Future of Business Canadian 5th Edition by

Althouse ISBN 017657025X 9780176570255

Download solution manual at:
https://testbankpack.com/p/solution-manual-for-future-of-business-canadian-5th-edition-by-
althouse-isbn-017657025x-9780176570255/

Download full test bank at :

https://testbankpack.com/p/test-bank-for-future-of-business-canadian-5th-edition-by-althouse-isbn-
017657025x-9780176570255/

CHAPTER 6 ENTREPRENEURSHIP AND SMALL BUSINESS

MULTICHOICE

1. Which of the following terms would be used to identify the person who takes the risk of
starting and managing a business to make a profit?

(A) entrepreneur

(B) franchiser

(C) venture capitalist

(D) capitalistic adventurer

Answer : (A)

2. According to the text, which of the following best describes some of the personality traits
of an entrepreneur?

(A) creativity and financial skill

(B) energy and optimism

(C) vision and drive

(D) people skills and determination

Answer : (C)

3. Marc Adler is the owner of Macquarium, a multimillion-dollar communications company

that does everything from video productions to creating websites to public relations
campaigns. Adler began this company when he could not find anyone in Hollywood who was
willing to let him get into the movie making business. Adler is an example of which of the
following?

(A) venture capitalist

(B) entrepreneur

(C) franchiser

(D) capitalistic adventurer

Answer : (B)

4. David Dworkin is the founder and owner of Swoozie's, a chain of stores that carry diverse
lines of wrapping paper, stationery, invitations, and gifts for affluent women. He opened the
business with his own money and that of investors who saw profit potential in his idea.
Dworkin is an example of which of the following?

(A) franchisor

(B) venture capitalist

(C) franchisee

(D) entrepreneur

Answer : (D)

5. Which of the following best describes the activity of an entrepreneur?

(A) financing the business

(B) locating the business

(C) managing the business

(D) owning and operating the business

Answer : (D)

6. What is the difference between the small business owner and the entrepreneur?

(A) The entrepreneur is responsible for the profits of the business.

(B) The entrepreneur assumes the risk of the business.

(C) The entrepreneur files taxes for the business.

(D) The entrepreneur manages the business.

Answer : (B)

7. What is the difference between the small business owner and the entrepreneur?

(A) The entrepreneur is an innovator.

(B) The entrepreneur is a delegator.

(C) The entrepreneur is a manager.

(D) The entrepreneur is an organizer.

Answer : (A)
8. What is the difference between small business owners and entrepreneurs?

(A) Small business owners started the business to pursue their idea for a new product or
service.

(B) Small business owners are risk takers.

(C) Small business owners are innovators.

(D) Small business owners accept the status quo and take a short-term view of the future.

Answer : (D)

9. What are the three types of entrepreneurs?

(A) classic, multipreneur, and intrapreneur

(B) traditional, multipreneur, and interpreneur

(C) classic, omnipreneur, and micropreneur

(D) traditional, dualpreneur, and intrapreneur

Answer : (A)

10. Pim Bouwman quit his lucrative job as a consultant to start a retail website that
specializes in marketing Dutch tulip bulbs. He finds it very satisfying and believes that it will
provide him with an adequate income. Bouwman is an example of which of type of
entrepreneur?

(A) classic

(B) opportunistic

(C) growth-oriented

(D) risk-aversive

Answer : (A)

11. In 1984, Suzanne Pogell wanted to learn to sail, but she could find no one to teach her.
She finally convinced someone to teach her to sail, and after mastering sailing, she started
an all-woman sailing school called Womanship. Pogell started small and plans to stay small.
Which type of entrepreneur is Pogell?

(A) a micropreneur

(B) an interpreneur
(C) an intrapreneur

(D) a multipreneur

Answer : (A)

12. Many classic entrepreneurs who start small and plan to keep their business small are
described as which of the following?

(A) intrapreneurs

(B) multipreneurs

(C) micropreneurs

(D) interpreneurs

Answer : (C)

13. David Dworkin is the founder and owner of Swoozie's, a chain of stores that carry
eclectic lines of wrapping paper, stationery, invitations, and gifts for affluent women. He is a
classic entrepreneur who envisions having stores across the United States and Canada.
Which of the following type of entrepreneurs best describes David?

