Question 1

Pepe is positive he knows a lot about marketing. But he is not as confident in his skills within the legal or financial aspects of starting a new business. He wants to consult with a lawyer and accountant, but his budget is tight with all of the expenses involved in getting Pepe's Pizzazzeria up and running. Pepe should
A) delay talking with a lawyer and accountant until the business has established a positive cash flow for at least one year.
B) trust his basic instincts and try to put it together without the advice of lawyers and accountants.
C) consult with a lawyer and accountant even though the budget is tight.
D) immediately hire full-time lawyers and accountants for his staff.

Accepted Answer

Entrepreneurs starting new businesses seldom can afford to have full-time lawyers and accountants as employees, but it is critical that they obtain professional legal and accounting advice.

Question 2

Since Pepe has worked in marketing for a large corporation before getting into the pizza business
A) there is no need to consider an entrepreneurial team for start-up due to the fact that all other management functions are served by marketing.
B) he can skip any marketing research steps that the SBA recommends.
C) he knows that the type of business he wants to start may be difficult to develop, but it has a tremendous amount of security due to its promise of long-term survival.
D) he plans to put together an entrepreneurial team of experts that will complement his expertise.

Accepted Answer

An entrepreneurial team is a group of experienced professionals from various business disciplines. Team members bring different skills to the entrepreneurial venture. Their skills usually complement each other.

Question 3

As a former classmate of Pepe's at the nearby university, you remind him what you both learned in your small business management class several years ago. What would you remind him?
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 the fact that there is not much direct competition.
D) Restaurants are easy to start up and have great profit potential.

Accepted Answer

The easiest businesses to start (like restaurants) have the greatest potential for failure. The easiest to keep alive are difficult to get started (like manufacturing).

Quiz 6: Entrepreneurship and Starting a Small Business

Since Pepe has worked in marketing for a large corporation before getting into the pizza business

As a former classmate of Pepe's at the nearby university, you remind him what you both learned in your small business management class several years ago. What would you remind him?