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SBM > Midterm Review > Flashcards

Midterm Review Flashcards

1
Q

A prospective entrepreneur wants to find a career doing what she enjoys most-designing and selling clothing. She might be drawn to try an entrepreneurial venture in order to realize

A

personal fulfillment

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2
Q

The three primary rewards or incentives for entrepreneurs are

A

independence, personal fulfillment, and profit

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3
Q

An owner-manager who bought out the founder of a firm would be classified as a(n)

A

entrepreneur

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4
Q

Individuals are typically pulled toward entrepreneurship by the hope of obtaining

A

financial rewards

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5
Q

Reluctant entrepreneurs

A

individuals who have entered business as a result of financial hardshp or other severe negative conditions

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6
Q

The size standard for small business used in the textbook would exclude

A

firms with more than 100 employees

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7
Q

Risk of business failure

A

drawback of entrepreneurship

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8
Q

A prospective entrepreneur is evaluating the suitability of his own characteristics for an entrepreneurial career. He realizes that he should be prepared to assume

A

moderate risks

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9
Q

Game plan for a business

A

business plan

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10
Q

A business plan should generally project financial and operational aspects of the proposed business for the first

A

3-5 years

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11
Q

Operating Plan

A

where the facilities and location are described in the business plan

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12
Q

A passion for business

A

Something entreprenuers tend to have

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13
Q

The ideal period of life for starting a business is

A

between the mid 20s and mid 30s

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14
Q

Founder

A

A person who starts a business

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15
Q

Microbusiness

A

A small firm that is profitable but provides only a very modest return to the entrepreneur

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16
Q

Gazelles

A

Small businesses that have great prospects for growth

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17
Q

Attractive Small Firm

A

A firm that provides substantial profits to its owners

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18
Q

Entrepreneurial team

A

Individuals who work together in the same firm as entrepreneurs

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19
Q

Potential advantages of small entrepreneurial firms

A

Customer focus, quality performance, special niche

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20
Q

Moderate Risk Taking Prospensity

A

Entrepreneurs willingness to assume risks

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21
Q

Business to consumer, business to business, auction sites

A

Major categories of e-commerce businesses

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22
Q

Amazon.com

A

B2C

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23
Q

Revenues from auction sites are mostly from

A

listing fees and commissions on sales

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24
Q

Observational or questioning

A

Primary data collection methods

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25
Q

The owner of a home-based business can establish boundaries between the business and the home by

A

setting aside specific space for the business

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26
Q

E-Commerce

A

the paperless exchange of business information via the Internet

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27
Q

Bricks and mortar

A

The traditional physical store

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28
Q

Investors like a business plan that shows evidence of

A

a well balanced managerial team

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29
Q

Why does electronic commerce benefit small firms?

A

Without e-commerce, small firms often lack the resources to expand beyond local markets

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30
Q

The Internet has brought new life and technology to the old-fashioned notion of

A

customer service

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31
Q

Closeness to raw materials

A

top priority in locaiton decisions

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32
Q

Appreciation of the atmosphere of the community, more extensive knowledge of consumer tastes, greater ability to establish favorable credit arrangements

A

Potential advantage of establishing a small business

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33
Q

Decrease in investment risk

A

The primary advantage an entrepreneur gains by leasing rather than buying facilities

34
Q

The most important reason to lease rather than buy a facility is

A

Avoidance of a large cash outlay

35
Q

The functional requirements of a business should determine the

A

suitability of a building

36
Q

A home based business is located

A

in the owner’s home - costs can be decreased which will increase profits

37
Q

A major advantage of using a computer in the business plan

A

Spreadhsheets enable the planner to prepare and make changes to the financial reports

38
Q

When making a decision regarding the extent of planning, an entrepreneur should consider

A

the level of uncertainty of the business

39
Q

Investors and lenders use the business plan to

A

better understand the type of product or service offered by the new venture

40
Q

The business plan is

A

a selling document and should be brief - it assures the understanding of a new business, an ongoing process