(A) growth-oriented entrepreneur

(B) intrapreneur

(C) multipreneur

(D) interpreneur

Answer : (A)

14. Willa Dakin started a high-tech company that she expects to grow into a major
corporation within three years. Which of the following type of entrepreneurs best describes
Dakin?

(A) blossoming

(B) latent

(C) growth-oriented

(D) potential

Answer : (C)
15. Which of the following are entrepreneurs who start a series of companies?

(A) multiventurists

(B) multifaceted venturists

(C) multipreneurs

(D) intrapreneurs

Answer : (C)

16. Michael Bronner made a killing in the direct marketing business as the cofounder and
CEO of Bronner Slosberg Humphrey. His newest venture, Upromise Inc., enlists some of
America's largest corporations to help families pay for postsecondary education. The 40-
year-old Bronner will more than likely start at least one more new company before he
retires. What type of entrepreneur is Bonner?

(A) a multipreneur

(B) an intrapreneur

(C) a growth entrepreneur

(D) an interpreneur

Answer : (A)

17. Some entrepreneurs apply their creativity, vision, and risk taking within a large
corporation rather than starting a company of their own. They enjoy a high degree of
autonomy while receiving a regular salary and financial backing from their employer. What
type of entrepreneur are they?

(A) insourced entrepreneurs

(B) intrapreneurs

(C) multipreneurs

(D) corporate entrepreneurs

Answer : (B)

18. Gord Larose and his friend David Allan worked at Oracle, a giant company. They
dreamed up a scheme for renting software over the Internet. Instead of quitting their jobs,
they reported to work on Monday, explained their plan to their boss, and began working to
make their idea a reality. Larose and Allan are examples of which of the following type of
entrepreneur?
(A) growth-oriented entrepreneurs

(B) interpreneurs

(C) multipreneurs

(D) intrapreneurs

Answer : (D)

19. Lachlan Stuart is employed by International Paper, a company that values his vision and
creativity. To stay ahead in a very competitive industry, International Paper gives Stuart and
his division almost complete autonomy to develop innovative and effective communications.
Stuart is an example of which of the following type of entrepreneur?

(A) insourced entrepreneur

(B) multipreneur

(C) intrapreneur

(D) corporate entrepreneur

Answer : (C)

20. Which of the following best describes intrapreneurs?

(A) They have the characteristics of creativity and vision, but are not risk takers.

(B) They receive higher salaries and better employee benefits.

(C) They have a low degree of autonomy because they work for a large corporation.

(D) They run mini-companies within large corporations.

Answer : (D)

21. Which of the following is the most common motive for becoming an entrepreneur?

(A) challenge of building a business

(B) less risk because the entrepreneur is the boss

(C) financial dependence

(D) dissatisfaction with one's current job

Answer : (A)
22. Which of the following is a common motive for becoming an entrepreneur?

(A) wanting to be rich and powerful

(B) to impress friends and family

(C) control one's own destiny

(D) dissatisfaction with one's current job

Answer : (C)

23. Edie Lopez is opening a catering business because, as an entrepreneur, she will enjoy
which of the following?

(A) guaranteed profits

(B) being her own boss

(C) shorter work hours

(D) interest-free loans

Answer : (B)

24. Dakota Lynn Brown is opening a business in which she will sell educational materials to
parents who are home schooling their children. As an entrepreneur, Brown will enjoy which
of the following benefits?

(A) guaranteed profits

(B) shorter work hours

(C) personal satisfaction

(D) less stress

Answer : (C)

25. Michael Bronner made a killing in the direct marketing business as the cofounder and
CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing company. His
newest venture, Upromise Inc., enlists some of America's largest corporations to help
families pay for postsecondary education and is extremely successful. Bronner would likely
be described as which of the following?

