978-1259912191 Chapter 1 Solutions Manual Part 1

Chapter 1: The 21st Century Entrepreneur

Review Questions – p. 17

1. How do entrepreneurial businesses impact the economy?

2. Name several entrepreneurs who have grown their businesses into

major organizations.

Henry Ford (Ford Motor), Steve Jobs ( Apple Computer), Ron Brilland and Pat

3. Explain what is meant by the science and the art of starting and

managing a business.

4. How have entrepreneurial businesses impacted the growth of the United

States?

5. Why does the entrepreneur need to be honest about their motivation for

starting the company?

6. What differentiates an entrepreneurial business from one that is a

venture-backed business?

Venture-backed businesses include the following: are well-funded; formed

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Chapter 1: The 21st Century Entrepreneur

Individual Exercises – p. 17

Student responses will vary.

Class Activities and Sample Assignments

1. Ask students to discuss why individuals want to be entrepreneurs. What motivations

are mentioned in the text? Discuss other reasons why individuals pursue

entrepreneurship. Next, ask students if they want to become entrepreneurs. Discuss

why or why not. Write their responses on a flip chart or blackboard. (LO 1-3)

2. Ask students to interview an entrepreneurial business owner in their community. The

interview questions should detail what motivated that individual to start the business,

how many employees work at the business, and a description of the stakeholders.

Include questions on the best and worst thing about owning the business and if they

would do it again. Next, ask students to prepare a report on the outcome of the

interview and/or present their findings to the class. (LO 1-1, 1-2, 1-3, 1-4, 1-5, 1-6)

3. In groups, ask students to discuss why more than half of new entrepreneurial

businesses fail within the first four years of operation. Then, ask them what they

would change to assure that more entrepreneurial businesses survive longer than

four years. Discuss a restaurant business, an automotive manufacturing business,

online business and a retail business. (LO 1-1)

4. In groups, brainstorm and develop a list of all possible new entrepreneurial

opportunities that might be popular in the year 2020; and write them on the board or

a flip chart. Discuss each potential business opportunity and why it is important in

the future business environment. (LO 1-1)

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5. Ask students to compare and contrast the difference in business plans for

entrepreneurial businesses and venture capital-backed firms. Discuss why business

plan development is important for these new ventures in the planning process. (LO

1-6)

6. When were the first entrepreneurial businesses established? Discuss the differences

in new entrepreneurial businesses compared to today’s entrepreneurial businesses.

Include differences in technology, values, and the purposes of the businesses. (LO

1-2)

7. In groups, ask students to define economies of scale. Discuss the advantages and

disadvantage of economies of scale in small and large businesses. Which firms are

likely to operate more efficiently and why? (LO 1-1)

Discussion Questions for Online/Hybrid classes

1. Define economies of scale and discuss why they are important in both large and

small industries? (LO 1-1)

2. If you choose to become an entrepreneur, which business opportunity would you

pursue and why? (LO 1-1)

3. Discuss the advantages and disadvantages associated with entrepreneurial

business ownership. (LO 1-3)

4. Define a stakeholder and discuss the individuals and groups that qualify as

stakeholders. (LO 1-3)

5. In reference to the timeline of business in the United States, why was the period

of the Great Depression harder on smaller business than on larger businesses?

(LO 1-2)

6. What does the government do to enhance the success of SMEs? Why? (LO

1-5)

7. Discuss the characteristics of an entrepreneurial business start-up. Why are

entrepreneurial businesses important in the United States and abroad? (LO

1-6)

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8. Describe the differences between entrepreneurial businesses and venture

capital-backed firms. (LO 1-6)

9. What do new entrepreneurs plan prior to the establishment of their new small

business? (LO 1-6)

10.What is a harvest plan? Why is it important to consider a harvest plan? (LO 1-6)

Discussion Questions for Online/Hybrid classes- Responses

1. Define economies of scale and discuss why they are important in both

large and small industries? (LO 1-1) Economies of scale allows for the

2. If you choose to become an entrepreneur, which business opportunity

would you pursue and why? (LO 1-1) Responses will vary.

3. Discuss the advantages and disadvantages associated with entrepreneurial

business ownership. (LO 1-3) Advantages – being your own boss, controlling

4. Define a stakeholder and discuss the individuals and groups that qualify as

stakeholders. (LO 1-3) Stakeholders are individuals or other organizations that

5. In reference to the timeline of business in the United States, why was the

period of the Great Depression harder on smaller business than on larger

businesses? (LO 1-2) Small businesses did not have the resources of larger

6. What does the government do to enhance the success of SMEs? Why?

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7. Why are entrepreneurial businesses important in the United States and

abroad? (LO 1-5) Small businesses are more focused, respond more quickly

8. Discuss the characteristics of an entrepreneurial business start-up. (LO l-6)

9. Describe the differences between entrepreneurial businesses and venture

capital-backed firms.(LO 1-6) Venture-backed firms are well funded, are formed

10.What do new entrepreneurs plan prior to the establishment of their new

small business? (LO 1-6) New entrepreneurs should develop a business plan

11. What is a harvest plan? Why is it important to consider a harvest plan?

Lecture Links

Lecture Link 1.1: Entrepreneurs and New Small Business Planning Goals.

(LO 1-6)

The authors of the text emphasize that the three initial goals for new entrepreneurial

business owners are to guide the new business in its early stages of development, have

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Chapter 1: The 21st Century Entrepreneur

those goals in writing, and reflect how the business will be financed and managed and

how it will maintain its competitive advantage.

