Chapter 6

Question 1

Define entrepreneurship

Answer 1

Accepting the risk of starting and running a business

Question 2

What are four reasons people are willing to take entrepreneurial risk?

Answer 2

1. Opportunity
2. Profit
3. Independence
4. Challenge

Question 3

What are five entrepreneurial attributes?

Answer 3

1. Self directed and disciplined
2. Self nurturing (stay enthusiastic, believe in yourself)
3. Action-oriented
4. Highly energetic
5. Tolerant of uncertainty

Question 4

What generates most inspiration

Answer 4

Asking questions and seeking solutions

Question 5

What are three questions to ask when looking for ideas

Answer 5

1. What do I want, but can never find
2. What P/S would improve my life
3. What irritates me and what P/S would help.

Question 6

What five things need to exist for it to be a good idea

Answer 6

1. It fills the customers needs
2. You have the skills and resources to start a business
3. You can sell the products or service a price people will pay and still profit
4. You can get your P/S to customers in the window of opportunity
5. You can keep the business going

Question 7

Define an entrepreneurial team

Answer 7

a group of experienced people from different areas of business who joined to form a managerial team for a new product.

Question 8

Define an intrapreneurs

Answer 8

Creative people who work as entrepreneurs in a corporation.

Question 9

What is a micropreneur

Answer 9

entrepreneurs that are willing to the risk of operating a business that stays small and offers a balanced life style.

Question 10

Online business have to offer more than what can be found in a store, they have to offer

Answer 10

unique products and services

Question 11

What is an enterprise zone?

Answer 11

a specific geographic area to which governments attract private business investment by offering lower taxes and gov support.

Question 12

What does an incubator do?

Answer 12

offers new businesses in the low cost offices with basic services such as accounting, legal, and secretarial help

Question 13

What’s the advantage of entrepreneurial teams

Answer 13

Team members combine creative skills with production and marketing skills

Question 14

Define a small business

Answer 14

one that is independently owned and operated, is not dominant in its field of operations, and meets standard size in terms of employees or annual receipts.

Question 15

What four things might you hear from an experienced entrepreneur

Answer 15

1. Location is critical
2. Don’t be undercapitalized
3. It’s difficult to hire and train good workers
4. Keep good records, accountants, and lawyers.

Question 16

What are six keys to succeeding in your business

Answer 16

1. Plan your business
2. Finance your business
3. Know your customers
4. Manage your employees
5. Keep records
6. Look for help

Question 17

Define a business plan

Answer 17

A detailed written statement that resources and qualifications of the owners(s).

Question 18

What is the first part of a business plan and what should it cover?

Answer 18

Cover letter should summarize the most attractive points

Question 19

What is included in an executive summary?

Answer 19

two to three pages that summarize the venture

Question 20

This is section two of a business plan and should include operations to date, risk, opportunity, legal considerations, balance sheets, cash flow, etc.

Answer 20

Company background

Question 21

What should section three, Management Team, include

Answer 21

Org chart, resumes, job descriptions of current and proposed execs

Question 22

Section four provides a five year projection for income, expenses, and funding. What is the title of section 5?

Answer 22

Financial Plan

Question 23

What should you include in section 5, Capital Required?

Answer 23

Capital needed to commence or continue operations, and how those funds will be used.

Question 24

This is the 6th Section and should include industry size, trends, and market segments. Most importantly it should include what makes your product more desirable.

Answer 24

Marketing plan

Question 25

What should be included in section 7, the location analysis?

Answer 25

A demographic analysis of consumers in the area of the proposed business as well as the traffic pattern analysis.

Question 26

Section 8 describes the minimum plant size, machinery required, production capacity, quality control, etc. What is it titled?

Answer 26

Manufacturing Plan

Question 27

Name section nine and what’s included in it.

Answer 27

Appendix, all research and references.

Question 28

What is a venture capitalist?

Answer 28

Individuals or companies that invest in new businesses in exchange for partial ownership of those businesses.

Question 29

What is the SBA

Answer 29

Small Business Administration, a gov agency that advises and assists small businesses by providing management training, financial advice, and loans.

Question 30

What is the SBIC

Answer 30

Small Business Investment Company Program, are private investment companies licensed by the SBA to lend money to small businesses.

Question 31

Define the market

Answer 31

People with unsatisfied wants and needs who hav both the resources and the willingness to buy.

Question 32

One of the most important aspects to starting a business is understanding the

Answer 32

market

Question 33

What are three major hurdles to enter the world market?

Answer 33

1. Financing
2. Lack of knowledge on how to get started
3. The bureaucratic paperwork