Chap006 - Chapter 06 - Small Business Entry: Paths to...

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Chapter 06 - Small Business Entry: Paths to Full-Time Entrepreneurship Chapter 06 Small Business Entry: Paths to Full-Time Entrepreneurship True / False Questions 1. (p. 142) There are only five ways to get into small business management. TRUE Difficulty: Easy 2. (p. 143) A buyout refers to starting a business from scratch. FALSE Difficulty: Medium 3. (p. 143) According to the Small Business Administration, 50 percent of new business start-ups survive at least four years. TRUE Difficulty: Hard 4. (p. 144) A key advantage of start-ups is that the business has no initial name recognition. FALSE Difficulty: Medium 5. (p. 145) Determining what the business is to be is the first step in creating a start-up business. TRUE Difficulty: Medium 6-1
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Chapter 06 - Small Business Entry: Paths to Full-Time Entrepreneurship 6. (p. 145) Ninety percent of all start-ups are based on ideas from prior work experience, hobbies and family businesses. FALSE Difficulty: Hard 7. (p. 147) Given that multiple individuals create conflict, starting the business with one founder is one of the top indicators of start-up success. FALSE Difficulty: Hard 8. (p. 147) It is an unfortunate fact that most new products and services fail to gain acceptance. TRUE Difficulty: Medium 9. (p. 147) Since one firm is so different than another, having experience and managing small firms does not help, but having industry experience and knowledge is a key indicator that brings success to the start-ups. FALSE Difficulty: Hard 10. (p. 148) The single greatest hurdle to a successful start-up is obtaining and maintaining sufficient cash to support both operations and growth. TRUE Difficulty: Medium 6-2
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Chapter 06 - Small Business Entry: Paths to Full-Time Entrepreneurship 11. (p. 148) One way that you can go about obtaining committed customers prior to start-up is to specifically go into competition with your employer. TRUE Difficulty: Medium 12. (p. 150) In the book, Good to Great, Jim Collins asserts that for a firm to move from merely "good" business to "great" business, they must first get the right product or service. FALSE Difficulty: Hard 13. (p. 151) One disadvantage of purchasing an existing business is that it requires more cash outlay than creating a start-up. FALSE Difficulty: Medium 14. (p. 153) Brokers advertise and facilitate the sale of business for a fee, usually a percentage of the ultimate selling price. TRUE Difficulty: Medium 15. (p. 153) Finding an appropriate business you'd like to buy is the hardest and the most important step in the process. FALSE Difficulty: Medium 6-3
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Chapter 06 - Small Business Entry: Paths to Full-Time Entrepreneurship 16. (p. 154) Due diligence is the process of investigating to determine the full and complete implications of buying a business. TRUE
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This note was uploaded on 11/21/2009 for the course MNGT 422X taught by Professor Godsey during the Spring '09 term at UNL.

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Chap006 - Chapter 06 - Small Business Entry: Paths to...

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