Chapter 10 Getting Financing or Funding (LO4) 1) Roominate, the company profiled in the opening feature of Chapter 10..

-> In 2013 and 2014, Brooks and Chen attempted to raise money for angel investors
3) According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because they ________. -> B) lack experience in this area and because they don't know much about their choices
4) Courtney Young is the founder of a company in the semiconductor industry. Courtney's firm is still in the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending about $25,000 per month -> C) Burn
5) The three primary reasons startups need funding are ________. -> A) cash flow challenges, capital investments, and lengthy product development cycles
6) In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons ->A) Cash flow challenges
7) For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. -> D) Capital investments
8) Peter Simmons owns a specialized computer software company. Although Peter's software designers and programmers are very good, it takes 2-3 years to develop a good software product. -> D) lengthy product development cycles
10) The Partnering for Success feature in Chapter 10 focuses on Startup Weekend. Startup Weekend is a not-for-profit organization that ________. -> A) creates a context in which small groups of people can start a business in 54 hours
12) According to our textbook, the seed money that gets a company off the ground typically comes from ________. -> E) the founders of the firm 16) Amy Clark just opened a soup and salad restaurant near Golden Gate Park in San Francisco, CA. Rather than borrow money or raise funds from investors E) bootstrapping
13) Katy Anderson's startup, which is in the organic fruit and vegetables industry, was launched on January 1, 2015. However, prior to its formal launch, Katy spent many hours working on her business, particularly during the feasibility analysis stage. -> C) sweat
14) According to the textbook, beyond their own funds, the second source of funds for many new ventures is ________. C) friends and family
15) Steven and Emily Campbell are planning to open a casual dining restaurant in downtown Akron, Ohio, and need $125,000 to get started. They have $50,000 of their own money, which leaves $75,000. A) friends and family
23) Which of the following is not a source of equity funding? E) Government grants 24) Equity investors typically have a ________ year investment horizon C) 3 to 5 25) A liquidity event accomplishes which of the following purposes? C) Converts some or all of a company's stock to cash
27) Which of the following set of characteristics places a startup in the strongest position to apply for equity funding? E) Unique business idea, high growth, niche market, proven management 28) A brief, carefully constructed statement that outlines the merits of a business opportunity is called a(n) ___ speech E) elevator
33) The three most common forms of equity funding are ________ C) initial public offerings, business angels, venture capitalists
34) ________ are individuals who invest their personal capital directly in start-ups B) Business angels 35) Which of the following statements is not correct regarding business angels? B) The number of angel investors has decreased dramatically over the past decade.
36) According to the textbook, the unique value provided by business angels is they ________ B) are willing to make relatively small investments
37) ________ are limited partnerships of money managers who raise money in "funds" to invest in startups and growing firms A) Venture capital firms
38) Venture capital firms are ________ of money managers who raise money in "funds" to invest in startups and growing firms. A) limited partnerships 39) In 2013, venture capital firms funded just over ________ deals. C) 4,000
40) Once a venture capitalist makes an investment in a firm, subsequent investments are made in rounds and are referred to as ________. D) follow-on funding 41) An important part of obtaining venture capital funding is going through ________ diligence,…… C) due
42) In regard to the stages (or rounds) of venture capital funding, the stage of funding that occurs when an investment is made very early in a venture's life A) seed 43) The first sale of stock by a firm to the public is referred to as a(n) ________. E) initial public offering
44) The What Went Wrong? feature in Chapter 10 focuses on DrawQuest. DrawQuest captured the attention of venture capitalists, gained 25,000 users, and still failed. According to the feature, the main reason DrawQuest failed is that the founders ________. C) never figured out the business side of the venture
45) A(n) ________ bank is an institution, such as Credit Suisse First Boston, D) investment 54) Debt financing involves ________. E) getting a loan or selling corporate bonds
55) Historically, commercial banks ________. E) have not been a good source of funds for startup firms 56) The two major advantages of getting a loan versus investment capital are ________. D) no ownership in the firm is surrendered and interest payments are tax deductible
57) The most notable SBA program available to small businesses is the ________. C) 7(A) Guaranty Program 58) ________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash. A) Factoring
61) Kickstarter and Indiegogo are examples of ________ crowdfunding sites. E) reward-based 62) The two types of crowdfunding sites are ________-based and ________-based A) rewards; equity
63) FundersClub and Crowdfunder.com are examples of ________-based crowdfunding sites D) equity 64) A(n) ________ is a written agreement in which the owner of a piece of property allows an individual or business to use the property for a specified period of time in exchange for E) lease
