Chapter 5: Sound Business Idea

Question 1

It may be defined as the economic opportunity, which is within the reach of an entrepreneur, and which will provide him with a desirable value

Answer 1

Sound Business Idea

Question 2

When an aspiring entrepreneur is confronted with a business idea, it is his best interest to:

Answer 2

Determine its soundness

Question 3

Procedure in Determining Best Business Idea:

Answer 3

1. Preparation of List of Business Ideas
2. Screening
3. Final Selection

Question 4

When entrepreneur finds business ideas without serious effort, the method is referred to as:

Answer 4

Unanticipated means

Question 5

Included in unanticipated means are the following:

Answer 5

The person’s

• Work
• Hobbies
• Acquaintances
• Chance event encountered

Question 6

A disadvantage of unanticipated means in idea generation is the difficulty of ascertaining the exact date when ideas will come pouring in. To offset this problem, _____ is made

Answer 6

Deliberate search

Question 7

In screening, this feasibility indicates the following:

• Stable and sufficient demand
• Potential competitive strength of the firm

Answer 7

Market Feasibility

Question 8

In screening, this feasibility makes business ideas oftentimes appear easy to execute, but it is not really so when converting them into real products or services with required quality or quantity

Answer 8

Technical Feasibility

Question 9

In screening, this feasibility entails there are sufficient funds to fund operations. The proposed owners of the venture must have sufficient capital, or if insufficient, must be a good credit standing in the community.

Answer 9

Financing Feasibility

Question 10

In screening, this feasibility ensures that business ideas that cannot provide some indication of profitability must be screened out

Answer 10

Financial Feasibility

Question 11

It is a financial record summarizing a firm’s planned, or expected financial performance in terms of revenues, expenses, and profits over a given time period

Answer 11

Projected Income Statement

Question 12

The forecast of something which will happen in the future is referred to as

Answer 12

Projected Financial Statement

Question 13

It shows the planned or expected financial position of the enterprise on a particular date

Answer 13

Projected balance sheet

Question 14

It shows the planned or expected cash sale and/or purchases

Answer 14

Projected Cash Flow Statement

Question 15

In Final Screening, this list means all business ideas passed the adapted criteria

Answer 15

Status quo listing

Question 16

In Final Selection, this is a list of some generated ideas that were eliminated

Answer 16

Short List

Question 17

In Final Selection, this list shows all generated business ideas were eliminated

Answer 17

Zero List

Question 18

Innovation can thrive in a _____

Answer 18

Creative organization

Question 19

Refers to activities that are proactive methods in solving problems

Answer 19

Creativity

Question 20

involves bringing a hypothetical business idea to lifeand challenging its possibilities

Answer 20

Risk-taking

Question 21

When creativity is _____, there is an assurance that creativity will continuously be generated

Answer 21

Rewarded

Question 22

the flow of exchanging ideas between organizational members

Answer 22

Open communication

Question 23

When an error is detected, a move should be made to correct it

This shows that creativity is a catalyst for not only creating ideas, but also for solving problems

Answer 23

Allowance for Errors

Question 24

When an organization encourages a climate of ____ employees will not hesitate to contribute and provide

Answer 24

A Climate of Participation

Question 25

Creating solutions to problems would be pushed more easily if there are enough accessible tools or mentors that could support problem-solvers

Answer 25

Structural Mechanisms that Aid Creativity

Question 26

Although natural talent can exist for generating business ideas or solutions, training is still necessary to alleviate creative and logical skills

Answer 26

Training in the Creative Process

Question 27

A creative employee is allowed to engage in activities in hours they find and the company find most convenient

Answer 27

Flexibility