Title: Entrepreneurship
Course: Question Banks

Q: You are an entrepreneur in the process of purchasing a small business. You want your investment to be safe, so you need to select a business that can be classified as a small business so as to qualify for SBA financing and government contracts. Which of the following would qualify?
- An Independently Owned-and Operated farm business with $900,000 in average revenue over 3-years. (Incorrect.This small business exceeds the average revenue standard for an agriculture business.)
- A Not-For-Profit hospital with 1,200 employees. (Incorrect.Not-For-Profit small businesses do not qualify for SBA status.)
- A commercial bank with assets totalling $605M. (Incorrect.The total assets exceeds the size standard for financial institutions.)
- A For-Profit commercial bakery with 475 employees. (Correct.This small business satisfies the both size standard and the ownership structure to be eligible for SBA status.)
A: A For-Profit commercial bakery with 475 employees.

Q: A business classified as a Small Business is based on the “size standard” which:
- is based on the number of locations the business occupies. (Incorrect.Based on the NAICS classification, a business will not be measured by number of locations.)
- Is based on the size of the initial public offering (IPO). (Incorrect.Based on the NAICS classification, a business will not be measured by the size of the IPO.)
- Is based on the number of affiliates and subsidiaries of the business. (Incorrect.Based on the NAICS classification, a business will not be measured by the number of affiliates and subsidiaries of the business.)
- is based on either number of employees or annual revenue based on the industry. (Correct.Based on the NAICS classification, a business will be measured by either revenue or number of employees.)
A: is based on either number of employees or annual revenue based on the industry.

Q: A business must also meet the following criteria in order to be eligible for SBA and government contracting programs in addition to meeting the relevant numerical size standard EXCEPT:
- not be in a dominant market position nationally. (Incorrect.This is a valid criteria to determine if a business is eligible for SBA and government contracting programs.)
- be Independently Owned and Operated. (Incorrect.This is a valid criteria to determine if a business is eligible for SBA and government contracting programs.)
- be physically owned and operated in the U.S. (Incorrect.This is a valid criteria to determine if a business is eligible for SBA and government contracting programs.)
- be a public company. (Correct.This is not a valid criteria to determine if a business is eligible for SBA and government contracting programs.)
A: be a public company.

Q: 99% of all U.S. business is made up of:
- Multinational corporations. (Incorrect.Although these huge corporations generate huge revenues, they are not the largest segment of all U.S. businesses.)
- Not-For-Profit enterprises. (Incorrect.Not-For-Profit enterprises are not even close to representing this percentage of U.S. business.)
- Mom and Pop shops. (Incorrect.Most small businesses are not “Mom and Pop” shops these days.)
- Small business. (Correct.Small business accounts for 99% of all U.S. businesses and roughly half of the job creation and economic activity.)
A: Small business.

Q: The crucial role small business plays in the U.S. economy is demonstrated by the fact that small business is responsible for half of the Gross Domestic Product (GDP) and roughly half of:
- the corporate tax base. (Incorrect.Major U.S corporations generate the majority of business revenue and pay more in taxes.)
- all online sales. (Incorrect.Probably Amazon has a larger share of online sales than all small business combined.)
- employee enrichment programs. (Incorrect.These programs are typically sponsored by large businesses not small business.)
- all U.S. employees in the workforce. (Correct.Small business in the U.S employs 47.5% of all workers.)
A: all U.S. employees in the workforce.

Q: Small business provides THIS “multiplier” benefit to their local community:
- Small business dominates the market in the immediate area. (Incorrect.Small business is an important part of the local economy, but usually are not the dominant players in the market.)
- Small business are responsible for utilizing the most commercial real estate space . (Incorrect.The “multiplier” benefit has nothing to do with real estate occupancy.)
- Small business revenue grows at a faster rate than that of national companies. (Incorrect.Small business growth rates vary from business to business.)
- More of the dollars spent at a locally-owned small business stay in the community. (Correct.For every $100 spent at a locally-owned business, $68 stays in the community, while spending $100 at a national chain, only $43 stays in the community.)
A: More of the dollars spent at a locally-owned small business stay in the community.

Q: The term “entrepreneurial DNA” means:
- The chromosome structure of Jobs, Gates, and Bezos. (Incorrect. While these gentlemen are famous entrepreneurs, their individual DNA is not necessarily representative of all entrepreneurs.)
- Dynamic Natural Attitude. (Incorrect. This not the meaning of the acronym of DNA.)
- The need to delve beneath the surface. (Incorrect. This is not one of the characteristics or traits discussed by the author.)
- The characteristics and traits of an entrepreneur. (Correct. These are considered to be “inherent” in the entrepreneur's makeup.)
A: The characteristics and traits of an entrepreneur.

