Test 1

Question 1

What are the different reasons to study entrepreneurship?

Answer 1

1- Students are more likely to start a business
2- Students who enrol in these classes earn more money
3- Learn about business planning, growth management and family businesses
4- Development of critical thinking and problem-solving skills
5- More likely to succeed in today’s workforce
6- 99% of businesses in Canada are considered small businesses

Question 2

What factors are at cause for the entrepreneurial revolution?

Answer 2

1- Increase in the number of business establishment
2- Increase in the number of small business owners
3- Increase in the number of small-business related courses in college and university courses
4- Increase in government interest
5- Increase in “intrapreneurship”
6- Increases in the political power of small business
7- Improvement in the image of small business

Question 3

How is the government helping small businesses?

Answer 3

By reducing paperwork and establishing new programs, both financial and non-financial.

Question 4

What criteria are used to define a small business?

Answer 4

• Number of employees ( <100)
• Type of owner-manager structure
• Total revenue
• Net profits ( <300,000$)

Question 5

What demographics are showing increasing interest in entrepreneurship?

Answer 5

• Young people
• Senior (fastest growing)
• Women
• Immigrants

Question 6

What contributions do small business bring to Canadian society?

Answer 6

• More labour intensive = more employees for same output
• Innovation
• Flexibility
• Canadian ownership
• Linked to economic growth
• Social contributions

Question 7

What characteristics set small businesses from larger ones?

Answer 7

Stay close to the customer, autonomy, employees are more directly linked to the company’s success, executives stay closer, fewer administrative layers.

Question 8

What are some advantages of starting a small business?

Answer 8

• Independence
• Skill development
• Potential financial rewards
• Challenge
• Enjoyment

Question 9

What are some disadvantages of starting a small business?

Answer 9

• Risk
• Stress
• Limited financial rewards
• Need for many skills (accounting, finance, marketing, etc.)
• People conflict
• Time consuming

Question 10

What characteristics make a good entrepreneur?

Answer 10

• Goal oriented
• Risk taking
• Independence, self-confidence
• Innovativeness
• Verbal and numerical skills
• Good seller
• Problem-solving abilities
• Perseverant

Question 11

What are some of the things successful businesses achieve?

Answer 11

• Alertness to change
• Ability to attract and hold good employees
• Staying close to the consumer
• Detailed operating plan
• Ability to obtain needed capital
• Effective handling of laws and regulations

Question 12

What are some causes for small business failures?

Answer 12

• External shock (changes in economy/interest rates, new competitors, loss of customers, etc.)
• Management problems: unable to raise funds, control costs, hold employees, plan ahead, etc.)

Question 13

What are the four steps of the entrepreneurial process?

Answer 13

1- Identification and evaluation of opportunity
2- Development of a business plan
3- Determination of necessary ressources
4- Management of the business

Question 14

What are some sources of ideas to start a small business?

Answer 14

• Current or prior work experience
• Hobbies
• Personal experience
• Observations
• Existing products and services
• Deliberate searches: focus group and brainstorming

Question 15

What is a qualitative assessment?

Answer 15

An assessment of the qualitative (no numbers) aspects of an idea for a small business to establish if it’s a good opportunity.

Question 16

What factors should one consider in a qualitative assessment?

Answer 16

• Goals (does the business allow to achieve personal goals)
• Content of work (Physical? Interactive?)
• Lifestyle (How much time will the business use? What kind of lifestyle does that allow?)
• Capabilities (Chap 2 + good health + fundamental management skills)
• Experience

Question 17

What is an opportunity assessment?

Answer 17

Answers to a list of question regarding market entry, customers, start-up costs, etc. After answer these questions, it should give a pretty good sense whether or not an idea is worth pursuing.

Question 18

What are the 3 different ways to enter a market?

Answer 18

1- By offering a new product
2- By offering an existing product to a new market
3- By offering a similar product in the same market

Question 19

What are some industries that give small businesses competitive advantage?

Answer 19

• Where owner’s personal attention is essential
• Where owner-employee contact is important to quality of work
• Where flexibility is required
• Labour intensive > Capital intensive
• Industries encourages by government

Question 20

What are the top Canadian business areas for the future?

Answer 20

• Health care
• Services for small business
• Mobile
• Services for parents
• Green products/services

Question 21

What is the difference between primary and secondary information?

Answer 21

Primary information is info you get yourself (through surveys, test marketing and observation) whereas secondary info is already available and has been completed by another organization.

Question 22

What is the 1st step of a qualitative assessment?

Answer 22

Calculating market potential.

Question 23

What are the three steps required to calculate market potential?

Answer 23

1- Determining market area and population
2- Obtain sales statistics for the area and for the product type
3- Adjust market potential as necessary (take into account the age of the statistics)

Question 24

What is the 2nd step of a qualitative assessment?

Answer 24

Calculating market share

Question 25

How does one calculate market share?

Answer 25

( Proposed ÷ Total ) x 100% = Percentage of market share