Chapter 01 - Small Business: Its Opportunities and Rewards
Chapter 01
Small Business: Its Opportunities and Rewards
True / False Questions
1.About half of the adults in the U.S. think about owning their own business, but only one person in 50 who thinks about it actually starts a business.
TrueFalse
2.When thinking about owning their own business, one hurdle people need to overcome is taking the right action.
TrueFalse
3.The U.S. government agency that helps people start businesses is the U.S. Department of Commerce.
TrueFalse
4.Imitative firms are defined as prepackaged businesses that are bought, rented, or leased from another company.
TrueFalse
5.Truly entrepreneurial businesses are characterized by imitativeness in their products, services or business models.
TrueFalse
6.Small businesses focus on effectiveness whereas high-growth ventures focus on efficiency.
TrueFalse
7.People starting high-growth ventures need to know how to seek and obtain venture capital.
TrueFalse
8.Nearly all entrepreneurs talk about three universally mentioned rewards: flexibility, fame, and fortune.
TrueFalse
9.Growth rewards are what people get from facing and beating challenges.
TrueFalse
10.Flexibility rewards refer to the money made from owning your own business.
TrueFalse
11.More than 75 percent of the millionaires in the United States are entrepreneurs.
TrueFalse
12.Some of the problems faced by people who are thinking about starting small businesses are: (1) there is not enough financing to start businesses, and (2) they must make something to make money.
TrueFalse
13.In order to start a business, you need four elements to come together: boundary, reason, idea, and exchange.
TrueFalse
14.The most frequently occurring element of the BRIE model is the intention.
TrueFalse
15.In the BRIE model, exchange refers to moving resources, products, or services to others in exchange for money or other resources.
TrueFalse
16.The BRIE model can help individuals with one of the biggest hurdles of starting a business, which are resources.
TrueFalse
17.Small business is the engine of job generation, but it is important for existing jobs, too.
TrueFalse
18.The high-growth ventures and big businesses would not succeed without small businesses offering supporting services.
TrueFalse
19.The four forms of entrepreneurship are public, independent, corporate, and social.
TrueFalse
20.Public entrepreneurship is the form of entrepreneurship that involves revitalizing private agencies.
TrueFalse
Multiple Choice Questions
21.According to the text, small business involves _____ people and has its owner managing the business on a day-to-day basis.
A.100-200
B.1-50
C.between 200 to 500
D.at least 500
22.Identify the two hurdles that people need to overcome to move from thinking about owning their own business to achieving it.
A.Moving from inaction to action and taking the right action.
B.Financing the business and government regulation.
C.Experience from large corporations for needed skill sets and organization abilities.
D.Family support and finding the right people for the organization.
23.According to the Small Business Administration, about _____ of new firms with employees survive four years, and for owner-only firms this rate is _____ percent surviving four years.
A.one-fourth; 30
B.one-half; 75
C.two-thirds; 50
D.two-fifths; 60
24.A facility which offers subsidized space and business advice to companies in their earliest stages of operation is called a(n)
A.small business administration center.
B.franchise.
C.small business development center.
D.incubator.
25.What percent of firms getting help in incubators were still going at four years?
A.50
B.81
C.66
D.87
26._____ are the offices co-sponsored by states and the federal government, that offer free or low-cost help to existing and potential small businesses.
A.Small Business Development Centers
B.Small Business Administration Offices
C.Research and Outreach Services
D.Occupational structures
27.The U.S. government agency that helps people start business is the
A.Small Business Administration.
B.U.S. Department of Business Development.
C.Department of Business Development.
D.U.S. Entrepreneurial Administration.
28.The Small Business Administration categorizes a business in the U.S. as small, if it has fewer than _____ employees.
A.50
B.500
C.300
D.1,000
29.Among SMEs, medium enterprises have _____ people.
A.51-500
B.251-500
C.1-50
D.1-20
30.A business owned by an individual or small group is referred to as a(n)
A.franchise.
B.incubator.
C.team-dependent business.
D.independent small business.
31._____ refers to constant or at least daily management of a business by its owner.
A.Franchise.
B.Licensing
C.Franchising
D.Owner-management
32.A(n) _____ is one who profits from a business but is not involved in its day-to-day operations.
A.incubator
B.absentee owner
C.owner-manager
D.franchisor
33.Truly entrepreneurial businesses are characterized by _____, in their products, services, or business models.
A.novelty
B.imitation
C.experience
D.government subsidy
34.Small businesses are
A.imitative in nature.
