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Ent 201 Midterm

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Multiple choice and true/false from the midterm study guide.
barnettalex09
Quiz by barnettalex09, updated more than 1 year ago
barnettalex09
Created by barnettalex09 about 9 years ago
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Resource summary

Question 1

Question
Small business is the foundation for all business.
Answer
  • True
  • False

Question 2

Question
Fifty percent of businesses fail within the first four years.
Answer
  • True
  • False

Question 3

Question
A small business start up is designed to take advantage of the skills of the founder or founders.
Answer
  • True
  • False

Question 4

Question
One major aspect of a small business plan, it allows the owner to put information down in writing allowing for evaluation and honest analysis.
Answer
  • True
  • False

Question 5

Question
Small-business growth is important in the United States and the world.
Answer
  • True
  • False

Question 6

Question
The Fortune 500 companies employ ___________________ employees than ten years ago.
Answer
  • more
  • same
  • fewer
  • younger

Question 7

Question
A customer of a small business could be considered an important stakeholder to the success of a company.
Answer
  • True
  • False

Question 8

Question
A small business' harvest plan is to put the profits back in the company.
Answer
  • True
  • False

Question 9

Question
Individuals or other organizations that impact the success of a business are called
Answer
  • corporate managers
  • Capitalists
  • Stakeholders
  • Owners

Question 10

Question
The largest group of new business owners is
Answer
  • Hispanics
  • retired men
  • women
  • Asians

Question 11

Question
Small business resources are more _________________________ than large firms.
Answer
  • plentiful
  • constrained
  • restrained
  • inverse ration

Question 12

Question
A small business owner's relationships with key suppliers and customers are of relatively little importance in a business' success.
Answer
  • True
  • False

Question 13

Question
The most important person in a small business is the founder.
Answer
  • True
  • False

Question 14

Question
One advantage that a large firm has over a small firm is economies of scale.
Answer
  • True
  • False

Question 15

Question
The owner must be aware of his own tolerance of risk and establish a business that is consistent with that tolerance.
Answer
  • True
  • False

Question 16

Question
Starting a new business could result from a particular event or condition within an individual's environment.
Answer
  • True
  • False

Question 17

Question
Established businesses may be hesitant about buying from a start-up small business.
Answer
  • True
  • False

Question 18

Question
Family members are in a unique position to keep an individual focused on pursuing the wrong approach to an issue.
Answer
  • True
  • False

Question 19

Question
All of these are advantages for a small business except:
Answer
  • Respond quickly to changes
  • Owned and run by the same person
  • Economies of scale
  • Greater flexibility

Question 20

Question
____________________ states that individuals act to maximize their own individual benefit.
Answer
  • Individual benefit theory
  • Organizational benefit theory
  • Self fulfilling prophecy
  • Agency theory

Question 21

Question
The potential entrepreneur needs to consider ____________ when starting a new business.
Answer
  • risk tolerance
  • prior experience
  • personality orientation
  • all of the above

Question 22

Question
The term for when a new business has reached a level where revenue coming into the firm is sufficient to cover expenses:
Answer
  • Equal financial ratio
  • No risk level
  • Risk tolerance
  • Break-even point

Question 23

Question
When should an owner ensure there are sufficient financial resources to operate the business?
Answer
  • Prior to the start
  • Opening day
  • First payroll
  • Six month review

Question 24

Question
The small business owner must have the necessary skills and must understand the marketplace.
Answer
  • True
  • False

Question 25

Question
Large firms can respond more quickly to changes around them and fill niches better than small businesses.
Answer
  • True
  • False

Question 26

Question
Many new businesses are formed as a result of an entrepreneur's previous work experience.
Answer
  • True
  • False

Question 27

Question
New businesses are more likely to be successful when an entrepreneur creates a product or service before there is a need in the marketplace.
Answer
  • True
  • False

Question 28

Question
A potential owner must be realistic about its competitors in products and the volume of sales.
Answer
  • True
  • False

Question 29

Question
One of the greatest risks to a new business is fast growth.
Answer
  • True
  • False

Question 30

Question
An example of an idea for a new startup from a hobby is _________________.
Answer
  • A sports card collector who bought and sold cards for a year to build a personal collection, deciding to become a sports card dealer.
  • A computer salesperson seeing the possibility of opening a new electronics store in a different part of the city.
  • A purposeful exploration to find a new idea.
  • A baker, who tosses ingredients together to see what they taste like.

Question 31

Question
In forming a new business, the first thing a founder should do is:
Answer
  • Analyze the market
  • List their personal skill set
  • Obtain financial support
  • Hire a lawyer

Question 32

Question
A small business owner must possess all of the following except:
Answer
  • Necessary skills
  • In depth understanding of the market
  • Passion for starting a business
  • Follow a sequential formula

Question 33

Question
Potential owners should examine all of these specific areas except:
Answer
  • Work experience
  • Financial history
  • Education
  • Family history

Question 34

Question
The process of generating new business ideas is something that occurs automatically.
Answer
  • True
  • False

Question 35

Question
Potential generation of new business ideas occur:
Answer
  • When dismissing a promising idea.
  • When copying an existing business.
  • Automatically.
  • Because of the process of identifying skills and opportunities in the market.

