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Multiple choice and true/false from the midterm study guide.

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Ent 201 Midterm

Ent 201 Midterm

Question 1 of 75

1

Small business is the foundation for all business.

Select one of the following:

  • True
  • False

Explanation

Question 2 of 75

1

Fifty percent of businesses fail within the first four years.

Select one of the following:

  • True
  • False

Explanation

Question 3 of 75

1

A small business start up is designed to take advantage of the skills of the founder or founders.

Select one of the following:

  • True
  • False

Explanation

Question 4 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 5 of 75

1

Small-business growth is important in the United States and the world.

Select one of the following:

  • True
  • False

Explanation

Question 6 of 75

1

The Fortune 500 companies employ ___________________ employees than ten years ago.

Select one of the following:

  • more

  • same

  • fewer

  • younger

Explanation

Question 7 of 75

1

A customer of a small business could be considered an important stakeholder to the success of a company.

Select one of the following:

  • True
  • False

Explanation

Question 8 of 75

1

A small business' harvest plan is to put the profits back in the company.

Select one of the following:

  • True
  • False

Explanation

Question 9 of 75

1

Individuals or other organizations that impact the success of a business are called

Select one of the following:

  • corporate managers

  • Capitalists

  • Stakeholders

  • Owners

Explanation

Question 10 of 75

1

The largest group of new business owners is

Select one of the following:

  • Hispanics

  • retired men

  • women

  • Asians

Explanation

Question 11 of 75

1

Small business resources are more _________________________ than large firms.

Select one of the following:

  • plentiful

  • constrained

  • restrained

  • inverse ration

Explanation

Question 12 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 13 of 75

1

The most important person in a small business is the founder.

Select one of the following:

  • True
  • False

Explanation

Question 14 of 75

1

One advantage that a large firm has over a small firm is economies of scale.

Select one of the following:

  • True
  • False

Explanation

Question 15 of 75

1

The owner must be aware of his own tolerance of risk and establish a business that is consistent with that tolerance.

Select one of the following:

  • True
  • False

Explanation

Question 16 of 75

1

Starting a new business could result from a particular event or condition within an individual's environment.

Select one of the following:

  • True
  • False

Explanation

Question 17 of 75

1

Established businesses may be hesitant about buying from a start-up small business.

Select one of the following:

  • True
  • False

Explanation

Question 18 of 75

1

Family members are in a unique position to keep an individual focused on pursuing the wrong approach to an issue.

Select one of the following:

  • True
  • False

Explanation

Question 19 of 75

1

All of these are advantages for a small business except:

Select one of the following:

  • Respond quickly to changes

  • Owned and run by the same person

  • Economies of scale

  • Greater flexibility

Explanation

Question 20 of 75

1

____________________ states that individuals act to maximize their own individual benefit.

Select one of the following:

  • Individual benefit theory

  • Organizational benefit theory

  • Self fulfilling prophecy

  • Agency theory

Explanation

Question 21 of 75

1

The potential entrepreneur needs to consider ____________ when starting a new business.

Select one of the following:

  • risk tolerance

  • prior experience

  • personality orientation

  • all of the above

Explanation

Question 22 of 75

1

The term for when a new business has reached a level where revenue coming into the firm is sufficient to cover expenses:

Select one of the following:

  • Equal financial ratio

  • No risk level

  • Risk tolerance

  • Break-even point

Explanation

Question 23 of 75

1

When should an owner ensure there are sufficient financial resources to operate the business?

Select one of the following:

  • Prior to the start

  • Opening day

  • First payroll

  • Six month review

Explanation

Question 24 of 75

1

The small business owner must have the necessary skills and must understand the marketplace.

Select one of the following:

  • True
  • False

Explanation

Question 25 of 75

1

Large firms can respond more quickly to changes around them and fill niches better than small businesses.

Select one of the following:

  • True
  • False

Explanation

Question 26 of 75

1

Many new businesses are formed as a result of an entrepreneur's previous work experience.