(A) dependent

(B) not committed

(C) visionary

(D) cautious

Answer : (C)

26. Which of the following is a characteristic of the entrepreneurial personality?

(A) ambitious

(B) being a follower rather than a leader

(C) risk-aversive

(D) dependent on others

Answer : (A)

27. According to the text, which of the following is a characteristic of the entrepreneurial
personality?

(A) ambivalent

(B) inclusive

(C) talkative

(D) visionary

Answer : (D)

28. According to the text, which of the following is a characteristic of the entrepreneurial
personality?

(A) social

(B) inquisitive

(C) passionate

(D) detail oriented

Answer : (C)

29. Small business refers to which of the following?

(A) only the bottom 10 percent of all businesses

(B) the size and impact of a company in the industry

(C) companies with fewer than 30 employees

(D) firms with less than $100,000 in sales

Answer : (B)

30. Which of the following is a characteristic of small businesses?

(A) Small businesses pay very little tax.

(B) Small businesses are owned by an individual or small group.

(C) Small businesses are very influential in their industries.

(D) Small businesses can be based nationally.

Answer : (B)

31. According to Industry Canada, what percentage of all employer businesses are small
businesses?

(A) 98

(B) 92

(C) 80

(D) 77

Answer : (A)

32. According to Industry Canada small businesses employ what percentage of the
workforce?

(A) 33

(B) 40

(C) 48

(D) 61

Answer : (C)

33. Over half of small businesses in Canada are found in found industries. Which of the
following is NOT one of those four industries?
(A) construction

(B) manufacturing

(C) professional, scientific and technical services

(D) wholesale and retail trade

Answer : (B)

34. Why does small business thrive in Canada?

(A) the owners' ability to avoid outsourcing

(B) the owners' regular working hours

(C) our rapidly changing technology

(D) small businesses have lower costs to comply with regulations

Answer : (C)

35. What is one advantage of owning a small business?

(A) depending on other locations for assistance

(B) the ability to serve specialized markets

(C) having more financial resources

(D) the avoidance of taxes

Answer : (B)

36. What is one advantage of owning a small business?

(A) interest-free loans

(B) guaranteed profit

(C) flexibility

(D) no taxes

Answer : (C)

37. Jerome Matthews is opening a small computer repair shop. Like other small-business
owners, Matthews probably will experience which of the following?
(A) guaranteed profits

(B) short work hours

(C) burdensome government regulations

(D) interest-free loans

Answer : (C)

38. Which of the following is a disadvantage associated with the ownership of a small
business?

(A) easier fundraising

(B) unlimited management skill

(C) fewer government regulations

(D) extreme personal commitment

Answer : (D)

39. Which of the following is a disadvantage associated with the ownership of a small
business?

(A) harder to obtain financing

(B) difficult to hire good employees

(C) more laws to obey

(D) complex tax codes

Answer : (A)

40. What is one way for the owner of a small business to keep in touch with all areas of the
business?

(A) hire assistant managers to report to him

(B) work in each area one day a week

(C) do all the work himself and hire no employees.

(D) have a solid business plan

Answer : (B)
41. What is one way to ease the burden of managing a business?

(A) operate the business 20 hours a week

(B) hire outside consultants

(C) do all the work oneself and hire no employees

(D) keep minimal inventory on hand

Answer : (B)

42. Marc Adler is the owner of Macquarium, a multimillion-dollar communications company.

Macquarium has done work for several large companies. Even though these companies
could have prepared their videos and created their websites in-house, these tasks were
handled in which of the following ways?

(A) They were supplied outside normal channels.

(B) They were autonomous productions.

(C) They were allocated to a specialized firm.

(D) They were outsourced.

Answer : (D)

43. Which of the following represent international trade specialists who buy goods at a
discount from small businesses and resell them abroad?

(A) business trade unions

(B) domestic channel members

(C) commission house brokers

(D) export trading companies

Answer : (D)

44. How are export management companies characterized?

(A) They handle all aspects of exporting, for a percentage fee of the business.

(B) They form joint ventures with small exporting businesses.

(C) They work on flat fees per month.

(D) They do only consulting work.