65) The major advantage of leasing is that ________. B) it enables a company to acquire the use of assets with little or no down payment 66) The ________ Program is a competitive grant program that provides over $2.5 billion per year to small businesses B) SBIR
67) Which "phase" of the SBIR Program is a six-month feasibility study in which the recipient must demonstrate the technical feasibility of the proposed innovation? A) Phase I 68) The SBIR is a ________-phase program, meaning that firms that qualify have the potential to receive more than one grant B) three
71) The Savvy Entrepreneurial Firm feature in Chapter 10 focuses on the manner in which biotech firms and large drug companies work together to bring pharmaceutical products to market. A) innovation
Chapter 9 Building a New-Venture Team (L04) 1) The fact that companies often falter because the people who start the firms can't adjust quickly enough to their new roles and because the firm lacks a "track record"… B) liability of newness
2) Savanna Combs opened a clothing boutique two years ago. Unfortunately, the boutique failed after 18 months. Savanna attributes the failure of her boutique to the facts that her employees C) liability of newness
4) The Partnering for Success feature in Chapter 9 focuses on a technique that entrepreneurs use to overcome the liabilities of newness. The suggestion made by the feature is to overcome the liabilities of newness by considering ________. E) joining a startup accelerator
7) Next Big Sound, the company profiled in the opening feature of Chapter 9, is a music analytics company. Which of the following statements in incorrect D) The idea for Next Big Sound was created at a Startup Weekend event in San Francisco.
8) A ________ is the group of founders, key employees, and advisers that move a new venture from an idea to a fully functioning firm. C) new venture team
9) Kathy Denver is preparing to launch a home security firm. The team of people that will launch Kathy's firm are as follows: C) new venture team 10) Which of the following was not identified in the textbook as an element of a new venture team? B) Suppliers and vendors
11) According to the textbook, studies show that more than one individual starts ________ percent of all new firms. B) 50 to 70 13) Which of the following statements is incorrect regarding founding teams? B) Teams that are working together for the first time have an advantage over teams that have worked
14) The members of heterogeneous teams are ________. A) diverse in terms of their abilities and experiences 15) The members of homogeneous teams are ________ in terms of their ________. C) similar; abilities and experiences
16) According to the textbook, which of the following statements is inaccurate regarding the size and composition of the founding team of a firm? A) There is no relationship between a founding team's size and its effectiveness
17) According to the textbook, prior entrepreneurial experience ________. C) is one of the most consistent predictors of future entrepreneurial performance
20) The What Went Wrong feature in Chapter 9 focuses on Deever, a 2008 startup that helped software developers use cloud-based services to "test" their code A) it lacked a cofounder who loved the business side of running a startup
21) The process of building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to the firm C) networking
22) Sam Simpson is a four time business owner. One thing that has served Sam well throughout his entrepreneurial career is his ability A) networker 23) A(n) ________ is a chart that depicts the most important skills that are needed in a new venture and where skills gaps exist D) skills profile
24) Jason Andersen just finished writing a business plan for a new type of office supply store. Jason included in the "Management Team & Company Structure" A) skills profile 25) A skills profile is a chart that depicts the ____ C) most important skills that are needed in a business startup and where skills gaps exist
27) A(n) ________ is a person who works for a business as an apprentice or trainee for the purpose of obtaining actual experience. C) intern 29) Calvin Tucker is in the process of launching an educational services firm. He plans to incorporate the firm Because the firm will be incorporated D) board of directors
30) A board of directors is typically made up of both ________ and ________ directors. B) inside; outside 31) In the context of boards of directors, a(n) ________ director is a person who is also an officer of the firm. C) inside
32) In the context of boards of directors, a(n) ________ director is someone who is not employed by the firm A) outside 33) James Williams is the Chief Operating Officer of a startup in the health food industry. He is also a member of his firm's board of directors. A) inside
34) Adam Miller is a general partner in a venture capital firm that just funded Gold Coast Software, a software firm in Santa Barbara, California. Gold Coast Software is incorporated, and Adam has taken a seat on the firm's board of directors. E) outside
35) A board of directors' three formal responsibilities are to _______ B) appoint the officers of the firm, declare dividends, and oversee the affairs of the corporation 36) A board of directors' three formal responsibilities are to appoint the officers of the firm, oversee affairs and_D) declare dividends
39) According to the textbook, although a board of directors has formal governance responsibilities, its most useful role is to __. A) provide guidance and support to the firm's managers
40) Liz Zackery just launched a firm in the sporting goods industry. On the day the company was launched, Liz issued a press release, indicating that the vice president of New Balance B) signaling 42) Which of the following was not identified an attribute of an effective board of directors? A) Homogeneous set of..