41
Q

Maximizing potential return on investment

A

A potential investor’s single goal

42
Q

Market-oriented

A

Plans that appeal effectively to investors

43
Q

Prospectus

A

A marketing document intended to sell a concept

44
Q

Marketing Plan

A

A section of the business plan that describes the user benefits of the product or service and the type of market that exists - this is the section which includes the competition

45
Q

Executive Summary

A

is at the beginning and includes the highlights from various sections of the plan

46
Q

Mission statement

A

Intended strategy and business philosophy for making the entrepreneur’s vision a reality

47
Q

Layman Terms

A

Should be used when describing the product in teh business plan

48
Q

Business planning

A

is an ongoing process

49
Q

Business plan software packages

A

help an entrepreneur think through the important issues in starting a new company

50
Q

When dealing with weaknesses in a business plan

A

the owner should deal with them and have an action plan

51
Q

Synopsis

A

the type of executive summary that briefly covers all aspects of the business plan, giving each topic relatively equal treatment

52
Q

Balance - with each member having competence in at least one area

A

Key to strong management

53
Q

Most of the reasons for failure in many high growth ventures may be traced to

A

specific flaws in the venture team

54
Q

Sole Proprietorship

A

owns the business and assumes all losses of the business, the most rudimentary form of business organization, disadvantage is the lack of limits on personal liability

55
Q

Partnership

A

Owner by two or more people with each person capable of legally contracting for the business - requires that partners are honest, healthy, capable, and compatible with one another. A partner has agency power (can make decisions without asking the permission of the other partners)

56
Q

Corporation

A

Chartered under state laws, the charter should be prepared by an attorney, permission to incorporate comes from the government - an artificial being. Ownership is more easily transferable than ownership in other forms of organization

57
Q

Stockholders

A

have an ownership interest in a corporation that does not confer a legal right to manage the firm

58
Q

Strategic Alliance

A

An organizational relationship that links two separate businesses, they represent promising opportunities for small entrepreneurial firms.

59
Q

Board of Directors

A

Governing body of a corporation

60
Q

Reciprocation

A

A sense of obligation ot repay what has been done for you

61
Q

Customer Accessibility

A

The top priority in location decisions for small businesses

62
Q

Environmental conditions affecting selection of the small business location

A

Competition, weather and climate, laws and regulations

63
Q

Raw Materials availability factor is particularly important for a

A

manufacturer.

64
Q

Agency power

A

the ability of any one partner to legally bind the other partner

65
Q

24/7 e-tailing

A

open 24 hours a day for internet selling

66
Q

Advisory council

A

a group that functions like a board of directors but acts only in an advisory capability

67
Q

Precipitating Event

A

the event that makes the entrepreneur start a business

68
Q

Dehydrated plan

A

a short form of a business plan that presents only the most important issues and projections for the business

69
Q

Enterprise zones

A

state designed areas that are established to bring jobs to economically deprived regions through regulatory taxes

70
Q

LLC

A

Limited Liability Corporation - a form of organization in which owners have limited liability but pay personal income taxes on business profits

71
Q

Lifestyle business

A

a business that is set up and run by its founder primarily to fit into their lifestlye

72
Q

Critical Risk

A

a section of the business plan that identifies the potential risks that may be encountered by an investor

73
Q

Nonprofit corporation

A

A form of corporation that businesses establish to servce civic, educational and charitable purposes but not for generation of profits

74
Q

General Purpose Equipment

A

machines that serve many functions in the production process

75
Q

Social network

A

an interconnected system comprising relationships with other people

76
Q

Stock certificate

A

a document specifying the number the numbber of shares owned by a stockholder

77
Q

Strategic alliance

A

an agreement between two or more parties to pursue a set of agreed objectives

78
Q

Transaction based model

A

a business model in which the website provides a mechanism for buying or selling products or services

79
Q

Zoning ordinances

A

Local laws regulating land use

80
Q

Brick and mortar

A

the traditional physical store from which businesses have historically operated

SBM (2 decks)

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