Question 36

Question
Mark brings his friends together to generate ideas on his new business. This is called ________.
Answer
  • business meeting
  • gap analysis
  • brainstorming
  • focus group

Question 37

Question
_________ is the threat to the success of a new business related to its ability to establish and maintain a high margin product or service.
Answer
  • Profit margin
  • Sales generation scheme
  • Operational financing
  • Deficit gap

Question 38

Question
A small business owner must understand when an opportunity for a new business is truly an opportunity.
Answer
  • True
  • False

Question 39

Question
An owner, when researching a new business, needs to be aware of all potential customers.
Answer
  • True
  • False

Question 40

Question
New business owners do not need to identify customer needs because the competitors already have.
Answer
  • True
  • False

Question 41

Question
A major cause for failure of a new business is lack of focus on the competitive advantage.
Answer
  • True
  • False

Question 42

Question
A small business can compete on a cost basis with a larger firm.
Answer
  • True
  • False

Question 43

Question
An owner, when researching a new business, needs to be aware of, and be able to describe, all potential customers.
Answer
  • True
  • False

Question 44

Question
The first section of an external analysis is to:
Answer
  • research potential substitutes.
  • develop a competitive edge.
  • identify potential customers.
  • determine in which industry the new business will compete.

Question 45

Question
Companies will ___________ their knowledge if your business is not a potential competitor.
Answer
  • share
  • not share
  • hide
  • distort

Question 46

Question
__________ is the edge a business has over competing businesses.
Answer
  • Competitive advantage
  • Benchmarking
  • Criteria related advantage
  • Competitive map

Question 47

Question
______________ is an area of business that uses standards that are necessary for the business.
Answer
  • Competitive map
  • Benchmarking
  • Unorthodox practices
  • Orthodox practices

Question 48

Question
___________ describes those areas of a business that are unique or unusual as compared to standard practices of the industry.
Answer
  • Competitive map
  • Benchmarking
  • Unorthodox practices
  • Orthodox practices

Question 49

Question
A competitive advantage in a business could be ____________________.
Answer
  • location
  • product selection
  • activity of the firm
  • all of the above

Question 50

Question
A(n) ___________ exists if the service or product performs a similar function.
Answer
  • trade-in
  • substitute
  • elasticity of demand
  • product/service flexibility

Question 51

Question
An entrepreneur cannot leave his or her business due to the amount of money that was invested. This is called a(n) ______________.
Answer
  • harvest plan
  • exit strategy
  • benchmarking
  • exit barrier

Question 52

Question
______________ demonstrates how easy it is for a customer to switch to substitutes.
Answer
  • Elasticity of demand
  • Competitive map
  • Trade-ins
  • Benchmarking

Question 53

Question
The mission of a business needs to be actionable, which means assist employees to make decisions.
Answer
  • True
  • False

Question 54

Question
The mission statement and strategies can be developed after identifying potential customers.
Answer
  • True
  • False

Question 55

Question
A business owner should never change its mission statement or strategy.
Answer
  • True
  • False

Question 56

Question
A sustainable competitive advantage is an advantage that other firms cannot immediately copy.
Answer
  • True
  • False

Question 57

Question
Michael Porter describes a low cost strategy as a company seeking to be the lowest cost firm in the industry.
Answer
  • True
  • False

Question 58

Question
An overall strategy assists the business by targeting its effort in specific areas.
Answer
  • True
  • False

Question 59

Question
It is critical for a new business to conserve its resources and focus on areas that have potential to maximize the firms' resources.
Answer
  • True
  • False

Question 60

Question
____________ is (are) a brief statement that summarizes how and where the firm will compete in the industry.
Answer
  • Core values
  • Mission statement
  • Strategies
  • Goal statements

Question 61

Question
An owner should establish the mission statement and strategies ____________.
Answer
  • prior to its inception
  • at the first day of business
  • at the 30 day review
  • at the 90 day review

Question 62

Question
_____________ provides you with the opportunity to make money when other businesses cannot easily copy your advantages.
Answer
  • Orthodox practices
  • Unorthodox practices
  • Sustainable competitive advantage
  • Tangible assets

Question 63

Question
All of these are tangible assets except:
Answer
  • location
  • industry experience
  • computer systems
  • business license

Question 64

Question
What are the two measures used to evaluate whether a person or firm is meeting its goals?
Answer
  • Orthodox and Unorthodox
  • Quantitative and Qualitative
  • Actionable and Non-actionable
  • Tangible and Intangible

Question 65

Question
According to the book, the greatest source of sustainable advantage is:
Answer
  • personal relationships with customers.
  • location.
  • staffing.
  • relationship with vendors.

Question 66

Question
In a proposed new business, the financial analysis focuses exclusively upon its ability to generate positive cash flow.
Answer
  • True
  • False

Question 67

Question
When there is a difference between managers and owners, profits are a useful measure as a means to evaluate performance.
Answer
  • True
  • False

Question 68

Question
Cash is "king" in small business.
Answer
  • True
  • False

Question 69

Question
A pro forma is a term describing estimates of what the balance sheets and income statements will look like in the future.
Answer
  • True
  • False

Question 70

Question
Break-even analysis is the estimation of when a business's income exceeds its expenses.
Answer
  • True
  • False

Question 71

Question
Cash flow is the positive movement of money into the firm to pay the bills.
Answer
  • True
  • False

Question 72

Question
An investment in the firm by the owner is called ______________.
Answer
  • equity
  • profit
  • receivables
  • margin

Question 73

Question
According to the book, the most dangerous situation for a new business is _______.
Answer
  • uneven growth
  • no growth
  • rapid growth
  • slow growth

Question 74

Question
____________ is the analysis of the differences between the predicted and the actual performance of the business.
Answer
  • Deviation analysis
  • Gap analysis
  • Margin analysis
  • Profit analysis

Question 75

Question
The cash flow statement is used to describe _________ percent of the activities that provide and use cash during a specified period of time.
Answer
  • 25
  • 50
  • 75
  • 100
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