43) Which of the following was not identified in the textbook as an attribute of an effective board member? B) Unknown in their field 58) A(n) ________ is a panel of experts who are asked by a firm's managers to provide counsel and advice on an ongoing basis. D) advisory board
61) Which of the following statements about advisory boards is incorrect? C) Similar to a board of directors, an advisory board has legal responsibility for the firm in certain areas. 62) Which of the following statements about advisory boards is incorrect? A) If a firm has a BOD, not permitted to have advisory board.
63) According to the textbook, most boards of advisers have between ________ and ________ members. A) 5; 15 70) A business ________ is an individual who gives professional or expert advice, on a volunteer or fee basis. E) mentor
71) Which of the following is incorrect regarding the typical role of consultants in business startups? E) Help manage the day-to-day activities of the firm
Chapter 6 Writing a Business Plan (L03) 1) TempoRun, the company profiled in the opening feature of Chapter 4, makes an iPhone app that syncs the songs on a user's phone with his or her running pace. In 2013, A) Student Startup Madness held at the South by Southwest Festival in Austin, Texas
2) Peter Watson is thinking about launching a small business consulting company. To get advice on how to proceed, he stopped by his local Small Business Administration (SBA) office. D) business plan
3) Which of the following is the main purpose for writing a business plan? C) Both A and B are equally important 4) According to the textbook, a business plan is best described as a(n) __. A) narrative description of a new business 5) According to the textbook, a 2010-2012 study of 350 entrepreneurs D) 30 percent
11) Which of the following statements is incorrect about business plans? E) The business plan should be written while the feasibility analysis is being completed. 12) The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm A) business plan
13) The two primary audiences for a business plan are___ and __. E) a firm's employees and investors; other external stakeholders 14) The two primary audiences for a business plan are investors and other external stakeholders and _ B) a firm's employees
15) Which of the following is not an individual, group or institution that normally reads a company's business plan? C) State and local government officials 19) Which of the following is not one of the "red flags" listed in the textbook that raises questions B) Defining the market size too narrowly
16) Which of the following is not a recommended guideline for writing a business plan? A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way. 19) Which of the following is not one of the "red flags" listed B) Defining the market size narrowly
20) Which of the following is one of the "red flags" listed in C) Defining the market size too broadly 21) To make the best impression, a business plan should follow a ___ B) conventional structure for manufacturing firms and a nonconventional structure for service firms
22) For most business plans ________ pages are sufficient D) 25 to 35 23) The three types of business plans are ________. E) summary business plan, full business plan, operational business plan
24) Sarah Parks is in the very early stages of putting together a business startup, and is thinking about writing a business plan to request funds to conduct a feasibility analysis and write a more complete business plan C) Summary business plan
25) A(n) ________ business plan, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing D) full 51) A company's mission statement should be placed in the ________ section of its business plan. C) company description
26) A(n) ________ business plan, which is intended to be a blueprint for a company's operations, is 40-100 pages long and is meant primarily for an internal audience A) operational 45) The ________ is a short overview of the entire business plan. B) executive summary
29) Which of the following business plans matches with its appropriate emphasis? E) Summary business plan - works best for companies in the early stages of development that want to "test the waters" to see if investors are interested in their idea
46) Which of the following statements is incorrect regarding the executive summary of a business plan? E) The executive summary is the first thing that should be written in preparing a business plan 53) A(n) ________ statement describes why a company exists and what it aspires to become C) mission
49) The Savvy Entrepreneurial Firm feature in Chapter 6 focuses on three companies: Songkick, GrubHub, and Instagram. The overarching B) the degree to which business plans pan out as their founders envisioned varies
50) Which of the following statements is incorrect regarding the industry analysis portion of a firm's business plan? A) It is important to focus simultaneously on a business's industry and its target market. 52) Industry structure refers to how ________ an industry is. A) concentrated or fragmented
53) A(n) ________ statement describes why a company exists and what it aspires to become. C) mission 54) A(n) ________, in a business plan context, is a noteworthy event in the past or future development of a business. D) milestone
55) The ________ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal. C) market analysis 58) The ________ section of the business plan addresses the basic logic of how profits A) economics of the business
59) Operating leverage is highest in companies that have ____ E) a high proportion of fixed costs relative to their variable costs 62) A prototype is ___. D) the first physical depiction of a new product 63) What section of the business plan deals with the day-to-day operations of a company? C) Operations
60) Which of the following statements is incorrect regarding the marketing plan section of a business plan? C) The best way to describe a company's marketing plan is to begin by talking about its competitors.