B.characterized by novelty.
C.described as being unique and distinctive.
D.prepackaged businesses you buy or lease from a franchisor.
35.A prepackaged business bought, rented, or leased from a company is called a(n)
A.incubator.
B.imitative firm.
C.franchise.
D.novelty.
36.A person who becomes an owner through inheriting or being given a stake in a family business is called a(n)
A.founder.
B.manager.
C.heir.
D.buyer.
37.People starting high-growth ventures
A.require key market knowledge that focuses on their immediate marketplace and communities.
B.focus on how to start small, with resources from the owner, family, and friends.
C.need to know how to seek and obtain external financing.
D.require a key type of knowledge of how to grow on the schedule set by and for the purposes of the owner.
38.The key market knowledge for a small business
A.is to know how to seek and obtain external financing.
B.focuses on its immediate marketplace and communities.
C.is to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company.
D.focuses on the need to know how to dominate the market and grow dramatically and quickly.
39.Which of the following is a characteristic of a small business?
A.Preferred funding source is other people's money
B.Focus is on efficiency
C.Approach to human resource is to professionalize
D.Delegation is essential
40.Which of the following is an attribute of a high-growth venture?
A.When the firm is in trouble, it cuts costs
B.Metastrategy is novelty
C.High-growth ventures grow when necessary
D.Delegation is difficult
41.Identify the characteristic of a small business.
A.When the firm is in trouble, it focuses on selling more products/services
B.Approach to human resources is to professionalize
C.Focus is on effectiveness
D.Metastrategy is imitation
42.Identify the characteristic of a high-tech venture.
A.Owner's own money is the preferred funding source
B.Focus is on efficiency
C.Delegation is essential
D.Sales are more important than marketing
43.Which of the following refers to the eventual size of the market, which can range from a small, local, or niche market to something used by millions or even billions?
A.Innovativeness
B.Mindshare
C.Potential for growth
D.Occupational structure
44.Rating firms high or low on innovativeness and potential for growth helps identify the different types of businesses in what is called
A.Dynamic Capitalism Typology.
B.General Equilibrium Economics.
C.Creative destruction.
D.PICS Model of Entrepreneurship.
45.Identify the most numerous and widely available type of firm, ranging from low to moderate levels of innovation and growth.
A.Resource constrained sector
B.Ambitious firm sector
C.Glamorous sector
D.Economic core sector
46.Why are small businesses considered the economic core of society?
A.They are high growth and high innovation firms.
B.They are made up of franchises and multisite firms, who are generally not very innovative, but are designed for high levels of growth.
C.They have lots of innovative ideas but lack the funds to bring them to market.
D.They are the most numerous and most widely available type of firms.
47.According to the Dynamic Capitalism Typology, the glamorous sector
A.consists of firms with high growth and high innovation.
B.consists of the most numerous and most widely available type of firms.
C.consists of franchises and multisite firms, with low to moderate innovation and high levels of growth.
D.consists of firms high in innovation but low in growth rate due to a lack of resources.
48.Which of the following is an example of the glamorous sector?
A.Inventors
B.Fortune 500s
C.Small businesses
D.Franchises and multisite firms
49.All of the following relate to firms in the ambitious firm sector EXCEPT
A.they are mostly franchises and multisite firms.
B.they are characterized by low to moderate innovation.
C.they are made up of inventors and research and development firms.
D.they are designed for high levels of growth.
50.The resource constrained sector
A.are firms that have low to moderate levels of innovation and growth.
B.are high growth and high innovation firms.
C.are firms that have lots of innovative ideas but lack the funds to bring them to market.
D.are generally not very innovative, but are designed for high levels of growth.
51.All of the following are the popular reward types for small business owners EXCEPT
A.flexibility.
B.power.
C.income.
D.growth.
52.Which of the following is a reward that is rarely mentioned by entrepreneurs?
A.Building great wealth
B.Flexibility
C.Continuing a family tradition in business
D.Personal growth
53._____ rewards are what people get from facing and beating or learning from challenges.
A.Recognition
B.Flexibility
C.Income
D.Growth
54.These rewards refer to the money made from owning your own business.
A.Growth rewards
B.Flexibility rewards
C.Income rewards
D.Performance rewards
55.For entrepreneurs, perhaps the most rapidly growing type of reward is _____ rewards.
A.recognition
B.flexibility
C.income
D.growth
56.The ability of business owners to structure life in the way that suits their needs best refers to
A.flexibility rewards.
B.family rewards.
C.growth rewards.
