Chapter 6 - Starting your own Business

Question 1

Person who seeks a profitable opportunity and takes the necessary risks to set up and operate a business.

Answer 1

Entrepreneur

Question 2

Person who identifies a business opportunity and allocates available resources to tap that market.

Answer 2

Classic Entrepreneur

Question 3

Person who starts one business, runs it, and then starts and runs additional businesses in succession.

Answer 3

Serial Entrepreneur

Question 4

Person who recognizes societal problems and uses business principles to develop innovative solutions.

Answer 4

Social Entrepreneur

Question 5

Person who starts a business to reduce work hours and create a more relaxed lifestyle.

Answer 5

Lifestyle Entrepreneur

Question 6

Initial funding needed to launch a new venture.

Answer 6

Seed Capital

Question 7

Borrowed funds that entrepreneurs must repay.

Answer 7

Debt Financing

Question 8

Funds invested in new ventures in exchange for part ownership.

Answer 8

Equity Financing

Question 9

Business firms or groups of individuals that invest in new and growing firms in exchange for an ownership share.

Answer 9

Venture Capitalists

Question 10

Wealthy individuals who invest directly in a new venture in exchange for an equity stake.

Answer 10

Angel Investors

Question 11

Process of promoting innovation within the structure of an existing organization.

Answer 11

Intrapreneurship

Question 12

Three ongoing trends that support and expand the opportunities for entrepreneurs are?

Answer 12

1. Globalization
2. Education
3. Information Technology

Question 13

The process for starting a new venture:

Answer 13

1. Select Business Idea.
2. Create a Business Plan.
3. Financing your Venture.

Question 14

Eight Steps to create a Business Plan.

Answer 14

1. Executive Summary
2. Companies Mission/Vision
3. Outline of what makes you Unique.
4. Customers
5. Competition
6. Financial Evaluation
7. Assessment of Risks
8. Resume of Principals

Question 15

Five ways to finance your Venture.

Answer 15

1. Seed Capital
2. Debt Financing
3. Equity Financing
4. Crowd Funding

Question 16

Three types of Debt Financing.

Answer 16

1. Credit Cards
2. Family & Friend Loans
3. Bank Loans (SBA Backed)

Question 17

Two ways of Equity Financing.

Answer 17

1. Venture Capitalists

2. Angel Investors

Question 18

What are Venture Capitalists?

Answer 18

Investment Companies with their own funds or Representatives of a group of Angels.

Question 19

What are Angel Investors?

Answer 19

Individuals with their own money to lend.

Question 20

What is Crowd Funding?

Answer 20

Is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet.

Question 21

What is a Business Incubator?

Answer 21

A local program designed to provide low-cost shared business facilities to small start-up ventures.

Question 22

Three Reasons to Choose Entrepreneurship:

Answer 22

1. Pursuing Your Vision
2. Being Your Own Boss
3. Achieving Financial Success

Question 23

Three Categories of Entrepreneurs

Answer 23

1. Classic Entrepreneurs
2. Serial Entrepreneurs
3. Social Entrepreneurs

Question 24

8 Characteristics of Entrepreneurs

Answer 24

1. Vision
2. High Energy Level
3. Need to Achieve
4. Self Confidence & Optimism
5. Tolerance for Failure
6. Creativity
7. Tolerance for Ambiguity
8. Internal Locus of Control

Question 25

What is Franchising?

Answer 25

Contractual Business arrangement between a manufacturer or other supplier and a dealer, such as a restaurant operator or retailer.

Question 26

Name some Franchises.

Answer 26

1. Hampton Hotels 2. Subway 3. McDonald 4. Pizza Hut 5. Super Cuts

Question 27

5 Guidelines Entrepreneurs should use when considering their initial business ideas.

Answer 27

1. List your interests & abilities. 2. Evaluate Goods & Services looking for ways to improve them. 3. Learn as much as you can about your industry. 4. Conduct Market Research 5. Read Surveys & Projected Growth in various industries.