65) According to the textbook, many investors and others read business plans look first at the executive summary then go directly to the _____ A) management team and company structure 66) A(n) __ is a graphic representation of how authority and responsibility are distributed within a company A) organizational
67) The document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for is referred to as a(n) ________. A) sources and uses of funds statement
68) Kate Payne was reading the business plan for New Venture Fitness Drinks, and noticed that prior to its financial statements C) assumptions sheet 69) According to the textbook, the ________ are the heart of the financial section of a business plan B) pro forma financial statements
70) Most business plan writers interpret or make sense of a firm's historical and/or pro forma financial statements through ________ analysis. A) ratio 73) According to the textbook, the first rule in making an oral presentation is to ____ A) follow instructions\
Chapter 5 Industry and Competitor Analysis (L02) 1) Greenvelope, the company profiled in the opening feature of Chapter 5, believes it has created sufficient barriers E) its international presence, the price-point of its products, its social mission, and the innovative nature of its products
2) Terry Washington recently started a new firm in the financial services industry. Prior to starting his firm A) industry 3) A(n) ________ is a group of firms producing a similar product or service, such as soft drinks, airlines, or smartphone apps. D) industry
4) Once a firm decides to enter an industry and chooses a market in which to compete C) competitor 6) In various studies, researchers have found that from ________ percent of the variation in firm profitability is directly attributable to the industry in which a firm competes. B) 8 to 30
7) Industries that sell products to seniors, such as the eyeglass industry and the hearing aid industry, are benefiting from the aging of the population, which is an important ________ trend A) environmental 7) Industries that sell products to seniors, such as the eyeglass industry A) environmental
8) Many firms benefit from an increasing ability to outsource manufacturing or service functions to lower-cost foreign countries A) business 18) In general, industries are more attractive when the ________ E) threat of each of the five forces is low
9) The Partnering for Success feature in Chapter 5 focuses on three things that are important for startups to become active in to learn the ins and outs of their industries. The three items focused C) trade associations, trade shows, and trade journals
16) According to the textbook, the five competitive forces included in the Five Forces model determine the average ________. C) rate of return for the firms in an industry 19) Generally, industries are more attractive when the threat of substitutes is _______ B) low
17) According to the textbook, how do well-managed firms respond to the five forces that determine industry profitability? E) They try to position their firms in a way that avoids or diminishes the forces
20) The price of prescription medicine is high, partly because when someone is sick there is no real alternative to buying medicine if they want to get better. Which of Porter's five forces C) Threat of substitutes
21) Which of Porter's five forces is most closely associated with the concept "barrier to entry"? C) Threat of new entrants 22) Which of the following is not one of the major sources of barriers to entry? C) Buyer group concentration
23) Shelly Brunner owns a sports-themed restaurant which is located in an upscale business district in Chicago. One advantage that Shelly has is that she bought the lot she built her restaurant on 25 years a E) Cost advantage independent of size
24) Some industries, like the athletic shoe industry, are dominated by a small number of firms with strong brands. These industries are difficult to break into without spending heavily on advertising. The barrier to entry that the firms in these types of industries have erected is referred to as _. C) product differentiation
25) Which of Porter's five forces is most directly influenced by the number and balance of competitors, degree of difference between products, growth rate of an industry, and level of fixed costs? B) Rivalry among existing firms
26) If a startup pioneers an industry or a new concept within an industry, the name recognition the startup establishes may create a formidable nontraditional barrier to entry referred to as a( D) first-mover advantage
27) According to the example provided in Chapter 5, www.1800contacts.com possesses a nontraditional barrier to entry referred to as D) Internet domain name 28) Which of the following was not identified in the textbook as a nontraditional barrier to entry? D) Product differentiation