Select one of the following:

  • True
  • False

Explanation

Question 27 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 28 of 75

1

A potential owner must be realistic about its competitors in products and the volume of sales.

Select one of the following:

  • True
  • False

Explanation

Question 29 of 75

1

One of the greatest risks to a new business is fast growth.

Select one of the following:

  • True
  • False

Explanation

Question 30 of 75

1

An example of an idea for a new startup from a hobby is _________________.

Select one of the following:

  • 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.

Explanation

Question 31 of 75

1

In forming a new business, the first thing a founder should do is:

Select one of the following:

  • Analyze the market

  • List their personal skill set

  • Obtain financial support

  • Hire a lawyer

Explanation

Question 32 of 75

1

A small business owner must possess all of the following except:

Select one of the following:

  • Necessary skills

  • In depth understanding of the market

  • Passion for starting a business

  • Follow a sequential formula

Explanation

Question 33 of 75

1

Potential owners should examine all of these specific areas except:

Select one of the following:

  • Work experience

  • Financial history

  • Education

  • Family history

Explanation

Question 34 of 75

1

The process of generating new business ideas is something that occurs automatically.

Select one of the following:

  • True
  • False

Explanation

Question 35 of 75

1

Potential generation of new business ideas occur:

Select one of the following:

  • When dismissing a promising idea.

  • When copying an existing business.

  • Automatically.

  • Because of the process of identifying skills and opportunities in the market.

Explanation

Question 36 of 75

1

Mark brings his friends together to generate ideas on his new business. This is called ________.

Select one of the following:

  • business meeting

  • gap analysis

  • brainstorming

  • focus group

Explanation

Question 37 of 75

1

_________ is the threat to the success of a new business related to its ability to establish and maintain a high margin product or service.

Select one of the following:

  • Profit margin

  • Sales generation scheme

  • Operational financing

  • Deficit gap

Explanation

Question 38 of 75

1

A small business owner must understand when an opportunity for a new business is truly an opportunity.

Select one of the following:

  • True
  • False

Explanation

Question 39 of 75

1

An owner, when researching a new business, needs to be aware of all potential customers.

Select one of the following:

  • True
  • False

Explanation

Question 40 of 75

1

New business owners do not need to identify customer needs because the competitors already have.

Select one of the following:

  • True
  • False

Explanation

Question 41 of 75

1

A major cause for failure of a new business is lack of focus on the competitive advantage.

Select one of the following:

  • True
  • False

Explanation

Question 42 of 75

1

A small business can compete on a cost basis with a larger firm.

Select one of the following:

  • True
  • False

Explanation

Question 43 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 44 of 75

1

The first section of an external analysis is to:

Select one of the following:

  • research potential substitutes.

  • develop a competitive edge.

  • identify potential customers.

  • determine in which industry the new business will compete.

Explanation

Question 45 of 75

1

Companies will ___________ their knowledge if your business is not a potential competitor.

Select one of the following:

  • share

  • not share

  • hide

  • distort

Explanation

Question 46 of 75

1

__________ is the edge a business has over competing businesses.

Select one of the following:

  • Competitive advantage

  • Benchmarking

  • Criteria related advantage

  • Competitive map

Explanation

Question 47 of 75

1

______________ is an area of business that uses standards that are necessary for the business.

Select one of the following:

  • Competitive map

  • Benchmarking

  • Unorthodox practices

  • Orthodox practices

Explanation

Question 48 of 75

1

___________ describes those areas of a business that are unique or unusual as compared to standard practices of the industry.

Select one of the following:

  • Competitive map

  • Benchmarking

  • Unorthodox practices

  • Orthodox practices

Explanation

Question 49 of 75

1

A competitive advantage in a business could be ____________________.

Select one of the following:

  • location

  • product selection

  • activity of the firm

  • all of the above

Explanation

Question 50 of 75

1

A(n) ___________ exists if the service or product performs a similar function.