Answer : (A)

45. What percentage of business start-ups are brand new organizations?

(A) 50

(B) 75

(C) 85

(D) 95

Answer : (B)

46. What is the first step in starting one's own business?

(A) to make a business plan

(B) to find an idea for a new product or service

(C) to determine where the funding will come from

(D) to do a self-assessment

Answer : (D)

47. About 80 percent of executives got their ideas for their businesses from working in
which of the following?

(A) another small business

(B) a part-time job

(C) a brand new start-up

(D) the same or a related industry

Answer : (D)

48. Once Keeler Monroe had decided he wanted to quit working as a tax preparer and go
into some kind of business for himself, he did a self-assessment. What will be his next step?

(A) to create a business plan

(B) to determine where the funding will come from

(C) to find the idea for his business

(D) to look for customers

Answer : (C)

49. According to the text, what is the best way to keep up with small-business trends?

(A) reading magazines

(B) going to conferences

(C) talking to other small business owners

(D) attending networking events

Answer : (A)

50. Mark Ghermizian had quit his job and was looking to start a small business so he could
be his own boss. When he read that people spend up to 15 minutes every day staring at a
bathroom stall door, he decided there was real advertising potential in toilet advertising.
Since he has his idea, what is Ghermizian's next step?

(A) to create a name for his business

(B) to get financing for his new business

(C) to choose a form of business organization

(D) to determine if he has the right personality to run a business

Answer : (C)

51. Which of the following is a formal written statement that describes in detail the idea for
a new business and how it will be carried out?

(A) a business plan

(B) a mission statement

(C) a vision

(D) a statement of purpose

Answer : (A)

52. Which of the following best describes a business plan?

(A) a first operating plan for a new business

(B) a focus on the product or service

(C) a document for the bankers

(D) a detailed description of the competition

Answer : (A)

53. Estes Kennedy has decided that he will open a used bookstore as a sole proprietorship.
His next step is to write which of the following before he applies for a business loan?

(A) a venture prospectus

(B) a business plan

(C) a business essay

(D) a market perspective

Answer : (B)

54. Which of the following is the most common use of business plans?

(A) to persuade lenders and investors to finance the venture

(B) to comply with the Ontario Securities Commission

(C) to persuade customers to buy the new product or service

(D) to use as a recruitment tool

Answer : (A)

55. Which of the following is a one-to-three page summary of the business plan?

(A) executive summary

(B) corporate summary

(C) shareholders summary

(D) directors summary

Answer : (A)

56. What should a small business owner do on a constant basis that will help identify
strengths and weaknesses and explore possible opportunities for expansion?
(A) have strategic meetings

(B) review the business plan

(C) do audits

(D) read industry magazines

Answer : (A)

57. Once the business plan is finished, what is the next step?

(A) to find financing for the business

(B) to locate customers

(C) to create a promotional campaign

(D) to choose a business format

Answer : (A)

58. Which of the following two forms of business financing describe borrowed funds and
ownership funds, respectively?

(A) debt; equity

(B) credit; leverage

(C) equity; debt

(D) equity; leverage

Answer : (A)

59. Which of the following forms of business requires less financing than the others?

(A) lifestyle

(B) manufacturing

(C) growth-oriented

(D) high tech

Answer : (A)

60. Those who provide equity financing to a firm usually get which of the following in
return?

(A) a fixed rate of return

(B) free products

(C) shares in the business

(D) leverage

Answer : (C)

61. Pim Bouwman quit his lucrative job as a consultant to start a retail website that
specializes in Dutch tulip bulbs. To fund his website, he borrowed money from his friends
and relatives. In other words, he used which type of financing?

(A) venture

(B) liquid

(C) debt

(D) equity

Answer : (C)

62. Seltzer Darrigan borrowed $25,000 from his bank to open an art gallery. Darrigan used
which type of financing?

(A) venture

(B) liquid

(C) debt

(D) equity

Answer : (C)

63. Jim Lightsey sold stock to investors in order to finance his company, which will run an
Internet auction for sports memorabilia. Lightsey used which type of financing?

(A) equity

(B) liquid

(C) venture

(D) debt
Answer : (A)

64. Which of the following are individual investors or groups of experienced investors who
provide funding for start-up businesses?

(A) angel investors

(B) equity entrepreneurs

(C) opportunity entrepreneurs

(D) entrepreneurial capitalists

Answer : (A)

65. Which of the following best describes angel investors?

(A) They provide funding for start-up businesses.