29) Supplier concentration, switching costs, attractiveness of substitutes, and threat of forward integration are factors that have a direct impact on ________. E) bargaining power of suppliers
30) Tim Rutherford is thinking about starting a firm in the medical equipment industry. In the industry analysis Tim has been conducting, one thing he has noticed is that the medical equipment industry is characterized by buyer group concentration B) bargaining power of buyers
38) According to the textbook, the Five Forces model can be used in the following two ways: E) first, to help a firm determine whether it should enter a particular industry, and second, to help a firm discern whether it can carve out an attractive position in that industry
39) Brain Sentry is starting a firm in the small industry that helps football teams discern whether a player has suffered a concussion. This industry is still so new that no standard operating procedures have been developed C) emerging
40) The primary opportunity existing for startups in emerging industries is to _______ D) capture a first-mover advantage 41) A(n) ________ industry is one that is characterized by a large number of firms of approximately equal size. A) fragmented
42) The primary opportunity existing for startups in fragmented industries is to ____ E) consolidate the industry and establish industry leadership as a result of doing so 43) A(n) ________ industry is an industry that is experiencing slow or no increase in demand C) mature
44) According to the textbook, Justin's in peanut butter, Pure Fix Cycles in bicycles, and Flings Bins in trash bags are examples of entrepreneurial firms who are exploiting opportunities in ________ industries. D) mature
45) According to the textbook, Chipotle Mexican Grill in fast-casual restaurants and 1-800- GOT_JUNK? E) fragmented 46) According to the textbook, Nucor in steel, JetBlue in airlines, and Cirque du Soleil in circuses are C) declining
47) Opportunities for leadership, niche, harvest and divestment are associated with ________ industries. C) declining 48) A(n) ________ industry is an industry that is experiencing significant international sales A) global
49) The two most common strategies pursued by firms in global industries are the ________ strategy and the ________ strategy. B) multidomestic, global 50) Firms that pursue a(n) ________ strategy compete for market share on a country-by-country basis and vary their product or service C) multidomestic
51) Kellen West recently launched a firm in the fruit drink industry, and has already exported his fruit drinks to 11 different countries E) multidomestic 52) Katherine Chapman recently launched a firm in the clothing industry, targeting 13-17 year olds. D) global
59) According to the textbook, the first step in a competitor analysis is to ________. E) determine who the competition is ) According to the textbook, the three different types of competitors a business will face are D) direct, indirect, and future
61) In the context of competitor analysis, businesses that offer identical or similar products are referred to as ________ competitors B) direct 62) Aquafina operates in the bottled water industry. The companies that offer identical or similar products and go after the same customers A) direct
63) In the context of competitor analysis, ________ competitors offer close substitutes to the product sold by the firm completing the analysis. C) indirect 64) In the beverage industry, soda, fruit juice, and sports drinks are ________ competitors of bottled water C) indirect
65) In the context of competitor analysis, ________ competitors are companies that are not yet direct or indirect competitors but could move into one of these roles at any time. E) future 66) The information that is gathered by a firm to learn about its competitors is referred to as E) competitive intelligence
Chapter 4 Writing a Business Plan (L02) 1) Lincoln & Lexi, the company profiled in the opening feature for Chapter 4 E) sell childrens clothing through home parties and baby showers 2. Martin nelson is thinking about launching a small business business plan
3) which of the following is the main purpose for writing a 'business plan C) Both A and B are equally important 4. According to the textbook, a business plan is best described as an: narrative description of a ? new business
5. According to the textbook, only 31% of the 600 entrepreneurs that participated in a recent Wells Fargo/Gallup Small Business Study indicated that they had started their venture with a business plan.
6. A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and it communicates the merits of the new venture to outsiders, such as investors and bankers.
7. Which of the following statement is incorrect about business plans: the business plan should be written while the feasibility analysis is being completed.