Select one of the following:

  • trade-in

  • substitute

  • elasticity of demand

  • product/service flexibility

Explanation

Question 51 of 75

1

An entrepreneur cannot leave his or her business due to the amount of money that was invested. This is called a(n) ______________.

Select one of the following:

  • harvest plan

  • exit strategy

  • benchmarking

  • exit barrier

Explanation

Question 52 of 75

1

______________ demonstrates how easy it is for a customer to switch to substitutes.

Select one of the following:

  • Elasticity of demand

  • Competitive map

  • Trade-ins

  • Benchmarking

Explanation

Question 53 of 75

1

The mission of a business needs to be actionable, which means assist employees to make decisions.

Select one of the following:

  • True
  • False

Explanation

Question 54 of 75

1

The mission statement and strategies can be developed after identifying potential customers.

Select one of the following:

  • True
  • False

Explanation

Question 55 of 75

1

A business owner should never change its mission statement or strategy.

Select one of the following:

  • True
  • False

Explanation

Question 56 of 75

1

A sustainable competitive advantage is an advantage that other firms cannot immediately copy.

Select one of the following:

  • True
  • False

Explanation

Question 57 of 75

1

Michael Porter describes a low cost strategy as a company seeking to be the lowest cost firm in the industry.

Select one of the following:

  • True
  • False

Explanation

Question 58 of 75

1

An overall strategy assists the business by targeting its effort in specific areas.

Select one of the following:

  • True
  • False

Explanation

Question 59 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 60 of 75

1

____________ is (are) a brief statement that summarizes how and where the firm will compete in the industry.

Select one of the following:

  • Core values

  • Mission statement

  • Strategies

  • Goal statements

Explanation

Question 61 of 75

1

An owner should establish the mission statement and strategies ____________.

Select one of the following:

  • prior to its inception

  • at the first day of business

  • at the 30 day review

  • at the 90 day review

Explanation

Question 62 of 75

1

_____________ provides you with the opportunity to make money when other businesses cannot easily copy your advantages.

Select one of the following:

  • Orthodox practices

  • Unorthodox practices

  • Sustainable competitive advantage

  • Tangible assets

Explanation

Question 63 of 75

1

All of these are tangible assets except:

Select one of the following:

  • location

  • industry experience

  • computer systems

  • business license

Explanation

Question 64 of 75

1

What are the two measures used to evaluate whether a person or firm is meeting its goals?

Select one of the following:

  • Orthodox and Unorthodox

  • Quantitative and Qualitative

  • Actionable and Non-actionable

  • Tangible and Intangible

Explanation

Question 65 of 75

1

According to the book, the greatest source of sustainable advantage is:

Select one of the following:

  • personal relationships with customers.

  • location.

  • staffing.

  • relationship with vendors.

Explanation

Question 66 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 67 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 68 of 75

1

Cash is "king" in small business.

Select one of the following:

  • True
  • False

Explanation

Question 69 of 75

1

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

Select one of the following:

  • True
  • False

Explanation

Question 70 of 75

1

Break-even analysis is the estimation of when a business's income exceeds its expenses.

Select one of the following:

  • True
  • False

Explanation

Question 71 of 75

1

Cash flow is the positive movement of money into the firm to pay the bills.

Select one of the following:

  • True
  • False

Explanation

Question 72 of 75

1

An investment in the firm by the owner is called ______________.

Select one of the following:

  • equity

  • profit

  • receivables

  • margin

Explanation

Question 73 of 75

1

According to the book, the most dangerous situation for a new business is _______.

Select one of the following:

  • uneven growth

  • no growth

  • rapid growth

  • slow growth

Explanation

Question 74 of 75

1

____________ is the analysis of the differences between the predicted and the actual performance of the business.

Select one of the following:

  • Deviation analysis

  • Gap analysis

  • Margin analysis

  • Profit analysis

Explanation

Question 75 of 75

1

The cash flow statement is used to describe _________ percent of the activities that provide and use cash during a specified period of time.

Select one of the following:

  • 25

  • 50

  • 75

  • 100

Explanation

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