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Exam 6: Entrepreneurship and Starting a Small Business

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Question 61

Multiple Choice

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When starting a small business,it's important to remember:

A) an affinity for taking large amounts of risk is the critical factor in achieving small business success.
B) doing things differently from previous entrepreneurs is the real key to success.
C) learning from others and gaining relevant business experience improves the odds for success.
D) to avoid burnout,limit the number of hours you work each week as you adapt to the rigors of self-employment.

E) C) and D)
F) All of the above

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Question 62

Multiple Choice

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After Kate graduated from college,her grandfather created a bookkeeping position for her in his furniture retail business.Her older brother is in charge of purchasing inventory for the stores,yet often the store runs out of popular furniture or become overstocked with pieces that must be marked down to be sold.Kate is confident that her brother is more suited for handling accounting and finance,and she has a pulse on what sells and how much sells.Although she has spoken with her grandfather about it a couple of times,he seems reluctant to change.As the founder of the business,he may:

A) find it difficult to remove family members from positions,even if it is not good for the business.
B) find it difficult to retrain Kate for the job,and even though his business is losing opportunities,he will stay the course.
C) he knows that profit margins have declined,and he doesn't care.
D) have a bigger picture of things,and not feel the need to respond to a family member's request.

E) C) and D)
F) A) and D)

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Question 63

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Enterprise zones offer lower tax rates and government assistance to attract private business investment.

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:

Two key management functions that need particular attention when starting a business are:

Web-based businesses avoid the risk of failure faced by traditional startup businesses.

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Not everyone dreams of owning their own business.Identify and describe at least three attributes of successful entrepreneurs.

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

You can negotiate a win-win situation by offering to manage an established small business.You win from the experience;the owner wins with free time.

To be considered part of a market,an individual must:

Juanita wants to start a small business.If her primary goal is fast growth and high profits,her best chances would be in the manufacturing sector.

Management includes attention toward financing the business,hiring employees,marketing,and record keeping.

The only real barrier preventing small businesses from exporting is insufficient knowledge of the opportunities available.

Potential suppliers can be an excellent source of financing for a new business since lending money to a new customer may be very much in their own interest.

For the past twenty-five years,state and city governments have promoted facilities where new businesses can open-up shop and share common services such as secretarial,accounting,and legal services.Due to their remarkable success rate,_______________ continue to grow in popularity.

Jason,Robin,and Ian currently work in the marketing department of a large corporation.They have similar backgrounds and training and are thinking about leaving their company to start their own business.Successful entrepreneurial teams are comprised of these types of people because similarities in knowledge and skill ensure harmony and consistency in their new business.

Management includes attention toward financing the business,hiring employees,marketing,and record keeping.

A new business that sets up a(n) _____________ from the start is saving itself time and grief later.

Identifying "poor management" as the cause of a small business failure likely covers a variety of problems.