8. The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the: A) business plan
9) Where are two primary audiences for a business plan: a firm’s employees and investors and other external stakeholders
10) Where are two primary audiences for a business plan: investors and other external stakeholders and a firm’s employees 11) Which of the following is not an individual, group or institution that normally reads a company’s business plan: state and local government officials
12) Which of the following is not a recommended guideline for writing a business plan: A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way
13) Which of the following is not one of the red flags listed in the textbook that raises questions about one of more aspects of a company’s business plan: defining the market side too narrowly
14) Which of the following is one of the “red flags” listed in the textbook that raises 7uestions about one or more aspects of a company’s business plan: defining the market side too broadly
15) Which of the following statements is incorrect regarding business plans: To make the best impression, a business plan should follow an unconventional structure, so it will stand out
16. For most business plans 25 to 35 pages are sufficient 17) There are three types of business plans: summary business plan, full business plan, operational business plan
18. Zachery mays is in the very early stages of putting together a business startup, and is thinking about writing a business plan to request funds to conduct a feasibility analysis and write a more complete business plan. What type of business plan should Zachery write at this point: summary business plan
19) A full business plan which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing 20. A operational business plan which is intended to be a blueprint for a company’s operations, is 40-100 pages long and is meant primarily for an internal audience
21) Edward Andrews has decided to write a business plan that is intended to be read primarily by his staff, which will present a blueprint for his company’s entire operation and will provide guidance to operational managers. Edward should write a: A) operational business plan
22) Match the business plan with its appropriate length: full business plan, 25-35 pages 23. Match the business plan with its appropriate emphasis: summary business plan, works best for companies in the early stages of development that want to “test the waters” to see if investors are interested in their idea 24) The
Savvy Entrepreneurial firm feature for Chapter 4 focuses on three companies: Box.net, Pixability, and Groupon. The overarching point of the feature is: the degree to which business plans pan out as their founders envisioned varies
25. the executive summary is a short overview of the entire business plan 26. which is wrong about executive summary: is the first thing that should be written in preparing a business plan 27. paul henpken: executive summary
28. im some case, investors request executive summary first, then ask a copy of full business plan if that portion of the plan is sufficiently convincing
29. which is wrong about the industry analysis portion of a firm’s business plan: it is important to focus simultaneously on a business’ industry and its target market
30. a company’s mission statement should be placed in the company description section 31. insutry structure refer to how: concentrated and fragmented an industry is
32. A mission statement show why a company exists and what it aspires to become 33. a milestone in a business plan context is a noteworthy event in the past or future development of a business
34. the market analysis section of a business plan breaks the industry into segments and zeroes in on the specific segments (or target market) to which the firm will try to appeal
35. a competitor analysis should be included in the market analysis part 36. the partnering for success feature…. Because they have limited resources 37. the economics of the business show the how profits are eared in the business.
38. operating leverage is highest in the companies that have a high proportion of fixed costs relative to their variable costs 39. which is wrong about the marketing plan section: the best way to describe is to begin by talking about its competitors
40. a computer generated the image as 3D model is virtual prototype 41. a prototype is a first physical depiction of a new product 42. operations plan is deal with the day-to-day operations of a company 43. the facilities and equipment should be described in the operations plan section
44. many investors look first at the executive summary and go directly to the management and company structure section to make their preliminary assessment 45. a organization chart is a graphic representation of how authority and responsibility are distributed within a company
Chapter 3 - Feasibility Analysis (LO2) 1) Think Gum, the company profiled in the opening feature for Chapter 3, produces gum. The idea behind Think Gum is to produce a gum that includes ingredients that improve concentration and memory. Think Gum initial target market was: C) college students
2) According to the textbook, which is the proper sequence of events in developing successful business ideas? A) opportunity recognition, feasibility analysis, development of a business plan 3) ________ is the process of determining whether a business idea is viable. A) Feasibility analysis
4) Janice McDaniel recently surveyed 200 of her classmates to get a sense of the demand for a new software product she is working on. Collecting data via a survey you administer yourself is referred to as: C) primary research 5) Primary research is: A) original research and is collected by the entrepreneur
6) Trade journals, industry-related publications, government statistics, and competitors' Websites are examples of: A) secondary research
7) Jennifer Burroughs is thinking about starting a firm in the upscale fashion industry. To get a full appreciation of the competitive nature of the industry, and how she might position her products : B) secondary research
8) The What Went Wrong feature in Chapter 3 is titled "eBay Drop-Off Stores: How Feasible Were They? What was it about the potential feasibility of eBay Drop-Off stores that worried skeptics from the beginning? A) That the stores would not have enough "quality" merchandise to sell on eBay and that the variety of items
the stores would be asked to sell would be too broad.