Q: The author states that this trait is missing from the Merriam Webster definition of an entrepreneur “one who organizes, manages, and assumes the risks of a business or enterprise”:
- Well-organized. (Incorrect. This is not the missing trait mentioned by the author.)
- Relentless. (Incorrect. This is not the missing trait mentioned by the author.)
- no fear of failure. (Incorrect. This is not the missing trait mentioned by the author.)
- initiative. (Correct. Entrepreneurs “take charge” and act on opportunity.)
A: initiative.

Q: Entrepreneurs share the following personality traits EXCEPT:
- Quick to act. (Incorrect. This is a common personality trait of an entrepreneur)
- Initiative. (Incorrect. This is a common personality trait of an entrepreneur)
- Takes “no” for a challenge. (Incorrect. This is a common personality trait of an entrepreneur)
- Team player. (Correct. Entrepreneurs are typically strong individuals who lead teams.)
A: Team player.

Q: According to the Harvard Business Review, the following are the 5 common traits of the successful entrepreneur EXCEPT:
- Ideas & Drive. (Incorrect. This is a common trait of successful entrepreneurs listed by Harvard Business Review.)
- Financial savvy. (Incorrect. This is a common trait of successful entrepreneurs listed by Harvard Business Review.)
- Entrepreneurial background. (Incorrect. This is a common trait of successful entrepreneurs listed by Harvard Business Review.)
- Attention to detail. (Correct. Attention to detail is not mentioned as a common trait.)
A: Attention to detail.

Q: Creativity, vision, and ________ are the elements without which there is not entrepreneurial venture according to the author.
- Self-promotion. (Incorrect. This may be helpful for success, but it is not a crucial ingredient for the entrepreneurial venture.)
- multiple investors. (Incorrect. This may be helpful for success, but it is not a crucial ingredient for the entrepreneurial venture.)
- an MBA. (Incorrect. This may be helpful for success, but it is not a crucial ingredient for the entrepreneurial venture.)
- an ability to identify opportunities. (Correct. This is a key characteristic of an entrepreneurial venture.)
A: an ability to identify opportunities.

Q: At the end of this section, the author provides links to self-assessments to help determine if an individual has what it takes to be an entrepreneur. He also refers to the “Miles Davis” test. Considering these, and the psychological and personal toll that entrepreneurs endure, would lead you to conclude that:
- anyone can be a successful entrepreneur. (Incorrect. Entrepreneurism seems to be an inherent talent that is not shared by a large number of people.)
- entrepreneurs and musicians are very much alike. (Incorrect. Entrepreneurism seems to be an inherent talent that is not shared by a large number of people.)
- entrepreneurs need self-help books. (Incorrect. Entrepreneurism seems to be an inherent talent that is not shared by a large number of people.)
- entrepreneurs are born, not made. (Correct. When considering all of the factors stated, one could conclude that there is a reason for the small percentage of working people who are entrepreneurs.)
A: entrepreneurs are born, not made.

Q: Entrepreneurs are grouped into these 4 categories by Abraham’s BOSI framework:
- Builder, Opportunist, Specialist, and Ingenious. (Incorrect. “Ingenius” is not one of the categories defined by Abraham.)
- Builder, Outcast, Specialist, and Innovator. (Incorrect. “Outcast” is not one of the categories defined by Abraham.)
- Builder, Opportunist, Self-satisfied, and Innovator. (Incorrect. “Self-satisfied” is not one of the categories defined by Abraham.)
- Builder, Opportunist, Specialist, and Innovator (Correct. These are the categories defined by Abraham that describe entrepreneurs.)
A: Builder, Opportunist, Specialist, and Innovator

Q: Attracting talent, investors, and ________ is typical of Builders.
- Media. (Incorrect. Builders are not natural attractors of Media.)
- Researchers. (Incorrect. Builders do not necessarily attract researchers.)
- Capital. (Incorrect. Although Builders need capital, they do not necessarily excel at attracting it.)
- customers. (Correct. This is a trait common to the Builder category.)
A: customers.

