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Exam 6: Entrepreneurship and Starting a Small Business

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Question 61

Multiple Choice

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Mini-Case Peppy Roaney believes that pizza is a much more versatile dish than most people realize.As the national marketing manager for Pizza Guys,he observed how consumers were delighted with barbecue pizza,Hawaiian pizza,Mexican pizza and other unique combinations.His suggestions for other unusual pizzas,however,were met with a negative response by his superiors.Even some of his colleagues laughed at his ideas.Peppy's confidence in his ability to understand the market has led him to focus on planning a business of his own.Peppy realizes that he will take a risk when he leaves his job with Pizza Guys and embarks upon a new venture: Peppy's Pizzazzeria.Peppy is excited about the potential of profitably catering to the unmet desires of pizza consumers. -As a former classmate of Peppy's at the nearby university,you remind him what you both learned in your small business management class several years ago:

A) restaurants are easy to start-up,but difficult to keep going.
B) restaurants are probably the most difficult type of business to start-up,due to the labor intensive aspects of the business.
C) experts believe that restaurants have a high profit potential,due to the fact that there is not much direct competition.
D) restaurants are easy to start-up and have great profit potential.

E) A) and B)
F) None of the above

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Question 62

Multiple Choice

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Which of the following best describes the outlook for small businesses in international markets?

A) The world is a larger,and potentially a more lucrative market than the U.S.domestic market
B) The threat of terrorist activities prevents small businesses from competing internationally
C) Most foreign buyers prefer to deal with large,well-known corporations rather than small businesses
D) Higher business costs eliminate the profit opportunities in global markets

E) B) and D)
F) B) and C)

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Question 63

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Justin's favorite part of Introduction to Business class was marketing.As he brainstorms about starting a car detailing business,he recalls that it is important to:

The U.S.government offers "investor visas" to attract more entrepreneurs.

When Krystal Ginger graduates from culinary school she dreams of opening her own Asian fusion restaurant.Her other passion is skiing in Colorado,where she schedules four or five trips each year.As her small business advisor,you believe it necessary to provide her with information that will help her make good business decisions.Which of the following would be helpful for Krystal to know?

Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their businesses.

Carlos hopes to start his own business.He needs to avoid talking to other small business owners about his plans because they might steal his ideas. Talking to small business owners is one of the best ways to learn how to start and run a small business.

Hiring family members offers the best answer to the problem of attracting qualified employees.

As a young boy,Drew remembers his grandfather telling him,"Son,if you can find something you like to do,and somebody is willing to pay you to do it,well,that's the secret to a great life." The way Drew saw it,this was his big break.For the past five years,he split his time between school and working for a local tree farm/nursery business.The owner recently announced he was ready to retire.As Drew began creating a business plan,he contemplated what the business might be worth? How much will he need to buy this business? For starters,Drew

Small businesses create about __________ percent of the new jobs in the United States.

An entrepreneur's personal financial position will have a minor impact on negotiations with bankers for a small business loan.

Venture capitalists provide funds for startup businesses in exchange for part ownership in the new firm.

The executive summary section of the business plan contains:

To be successful,entrepreneurs are dependent on the support of others for encouragement. Entrepreneurs must be self-nurturing.They must believe in their ideas when others do not.

Venture capitalists provide funds for small businesses as part of their philanthropy programs.

Most entrepreneurs get the ideas for their products and services from a flash of inspiration.

Greg benefited from his experience working for an established private company that provided innovative lighting for large music venues.Although confident that he could start his own lighting business,he had limited capital to buy the necessary equipment needed to successfully compete with established companies.Which of the following strategies would best help Greg achieve his goal of business ownership?

If you plan to meet face-to-face with a banker or venture capitalist,it is not necessary to submit a business plan. A business plan is mandatory when talking to bankers and investors.

Mini-Case Peppy Roaney believes that pizza is a much more versatile dish than most people realize.As the national marketing manager for Pizza Guys,he observed how consumers were delighted with barbecue pizza,Hawaiian pizza,Mexican pizza and other unique combinations.His suggestions for other unusual pizzas,however,were met with a negative response by his superiors.Even some of his colleagues laughed at his ideas.Peppy's confidence in his ability to understand the market has led him to focus on planning a business of his own.Peppy realizes that he will take a risk when he leaves his job with Pizza Guys and embarks upon a new venture: Peppy's Pizzazzeria.Peppy is excited about the potential of profitably catering to the unmet desires of pizza consumers. -Peppy has inquired about the possibility of obtaining a microloan from the SBA.This type of loan is awarded primarily on the basis of the:

Anthony is an employee of a textbook publisher.However,his desire is to establish a home-based business providing his services to a variety of publishers.Anthony's primary motivation is to escape the 9 to 5 world of corporate publishing and to enjoy the opportunity of working for himself.Anthony is an example of a micropreneur. Business writer Michael LeBoeuf coined the term "micropreneur" to refer to business owners who are interested in simply enjoying a better lifestyle and want the opportunity to make a living doing the kind of work they enjoy.