(B) They are bank loan officers who are responsible for funding start-up businesses.

(C) They are most interested in investing in businesses that are well established.

(D) They provide equity financing to a business by loaning the business money at a low
interest rate.

Answer : (A)

66. Somebody who specializes in financing small high-growth companies in return for an
ownership interest and a voice in management is referred to as which of the following?

(A) angel investor

(B) equity entrepreneur

(C) venture capitalist

(D) financier

Answer : (C)

67. Which of the following provides the start-up financing for the majority of new small
businesses?

(A) the local bank

(B) venture capitalists

(C) the business owner

(D) the Business Development Bank of Canada

Answer : (C)

68. Which of the following is the primary source of financing for all small business start-ups?

(A) the owner's personal savings

(B) supplier and customer credit

(C) banks

(D) the Business Development Bank of Canada

Answer : (A)

69. Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care
information. Early in the development of this high-growth company, Arnold attracted a
group of investors who provided him with which of the following type of financing?

(A) debt

(B) venture

(C) equity

(D) liquid

Answer : (C)

70. Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care
information. Early in the development of this high-growth company, Arnold and Bradford
attracted a group of investors who provided them with money needed to acquire other
Internet companies with similar missions. What is the investment group called?

(A) angel investors

(B) entrepreneurial capitalists

(C) equity entrepreneurs

(D) investment counsellors

Answer : (A)

71. Which of the following is financing obtained from investment companies that specialize
in financing small, high-growth companies and receive an ownership interest and a voice in
management in return for their money?

(A) equity financing

(B) entrepreneurial capital

(C) venture capital

(D) debt financing

Answer : (C)

72. Which of the following best describes venture capital?

(A) It includes all the money the owner of the business invests in his or her new enterprise.

(B) It is financing obtained from investment companies that specialize in financing small,
high-growth companies.

(C) It is another name for the principal that a business borrows from a bank.

(D) It is borrowed money invested in start-up businesses and provided by the Business
Development Bank of Canada.

Answer : (B)

73. When buying an existing business, the prospective buyer should ask questions about the
operation of the business. Which of the following would be an inappropriate question to ask?

(A) Why are you selling?

(B) Are there any problems with the business?

(C) Is the business operating at a profit?

(D) What are you going to do with the down payment?

Answer : (D)

74. In buying an existing business, the prospective buyer should ask questions about the
operation of the business. Which of the following would be the most appropriate question to
ask?

(A) How are you going to use the money you receive for the business?

(B) Are any of the employees creating problems?

(C) Who loaned you the initial investment?

(D) Are there any problems with the business?

Answer : (D)

75. Which of the following is at the core of most business failures?

(A) too much inventory

(B) poor cash flow

(C) low interest rate

(D) inadequate planning

Answer : (D)

76. Which of the following is NOT a common cause of most business failures?

(A) economic factors

(B) financial causes

(C) personnel problems

(D) owner's lack of experience

Answer : (C)

77. Which of the following is an agency of the federal government that offers both
managerial and financial assistance to small businesses?

(A) Business Development Bank of Canada

(B) Business Incubator Agency

(C) Business Welfare Administration

(D) Federal Aid Program

Answer : (A)

78. What does the Business Development Bank of Canada do?

(A) It provides direct loans for business start-ups.

(B) It provides on-site consulting.

(C) It helps people start and manage small businesses.

(D) It helps immigrants with Canadian business start-ups.

Answer : (C)

79. What does the Business Development Bank of Canada offer?

(A) the elimination of sales and employee taxation for the first three years of operation

(B) employee recruiting, hiring, and firing

(C) bank loans

(D) entrepreneurial ideas

Answer : (C)

80. According to the text, changes in demographics and society, technology advances, and
economic changes offer the best opportunities for which of the following?

(A) entrepreneurs

(B) not-for-profits

(C) educational institutions

(D) corporations

Answer : (A)

81. How are baby boomers expected to affect the economy in the future?

(A) They will have no noticeable effect.

(B) They will spend money to make their lives more comfortable.

