Question 1

Protected environments for new, small business are known as

Accepted Answer

The term "business incubator" refers to a program or facility designed to provide support, resources, and guidance to new and small businesses. These incubators are intended to help with the development and growth of the businesses within, providing a protected environment that can help them gain traction and thrive. Business accelerators, on the other hand, are programs or entities designed to help already-established businesses grow and expand more rapidly. Business shelters and bootleggers are not commonly used terms in this context, while skunkworks typically refer to secretive innovation or research projects within larger organizations.

Question 2

Bad economic times can

Accepted Answer

During bad economic times, some businesses may find opportunities to expand as competitors may be struggling, assets may be cheaper, and there may be less competition for market share.

Question 3

Benefits of business incubators typically include

Accepted Answer

Business incubators typically offer shared services such as office space, equipment, administrative support, and networking opportunities at a reduced cost. While some incubators may offer access to venture capital, free rent, or high security, these benefits are not guaranteed and may vary depending on the specific incubator. Guaranteed profitability is also not a typical benefit of business incubators.

Question 4

Success of entrepreneurial ventures is often jeopardized by the death of the founder. Which of the following is an important strategy to minimize this problem?

Accepted Answer

Succession planning is the best choice to minimize the problem of the death of the founder. It involves identifying and developing potential successors who can continue the business after the founder's death. This ensures the continuity of the venture and prevents any disruptions in its operations. Conservative use of funds and systematic recordkeeping are important strategies for the long-term viability of the business, but they do not directly address the founder's death. Decreased delegation may hinder the growth and expansion of the business. Going public may provide access to additional capital and resources, but it does not address the problem of the founder's death.

Question 5

IPO is an acronym that stands for

Accepted Answer

IPO stands for initial public stock offering, which occurs when a private company decides to become publicly traded by offering shares of its stock to the public for the first time.

Question 6

Xavi decides to open a Mexican restaurant serving street tacos and fajitas. This will be one of several such restaurants in his small town. This entrepreneurial venture, like most small businesses, is characterized by ________ risk and ________ innovation.

Accepted Answer

Small businesses often face high risk due to competition, market uncertainty, and resource constraints. However, opening a restaurant with a common concept like street tacos and fajitas in a town with several similar restaurants suggests low innovation.

Question 7

Initial public stock offerings provide a way to raise capital through

Accepted Answer

Initial public stock offerings (IPOs) refer to federally registered and underwritten sales of shares in a company to the public for the first time. This process provides a way for companies to raise capital by offering ownership in the company to investors in exchange for funding. Option A refers to a partnership, which is not the same as an IPO. Option B describes a private placement, which is not open to the public. Option C describes a merger, which may or may not involve an IPO. Option E describes an acquisition, which is also unrelated to an IPO.

Question 8

Entrepreneurs, in part because they are very busy, often fail to use

Accepted Answer

Entrepreneurs often have limited time and resources to devote to organizational tasks such as establishing formal control systems. These systems are designed to provide structure and order within an organization, and help to ensure that goals are achieved effectively and efficiently. Without them, entrepreneurs may find it difficult to monitor and manage their businesses effectively, which can lead to issues such as missed deadlines, cost overruns, and quality problems. It is therefore important for entrepreneurs to make time to establish formal control systems in order to maximize their chances of success.

Question 9

Selena, a low-level employee at a software development firm, has always been obsessed with making computers more user-friendly, and she has invented several programs designed to help her friends resolve their computer crash issues. The friends have raved about the results and say her abilities as a computer program innovator are outstanding. She knows that she needs to develop herself in the other areas that create success for entrepreneurs before she takes her hobby to the next level. Of the following steps, which one can Selena choose to skip and still have a reasonable expectation of success as an entrepreneur?

Accepted Answer

Selena already has strong programming skills, as evidenced by her successful programs. She can focus on developing business and management skills instead.

Question 10

According to Peter Drucker, who should help plan succession for a family-managed business?

Accepted Answer

Peter Drucker suggests that succession planning for a family-managed business should be done by someone outside the family and the business, such as a consultant or a professional advisor, who can offer an objective and unbiased perspective. This can help ensure a smooth transition and prevent conflicts among family members.

Question 11

Which of the following is one of the major liabilities of start-ups?

Accepted Answer

Start-ups often face the liability of smallness, which refers to the challenges and disadvantages they encounter due to their small size, such as limited resources, less market power, and higher vulnerability to market fluctuations.

Question 12

Juan comes up with a highly unusual but appealing idea for a new phone application. He would require a substantial amount of money to pay for developing the required graphics and technology. His idea can be categorized as involving

Accepted Answer

Juan's idea is highly unusual, indicating a high level of innovation. Additionally, the fact that he requires a substantial amount of money for development implies a higher risk involved in the investment. Thus, the idea can be categorized as involving high innovation/high risk.

Question 13

Two major liabilities of start-ups are

Accepted Answer

Start-ups are both new and small, which makes them vulnerable to many risks such as lack of market traction, poor financial management, limited access to resources, etc. Additionally, the complexity of running a new business can also create liabilities, such as issues with scaling, government regulations, and legal compliance. However, the primary liabilities for most start-ups are their newness and smallness.

Question 14

Marina is developing a new software company. She locates her business in an industrial park that offers low rent and shared support staff to start up companies. This is an example of a

Accepted Answer

The scenario describes a business incubator, which is a facility that provides resources and support for start-up companies, such as low rent and shared support staff. This helps entrepreneurs like Marina to launch their businesses with a lower risk of failure.

Question 15

One of the most common reasons that entrepreneurial ventures fail is

Accepted Answer

The answer of One of the most common reasons that...

Question 16

Most small-business ventures are in the ________ category of the entrepreneurial strategy matrix.

Accepted Answer

Most small-business ventures typically fall into the low innovation/high risk category because they often involve traditional business models with limited innovation and face significant market and operational risks.

Question 17

In order for family-managed businesses to survive and prosper, management guru Peter Drucker advises them to

Accepted Answer

According to Peter Drucker, it is important for family-managed businesses to fill at least one key position with a nonfamily member to bring in fresh ideas, skills, and perspectives. This can help the business avoid complacency, stagnation, and conflict within the family. This nonfamily member can also act as a mediator in case of any disputes or issues that may arise.

Question 18

Anders wishes to open a new landscaping company that will have no services that are particularly distinctive compared to competitors in this well-established field; because of the need for trucks and equipment, the business will require a sizable investment. In which part of the entrepreneurial strategy matrix is new company likely to be located?

Accepted Answer

The new company is likely to be located in the lower-right quadrant of the entrepreneurial strategy matrix because it has a low level of distinctiveness and a high level of investment.

Question 19

The ________ quadrant in the entrepreneurial strategy matrix depicts ventures of truly novel ideas with little risk.

Accepted Answer

The upper-left quadrant in the entrepreneurial strategy matrix represents ventures with truly novel ideas and little risk, often referred to as "high innovation, low risk" ventures.

Question 20

A product that represents a novel idea requiring little financial investment would be displayed in the ________ of the entrepreneurial strategy matrix.

Accepted Answer

The upper-left quadrant of the entrepreneurial strategy matrix represents products that are innovative (novel ideas) but require little financial investment.

Quiz 7: Entrepreneurship