.
success
e.
maturity
56. The key problem, at the _____ stage of growth, is how to grow rapidly and finance that growth.
a.
existence
b.
survival
c.
takeoff
d.
resource maturity
e.
success
57. ABC company has made substantial financial gains, but may start to lose the advantages of small size.
Which stage of growth is this company experiencing?
a.
Resource maturity
b.
Takeoff
c.
Survival
d.
Success
e.
Existence
58. The Swingset Company is at the stage where if financing is available and it is properly managed, rapid
growth can occur. What stage is the Swingset Company experiencing?
a.
Resource maturity
b.
Takeoff
c.
Survival
d.
Success
e.
Start-up
59. During the latter stages of entrepreneurial growth, the manager:
a.
must learn to delegate and decentralize authority.
b.
must institute greater use of rules and procedures.
c.
must hire sufficient management to handle the growth.
d.
all of these.
e.
none of these.
60. Dawn, the finance manager of a sporting goods manufacturing company, uses accounting records to
track monthly operational budgets to ensure that the company’s financial targets are being met. This
is an important task in which stage of the managerial process?
a.
Delegating
b.
Planning
c.
Controlling
d.
Leading
e.
Organizing
61. Jamila is a successful artist and entrepreneur who makes all of her work out of recycled goods because
she believes in sustainability. She can be described as a social entrepreneur that is committed to:
a.
international human rights.
b.
environmental protection.
c.
children’s rights.
d.
industrial protectionism.
e.
consumerism.
CASE
Scenario – Holly and Trent
While many others dreamed about owning their own business, Holly Gabrel decided to do something
about it. Holly knew that being self-employed required long hours and hard work, but with the help of
her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and
Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses
now on the market. Holly and Trent obtained a patent on their invention, and began production and
marketing.
1. With the entrepreneurial personality, Holly can be expected to have all of the following traits except:
a.
internal locus of control.
b.
tolerance for ambiguity.
c.
high need to achieve.
d.
high uncertainty avoidance.
e.
all of these.
2. After fully developing their new business idea, Holly and Trent recognize the need to develop a
business plan. Typical business plans will include all of the following, except:
a.
mission or vision of the company.
b.
information about the suppliers.
c.
policy for extending credit to customers.
d.
analysis of critical risks that threaten success.
e.
all of these should be included.
3. If the business is legally Holly’s, then the business form would be:
a.
proprietorship.
b.
partnership.
c.
corporation.
d.
chapter S42.5.
e.
none of these.
COMPLETION
1. Entrepreneurs in the _____ category like the idea of working on something that is new, creative, or
personally meaningful.
2. The process of initiating a business venture, organizing it, and assuming its risks is known as _____.
3. A(n) _____ recognizes a viable idea for a business product or service and carries it out.
4. In the next decade, _____ and _____ businesses could end up being the emerging growth companies.
5. A human quality linked to entrepreneurship in which people are motivated to excel and pick situations
in which success is likely is called the _____.
6. _____ is the psychological characteristic that allows a person to be untroubled by disorder and
uncertainty.
7. _____ entrepreneurs are committed to both good business and changing the world for the better.
8. A(n)_____ is a document specifying the business details prepared by an entrepreneur in preparation
for opening a new business.
9. An unincorporated business owned by an individual for profit is known as a(n) _____.
10. A(n) _____ is an unincorporated business owned by two or more people.
11. A(n) _____ is an artificial entity created by the state and existing apart from its owners.
12. Borrowing money that has to be repaid at a later date in order to start a business is _____.
13. _____ financing consists of funds that are invested in exchange for ownership in the company.
14. A(n) _____ is a group of companies or individuals that invests money in new or expanding businesses
for ownership and potential profits.
15. _____ firms are groups of companies or individuals that invest money in exchange for a stake in the
company.
16. By _____, an entrepreneur has the advantage to develop and design the business in his/her own way.
17. _____ is an arrangement by which the owner of a product or service allows others to purchase the right
to distribute the product or service with help from the owner.
18. The _____ provides shared office space, management support services, and management advice to
entrepreneurs.
19. The majority of the incubators are operated by _____.
20. In the _____ stage, the main problems for entrepreneurial firms are producing the product or service
and obtaining customers.
21. The key problem, at the _____ stage of growth, is how to grow rapidly and finance that growth.
SHORT ANSWER
1. List five of the six characteristics of entrepreneurs.
2. Name three of the four ways entrepreneurs can become business owners.
3. List the five stages of growth for an entrepreneurial company.
ESSAY
1. Name and describe the five different categories of small business owners.
2. What is tolerance for ambiguity? Why is it an important trait?
3. Name five of the ten characteristics of a successful business plan.
4. Define a corporation and briefly discuss the primary advantages and disadvantages of forming a
corporation.
5. What is the fundamental difference between the suppliers of debt and equity financing?
6. What is a business incubator? How can it help a business?
7. List and briefly describe the stages of growth for an entrepreneurial company.