9) Which of the following is not one of the four areas of feasibility analysis discussed in the textbook? C) institutional feasibility
10) ________ feasibility is an assessment of the overall appeal of the product or service being proposed. D) Product/service 11) Does it make sense? Is it reasonable? Is it something consumers will get excited about? during the ________ component of a compete feasibility analysis.E) product/service feasibility
12) Which of the following is not a part of assessing the product/service feasibility of a business idea? D) assessment of total start-up cash needed 13) The two components of product/service feasibility analysis are product/service desirability and: E) product/service demand
14) The two components of product/service feasibility analysis are: D) product/service desirability and product/service demand
15) A ________ involves showing a preliminary description of a product or service idea to prospective customers to gauge customer interest, desirability, and purchase intent. A) concept test 16) Which of the following items is typically not included in a concept statement? C) a description of how much money the new
17) Brian James is in the process of developing an exciting new product in the electronic games industry.: D) concept statement 18) Which of the following is an incorrect approach to administering a concept test? C) The best candidates to distribute a concept statement to are family and friends.
19) A ________ survey is an instrument that is used to gauge customer interest in a product or service.A) buying intentions 20) Tim Hughes is distributing an instrument, which includes a concept statement with a short survey D) buying intentions survey
21) A buying intentions survey is typically administered as part of ________ feasibility analysis.E) product/service
22) Shelly Jones is investigating the feasibility of a new tutoring service for high school students. To get a good handle on the potential demand for her service, .C) gumshoe
23) John Kite is investigating the feasibility of a new type of electronic game targeting middle school and high school-age boys? E) Spend several days in electronic games arcades and stores to observe the types of games that attract the interest of middle school age and high school age boys.
24) A(n) ________ is a group of firms producing a similar product or service. A firm's ________is the limited portion of the industry that it goes after or to which it wants to appeal. E) industry, target market
25) The two components of industry/target market feasibility analysis are: B) industry attractiveness/target market attractiveness 26) ________ feasibility analysis is an assessment of the overall appeal of the industry and market for the product or service being proposed. B) Industry/target market
27) A(n) ________ is a group of firms producing a similar product or service, such as computers, cars, or airplanes. B) industry 28) Which of the following issues should be considered in industry/target market feasibility analysis?D) industry attractiveness
29) Mintel, IBISWorld, and Standard & Poor's Net Advantage are databases most likely to be used during the ________ feasibility stage of the full feasibility analysis process. D) industry/target market 30) Which of the following is not an attribute of an attractive industry? C) is fairly old rather than young and less mature
31) A ____ market is a place within a larger market segment that represents a narrower group of customers with similar needs. C) target 32) Which of the following statements about target markets is incorrect? E) Its generally easier to find good information about a target market than an industry as a whole.
33) ________ is conducted to determine whether a proposed business has sufficient management expertise, organizational competence, and resources to successfully launch its business. D) Organizational feasibility analysis
34) The two primary issues to consider in organizational feasibility analysis are: B) management prowess and resource sufficiency 35) The two primary issues to consider in organizational feasibility analysis are resource sufficiency and: C) management prowess
36) A(n) ________ is the group of founders, key employees, and advisers that either manage or help manage a new business in its start-up years. E) new venture team
37) Which of the following is an example of a resource that normally would not be evaluated as part of the "resource sufficiency" stage of organizational feasibility analysis? B) financial resources
38) According to the textbook, two of the most important factors to consider regarding "management prowess" are: A) the passion the sole entrepreneur or the management team has for the business idea and the extent 39) To test resource sufficiency, a firm should list the ________ most critical non-financial resources
that it will need to move its business idea forward and determine if those resources are available. C) 6 to 12 42) ________ is a quick financial assessment of the viability of a business idea. D) Financial feasibility analysis