Homework answers / question archive /   Chapter 6 Homework LO1 - Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses

  Chapter 6 Homework LO1 - Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses

Business

Share With

---

 

Chapter 6 Homework

LO1 - Explain why people take the risks of entrepreneurship; list the attributes of successful entrepreneurs; and describe entrepreneurial teams, intrapreneurs, and home- and web-based businesses.

 

1). All of the following are reasons why people are willing to take entrepreneurial risk EXCEPT

 

profit.

 

guaranteed success.

 

opportunity.

 

independence.

 

 2. In an effort to encourage its employees to develop new ideas for the firm, W.L. Gore has a 'Dabble Time Policy' that allows employees to devote 10% of their time at work to create their own projects. The company will even provide employees with funds to use for these projects. It appears that the company is working to develop _______ within its organization.

 

 intrapreneurs

 

micropreneurs

 

web-based entrepreneurs

 

 affiliate marketers

 

 3. Anita opened a home-based business specializing in billing and coding for physicians. She intends to keep the business small and operate it as a one-person firm. Anita is a(n)

 

intrapreneur.

 

 micropreneur.

 

macropreneur.

 

extrapreneur.

 

4. In order to attract businesses to the area, the city of Grand Valley offers a $500 job tax credit per employee, a 3% investment tax credit for purchased equipment and a health insurance tax credit of $200 per employee. This is an example of a(n)

 

 enterprise zone.

 

business incubator.

 

intrapreneurial effort.

 

affiliate marketing venture.

 

 5. The Wolfman Enterprise Center offers inexpensive office space for new service-oriented businesses along with other services to help new businesses succeed. These services include access to financing, shared conference rooms and training facilities, a receptionist and clerical support. This is an example of a(n)

 

venture capital center.

 

affiliate marketing center.

 

enterprise zone.

 

 incubator.

 

 

LO2 - Discuss the importance of small business to the American economy and summarize the major causes of small-business failure.

 

 6. Which of the following is NOT part of the definition of a small business as outlined by the Small Business Administration?

 

It is operated as a subsidiary of a larger corporation.

 

It does not exceed specified size standards for annual sales.

 

It is not dominant in its field of operations.

 

It meets certain standards of size in terms of employees.

 

7. Approximately what percentage of American workers got their first job with a small business?

 

12 percent

 

80 percent

 

65 percent

 

20 percent

 

8. Which of the following statements regarding small business ownership is TRUE?

 

Small businesses cannot adjust to shifts in the marketplace as easily as big corporations.

 

The vast majority of companies start out as multinational conglomerates rather than small businesses.

 

Most people do not start out their careers working for a small business.

 

 About 50% of all small businesses are owned by women.

 

 9. Which of the following is a major key to the success of any small business?

 

 Personal attention to customers

 

 Choosing the right industry

 

Trying to do too much with too little

 

Not worrying about competitors

 

10. According to the Small Business Administration (SBA), half of the new businesses started in the U.S. fail in the first five years. All of the following are potential reasons for small business failure EXCEPT

 

lack of industry or market experience.

 

 the ability to respond quickly to changing market conditions.

 

inadequate financial planning.

 

underpricing or overpricing goods or services.

 

LO3 - Summarize ways to learn about how small businesses operate.

 

11. Why is it beneficial for new entrepreneurs to consider taking a course in small business management at a community college?

 

Attending classes in business management is required for all business owners.

 

 They can learn from instructors and experienced entrepreneurs from a wide array of backgrounds.

 

 They can consult with professors about their business ideas, ensuring success.

 

By taking classes in business, they can mitigate all of the risk associated with starting a business.

 

12. When it comes to prior experience, what is the rule of thumb regarding how many years of experience you should have in a comparable firm before starting a firm of your own?

 

 3 years

 

1 year

 

5 years

 

7 years

 

 13. The presentation outlines ways would-be entrepreneurs can learn how to run their own business. Which of the following is NOT one of those ways?

 

Investigate competitors.

 

Learn from others.

 

Get some experience.

 

Take over a successful firm.

 

 

LO4 - Analyze what it takes to start and run a small business.

 

 14. The document that details the business idea, the target market, the business's competitive advantage, the available financial resources and the qualifications of its managers is known as the

 

 business plan.

 

feasibility study.

 

marketing plan.

 

mission statement.

 

15. Companies that are willing to exchange a significant stake in the company in return for funds to grow or expand the business may seek funding through

 

small business investment companies (SBICs).

 

venture capitalists.

 

community development financial institutions (CDFIs).

 

microloans.

 

 16. What part of a business plan are bankers most likely to read and focus on first?

 

 the financial plan

 

 the marketing plan

 

the company background

 

 the executive summary

 

 17. What U.S. government agency advises and assists small businesses by providing management training and financial advice as well as loans?

 

the U.S. Department of Labor

 

the Small Business Investment Company

 

 the Small Business Administration

 

the Interstate Commerce Commission

 

18. Teams of retired executives who help new entrepreneurs with everything from writing business plans to answering questions about everyday operations are known as

 

SCORE.

 

SBIC.

 

angel investors.

 

venture capitalists.

 

 

LO5 - Outline the advantages and disadvantages small businesses have in entering global markets.

 

 19. Which of the following is NOT a reason why businesses enter global markets?

 

It can extend the life of a product.

 

It is cheaper to do so.

 

They want to tap into new markets.

 

They want to offset the loss of revenue in the home market.

 

20. Demand for Riana's product in the U.S. is inconsistent. When orders are slow, she sometimes needs to shut down production to help control inventory levels. One way Riana could improve her firm's situation is to

 

apply for a loan to replenish her raw materials inventory.

 

 minimize advertising expenses.

 

export to international markets.

 

donate the excess inventory to charity and take a tax credit.

 

21. Which of the following is NOT a major hurdle to getting started in global business?

 

 Lack of technological advances

 

Difficulty in obtaining financing

 

 Abundance of bureaucratic paperwork

 

Inability to understand the cultural differences between markets

 

 22. Ryan wants to begin marketing his products internationally. One of the challenges he is likely to experience is

 

strong resistance to U.S.-made products.

 

an inability to find customers.

 

 cultural differences.

 

foreign businesses' preference for dealing with major corporations.