(C) They will create a drag on the economy.

(D) They will spend less and contribute to an economic decline.

Answer : (B)

82. According to the text, if you want to start your own business, what is a good way to get
ideas about business types?

(A) Read magazines.

(B) Brainstorm with friends and family.

(C) Go to conferences.

(D) Watch Dragon's Den.

Answer : (B)

83. Which of the following best describes the profile of web-driven entrepreneurs?

(A) female with university education

(B) female with high school education

(C) male with high school education

(D) male with university education

Answer : (A)

84. Which of the following receives greater focus from web-driven entrepreneurs than from
traditional entrepreneurs?

(A) profit (B)

growth (C)

free time

(D) innovation

Answer : (B)

85. Which of the following describes the trend in entrepreneurship in recent years?

(A) The number of people starting businesses has remained the same.

(B) The number of people starting businesses has increased.

(C) The number of people starting businesses has slowed.

(D) The number of people starting businesses has decreased.

Answer : (D)

86. What is one of the main reasons the number of people starting businesses has
decreased?

(A) a desire for more security

(B) difficulty obtaining financing

(C) a desire to avoid the stress of business ownership

(D) a desire for corporate benefits such as extended health insurance, vacation, etc.

Answer : (B)

TRUEFALSE

87. An entrepreneur is the same as a small-business owner.

(A) True (B)

False

Answer : (B)

88. A person who organizes, operates, and assumes the risk of a business venture in the
hope of making a profit is called an entrepreneur.

(A) True (B)

False

Answer : (A)

89. Entrepreneurs start a business with the hope that they will be compensated with profits
for their investment of time, expertise, and money.

(A) True (B)

False

Answer : (A)

90. Entrepreneurs are less likely to accept the status quo and generally take a longer-term
view than small-business owners.

(A) True (B)

False

Answer : (A)

91. Multipreneurs are businesspeople who have tried a succession of entrepreneurial start-
ups without finding an area in which they could be successful.

(A) True (B)

False

Answer : (B)

92. Businesspeople who apply their creativity, vision, and passion within a business rather
than starting their own are called intrapreneurs.

(A) True (B)

False

Answer : (A)

93. The most common motivation cited by CEOs in the Fortune 500 for being an
entrepreneur is the challenge of building a business.

(A) True (B)

False

Answer : (A)

94. Entrepreneurs, as a general group, dislike risk taking.

(A) True (B)

False

Answer : (B)

95. A positive aspect of opening a small business is that it takes very little management skill
because it is small.

(A) True (B)

False

Answer : (B)

96. Entrepreneurs, as a general group, are visionaries.

(A) True

(B) False
Answer : (A)

97. Any company that has fewer than 15 employees is considered to be a small business-no
matter who or what owns the company.

(A) True (B)

False

Answer : (B)

98. Small businesses account for 90 percent of all employer businesses.

(A) True (B)

False

Answer : (B)

99. Small businesses are based locally and independently managed.

(A) True (B)

False

Answer : (A)

100. Retail stores are the most popular category of small businesses.

(A) True (B)

False

Answer : (B)

101. Two-thirds of all Canadians feel that small businesses are a negative influence on our
economy.

(A) True (B)

False

Answer : (B)

102. It is not advisable for small businesses to use the services of CPAs and lawyers because
most businesses are too small to afford the expense.

(A) True
(B) False

Answer : (B)

103. Many small businesses wishing to operate overseas use the services of export
management companies.

(A) True (B)

False

Answer : (A)

104. One way for the owner of a small business to keep in touch with all aspects of the
business is to have a solid business plan.

(A) True (B)

False

Answer : (A)

105. One way to ease some of the burden of managing a small business is to hire outside
consultants.

(A) True (B)

False

Answer : (A)

106. The first step in starting your own business is to do a self-assessment.

(A) True (B)

False

Answer : (A)

107. The most common use of a business plan is to persuade lenders and investors to
finance the venture.

(A) True (B)

False

Answer : (A)
108. A one- to three-page summary of the business plan is called the corporate summary.