D.wealth rewards.
57.Which of the following is NOT a myth about small businesses?
A.There is not enough financing to start businesses.
B.You need to make something if you are going to make money.
C.You can never try again if you fail once.
D.There is no flexibility when you own your own business.
58.Funding invested for a share of a firm or given as loans or credit from family, friends, and other businesses used to help start or grow a firm is known as
A.committed capital.
B.informal capital.
C.mezzanine capital.
D.formal social capital.
59.According to Sageworks, in 2008, amid a recession, which of the following represented the most profitable industries for small businesses?
A.Manufacturing industries
B.Financial services
C.Service industries
D.Software industries
60.According to the BRIE model, in order to start a business, you need all of these elements to come together EXCEPT
A.boundary.
B.resources.
C.intention.
D.experience.
61.Which factor distinguishes a firm from the process of buying or selling or bartering we all do occasionally?
A.Resources
B.Boundary
C.Intention
D.Exchange
62.A business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or on the Internet are examples of a(n)
A.exchange.
B.resource.
C.boundary.
D.intention.
63.Resources
A.include a business name or government registration.
B.refer to moving goods or service to others in exchange for money.
C.are the most frequently occurring element of the BRIE model.
D.include the product or service to be offered.
64.Which is the most frequently occurring element of the BRIE model?
A.Intention
B.Boundary
C.Exchange
D.Resources
65.The desire to start a business represents which element of the BRIE model?
A.Intention
B.Boundary
C.Exchange
D.Resources
66.The BRIE model can help an individual deal with one of the biggest hurdles in starting a business, which is
A.getting resources.
B.being inactive.
C.setting boundaries.
D.making an exchange.
67.According to the latest statistics, small businesses have created _____ percent of the new jobs.
A.75
B.25
C.50
D.95
68.The sequence or organization of jobs and careers in the economy refers to
A.franchising.
B.creative destruction.
C.occupational structure.
D.incubators.
69.The way newly created goods, services, or firms can hurt existing goods, services, or firms refers to
A.franchising.
B.creative destruction.
C.occupational structure.
D.incubators.
70.Mandarin is a restaurant which has opened recently. People from all over town flock to Mandarin to find out how good it is. This gives a big boost to the restaurant's initial business. But it causes the other restaurants in the area to lose business temporarily. The way in which Mandarin hurts existing restaurants is an example of
A.creative destruction.
B.efficiency.
C.innovative disruption.
D.market penetration.
71.According to the U.S. Small Business Administration, small businesses generate _____ the number of patents per employee than big businesses.
A.13 to 14 times
B.about twice
C.40 to 50 times
D.about half
72.A nation where the major forces for jobs, revenues and taxes come from farming or extractive industries like forestry, mining, or oil production is a(n)
A.factor-driven economy.
B.efficiency-driven economy.
C.innovation-driven economy.
D.competency-driven economy.
73.A nation where industrialization is becoming the major force providing jobs, revenues and taxes, and where minimizing costs while maximizing productivity is a major goal is a(n)
A.factor-driven economy.
B.efficiency-driven economy.
C.innovation-driven economy.
D.dynamic-driven economy.
74.Innovation-driven economies
A.are those where entrepreneurship becomes a key way to build the middle class.
B.are nations where industrialization is becoming the major force providing jobs, revenues and taxes.
C.are focused on high-value-added manufacturing but are marked by a very large service sector.
D.are those where entrepreneurship is essential to helping build personal wealth and break the cycle of low-wage jobs.
75.Entrepreneurship levels in countries such as Germany, Israel, the Republic of Korea, and the United States average the lowest of the
A.innovation-driven economies.
B.efficiency-driven economies.
C.factor-driven economies.
D.competency-driven economies.
76.Which of the following statements about virtual instant global entrepreneurship (VIGE) is false?
A.VIGE depends on using Web sites like eBay for products to quickly establish a global presence.
B.Many VIGE sites offer procedures, services, and Web page templates which incorporate best practices for global trading.
C.The VIGE approach produces large numbers of smaller-scale exporters.
D.VIGE sites replace institutional procedures with personal contacts to help even the smallest small businesses go global.
77.Which aspect of entrepreneurship refers to being in-tune with one's market?
A.Efficiency
B.Creation
C.Customer-focus
D.Growth
78.The form of entrepreneurship in which a person or group own their own for-profit business is
A.independent entrepreneurship.
B.social entrepreneurship.
C.public entrepreneurship.
D.corporate entrepreneurship.