The Counselors to America’s Small Business i web site provides individuals information

to assist individuals with their small business needs. Visit this web site at

http://www.score.org and click on the “start-up” tab and preview free business

information, related business links, entrepreneurial newsletters, and other learning

resources and articles. Consider these resources when you implement the initial plans

for your new small business development.

Now it is time to start planning for your new entrepreneurial business.

1. What type of new entrepreneurial business do you want to pursue? Why?

2. Describe the products and/or services will you offer in your new entrepreneurial

business?

3. List your goals for this new business.

4. Discuss how will you finance your initial operations?

5. Discuss who will be involved in your new business.

6. Compare your intended products and/or services to those of your competitors. How will

you assure your new business maintains a competitive advantage?

7. Discuss how your new business will implement positive change in your community?

Lecture Link 1.2: The Advantages of the Small Business Administration (SBA)

(LO 1-1)

The Small Business Administration (SBA)ii provides a new small business owner with

many tools and resources to enhance the owner’s business planning and development,

as well as other tools to enhance the organizational effectiveness of the new small

business. Visit the web site at www.sba.gov/ and click on the “local assistance tab”.

Here you can find a Small Business Administration (SBA) office near where you reside.

Review the tools that you might find important for you to consider when you initiate your

new small business.

Discussion Questions:

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Chapter 1: The 21st Century Entrepreneur

1. Discuss the various services that the Small Business Administration (SBA) can

provide to business owners. Summarize how those services can assist in starting

a new entrepreneurial business venture.

2. Ask students to find the local office of the Small Business Administration (SBA)

where they reside. What beneficial services could the SBA provide? Why?

3. What are the steps required to open an entrepreneurial business? What other

important details should be considered?

4. Discuss what type of assistance is needed to enhance the start-up initiatives of a

new business?

Lecture Link 1.2: The Advantages of the Small Business Administration (SBA)

(LO 1-1) – Notes

Discussion Questions:

1. Discuss the various services that the Small Business Administration (SBA)

provides to business owners. Summarize how those services can assist

you in your new entrepreneurial business venture.

2. Ask students to find the local office of the Small Business Administration

(SBA) where they reside. What services would be beneficial to a new

business? Why? Responses will vary.

3. What are the steps required to open an entrepreneurial business? What

other important details should you consider? According to the SBA website,

4. Discuss what type of assistance you need to enhance your new business

start-up initiatives? Responses will vary but may include professional help,

family help and funding.

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Discussion Questions:

1. Explain how the Overseas Private Investment Corporation (OPIC) enhances the

growth and development of new small businesses in the United States and abroad.

2. Summarize the advantages and disadvantages associated with implementing such

programs.

3. Discuss the challenges that entrepreneurs experience in other countries versus the

United States.

4. Discuss the common goals associated for entrepreneurs worldwide.

Lecture Link 1.3: Entrepreneurial Business around the World

(LO 1-5) – Notes

Discussion Questions:

1. Explain how the Overseas Private Investment Corporation (OPIC) enhances

the growth and development of new small businesses in the United States

2. Summarize the advantages and disadvantages associated with

implementing such programs? The purpose of these programs is to reduce

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3. Discuss the challenges that entrepreneurs experience in other countries

versus the United States. These entrepreneurs often cannot obtain credit to

4. Discuss the common goals associated for entrepreneurs worldwide. The

5. Bonus Internet Exercises

Bonus Internet Exercise 1.1: Decline in Employees at Fortune 500 Companies

(LO 1-1, 1-5)

In Chapter One, the students were provided an overview of the decline in employees at

Fortune 500 companies; and a growth in entrepreneurial businesses, respectively (text

page 4). Bamford and Bruton (2014) stated, “Whereas corporate America has been

downsizing, the rate of small-business start-ups has grown.” (text page 4). Conduct

research and identify some Fortune 500 companies on the internet and complete the

following activities with detailed responses.

Discussion Questions:

1. Locate and list at least five Fortune 500 companies. (Make a note of their stock

symbol for question three and question four.

2. For each of these five companies, research and list the number of employees

that are employed at each firm.

3. Complete additional research and list the number of employees in those

companies for the past ten years. Refer to question one to note the stock symbol

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at each firm. (Hint: Statistical data is found, in many cases, by visiting

yahoo.com, click on finance, and next insert the stock tickler symbol for the

company as instructed. Next, click on statistical or historical data to reveal the

data needed to answer this question).

4. Discuss the world-wide trends associated with the reduction in the workforce at

each Fortune 500 company and describe how that reduction relates to the growth

in new small businesses in the United States.

Bonus Internet Exercise 1.1: Decline in Employees at Fortune 500 Companies- Notes

(LO 1-1, 1-5) – Notes

Student responses will vary based on which companies they select.Bonus Internet

Exercise 1.2: Entrepreneurial Success Story of Dell Computer

(LO 1-3)

Ask students to conduct research on the internet related to Michael Dell (Dell

Computers) and do specific research about the company from the time it was

established until now.

Discussion Questions:

1. When did Michael Dell start his business?

2. How did he start the business? Did he require capital? Did he have a partner?

Discuss the outcome of your research.

3. Why did he grow and expand his business model?

4. Discuss how his entrepreneurial skills and knowledge assisted him to achieve the

success that his company enjoys today. Discuss why he was successful.

Bonus Internet Exercise 1.2: Entrepreneurial Success Story of Dell Computer

(LO 1-3) – Notes

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iCounselor’s to America’s Small Business. (2014). http://www.score.org/, Retrieved on

September 25, 2014.

ii Small Business Administration (SBA). (2014), www.sba.gov, Retrieved on September 25,

2014