(A) True (B)

False

Answer : (B)

109. The two sources for debt financing are angel investors and venture capitalists.

(A) True (B)

False

Answer : (B)

110. One of the most common reasons for business failures is lack of experience.

(A) True (B)

False

Answer : (A)

111. One of the most common reasons for business failures is poor marketing.

(A) True (B)

False

Answer : (B)

112. An advantage of a small manufacturer over a large manufacturer is the speed with
which new products can be introduced to the marketplace.

(A) True (B)

False

Answer : (A)

113. The Business Development Bank of Canada (BDC) assists small businesses by providing
advice in management and financial matters.

(A) True (B)

False

Answer : (A)
114. Direct Business Development Bank of Canada (BDC) loans are made from funds set
aside each year by Parliament.

(A) True (B)

False

Answer : (B)

115. Many of Canada's financial institutions offer advice on starting, operating, planning,
and selling a business.

(A) True (B)

False

Answer : (A)

116. Due to better advancement opportunities in Fortune 500 corporations, the number of
women entrepreneurs is diminishing.

(A) True (B)

False

Answer : (B)

117. One of the reasons women start their own companies is a frustration with their current
work environment.

(A) True (B)

False

Answer : (A)

118. One of the reasons that there has been a dramatic increase in the number of small
business start-ups is rapidly changing technology.

(A) True (B)

False

Answer : (A)

119. Most start-ups are in the high-technology sector.

(A) True
(B) False

Answer : (B)

120. Small businesses tend to have greater flexibility than large businesses.

(A) True (B)

False

Answer : (A)

121. Because large businesses are more efficient than small ones, they can keep total costs
down and make larger profits.

(A) True (B)

False

Answer : (B)

122. One of the biggest advantages that a small business has is a greater ability to serve
specialized markets.

(A) True (B)

False

Answer : (A)

123. The first step in starting your own business is the creation of a unique marketable idea.

(A) True (B)

False

Answer : (B)

ESSAY

124. List the three categories of entrepreneurs.

Graders Info :

classic entrepreneurs, intrapreneurs, and multipreneurs

125. What is the most common reason that an individual leaves a secure job to start his or
her own company?

Graders Info :

the challenge of building a business

126. List the four characteristics common to all small businesses.

Graders Info :

independently managed, owned by an individual or small group of investors, based locally,

and not a dominant company in the industry

127. What is the most popular type of small business?

Graders Info :

a service company

128. List reasons that small businesses thrive in Canada.

Graders Info :

(1) Independence and the opportunity for a better lifestyle come with owning a small
business. (2) Small business owners receive personal satisfaction from their work. (3)
Rapidly changing technology has made it easier for small businesses to compete with larger
ones. (4) There is a growing use of outsourcing. Many small business owners support larger
companies by providing outsourcing services. (5) Small businesses offer their owners the
best route to success. (6) Corporate restructuring and downsizing has forced many people
to look for new jobs and new careers.

129. Once you have decided to go into business for yourself, what are the three ways that
you can acquire the business?

Graders Info :

(1) Start from scratch, (2) buy an existing business, or (3) buy a franchise.

130. What is the first step in starting a new business?

Graders Info :

a self-assessment to determine whether you have the personal traits you need to succeed
and, if so, what type of business would be best for you

131. What is the most common use for a business plan?

Graders Info :

to persuade lenders and investors to finance the venture

132. What does the hopeful entrepreneur do once he or she has finished the business plan?

Graders Info :

locate financing

133. What are the two types of financing available to entrepreneurs?

Graders Info :

equity and debt financing

134. List three advantages that small businesses have over larger, more complex
companies.

Graders Info :

The text lists the following four: (1) greater flexibility, (2) more efficient operation, (3)
greater ability to service specialized markets, and (4) more personal service.

135. List the three most common causes for business failure.

Graders Info :

economic factors, financial causes, and lack of experience

136. List three disadvantages that small businesses experience compared to larger, more
complex companies.
Graders Info :

The text lists the following four: (1) limited managerial skills, (2) fundraising difficulties, (3)
burdensome government regulations, and (4) extreme personal commitment of the owner.

137. What are the two leading reasons that women start their own companies?

Graders Info :

the inspiration of the idea and frustration with their previous work environment