Q: The major shortcoming of the Specialist as an entrepreneur is:
- attracting talent. (Incorrect. Specialists have no issues with attracting talent.)
- Operations. (Incorrect. Specialists have no problem with operations.)
- financial savvy. (Incorrect. Specialists can be quite savvy, especially if their specialty is finance or accounting.)
- demand-generation. (Correct. Specialists have many strengths but selling is not one of them.)
A: demand-generation.

Q: Becoming an entrepreneur is attractive to many because it is not just a job, but a:
- Adventure. (Incorrect. This was actually a recruiting slogan for the U.S. Navy in years past.)
- regular paycheck. (Incorrect. An entrepreneur does not expect a regular paycheck, especially early in the venture.)
- Career. (Incorrect. An entrepreneur does not think in terms of a regular job in a regular career.)
- lifestyle. (Correct. A true entrepreneur is not just doing a job, but living a lifestyle.)
A: lifestyle.

Q: The gender pay gap refers to:
- Men are forced to work longer hours than women. (Incorrect. This is not an known issue and is definitely not what is referred to as the gender pay gap.)
- Women are more qualified than men for the same jobs. (Incorrect. This is not an known issue and is definitely not what is referred to as the gender pay gap.)
- Men receive their paychecks earlier in the month. (Incorrect.This is not an known issue and is definitely not what is referred to as the gender pay gap.)
- Women earn 20% less than men on average. (Correct. Salary inequality between men and women and minorities remains an issue of unfair labor practices and is a good reason, according to the author, for becoming an entrepreneur.)
A: Women earn 20% less than men on average.

Q: Careers choices, including becoming an entrepreneur, depends on:
- an individual’s education and degree attainment. (Incorrect. Many individuals go on to jobs and careers completely opposite of their education.)
- an individual having connections to the boss. (Incorrect. While networking is always a valuable tool, it is not why people choose careers.)
- an individual being in the right place at the right time. (Incorrect. While good luck is always helpful, it is not necessarily the reason people choose careers.)
- an individual’s values and priorities. (Correct. Matching individual values and priorities to a job or career is key to personal happiness and success.)
A: an individual’s values and priorities.

Q: Owning your own small business has this as the biggest advantage:
- The size of your bank account. (Incorrect. The size of your bank account will vary based on the success or failure of the venture.)
- The freedom to set your own work schedule. (Incorrect. The founder will probably work non-stop, but this is not the biggest advantage of owning your own business.)
- The freedom to choose the business location. (Incorrect. The founder probably has the say in where the business will be located, but this is not the biggest advantage of owning your own business.)
- the freedom to choose your business’s purpose and goals. (Correct. As the founder, it is up to you to make those decisions.)
A: the freedom to choose your business’s purpose and goals.

Q: Owning your own small business has the following disadvantages EXCEPT:
- No regular paycheck. (Incorrect. This is definitely one of the disadvantages of owning your own business because you are on your own.)
- No retirement plan. (Incorrect. This is definitely one of the disadvantages of owning your own business because you are on your own.)
- No perks. (Incorrect. This is definitely one of the disadvantages of owning your own business because you are on your own.)
- No boss to answer to. (Correct. Owning your own small business means that YOU are the boss.)
A: No boss to answer to.

Q: You are considering creating your own startup business and are weighing the advantages and disadvantages of doing so. According to the author, what would be your most important consideration before making the decision?
- Having a sound business plan. (Incorrect. According to the author, it takes more than a good plan to be a successful entrepreneur.)
- Having sound financial backing from several sources. (Incorrect. According to the author, it takes more than sound financial backing to be a successful entrepreneur.)
- Having an Ivy League M.B.A. (Incorrect. According to the author, it takes more than an advanced degree to be a successful entrepreneur.)
- Having what it takes both personally and professionally to deal with both the freedom and the responsibility of creating a business. (Correct. Becoming a successful entrepreneur takes talent, good ideas, and the grit to see things through.)
A: Having what it takes both personally and professionally to deal with both the freedom and the responsibility of creating a business.

Q: Carol Denbow is cited by the author in stating this as the primary reason for small business failure:
- Lack of dedication. (Incorrect.This is not one of the reasons stated by the author for small business failure.)
- Lack of marketing promotion. (Incorrect. This is not one of the reasons stated by the author for small business failure.)
- Lack of expertise. (Incorrect. This is not one of the reasons stated by the author for small business failure.)
- Lack of planning. (Correct. “Most people spend more time planning their vacations than they do their new businesses.”)
A: Lack of planning.

Q: Some small business ventures fail for the following reasons:
- Inability to raise funds, lack of or insufficient market demand, inability to manage growth, and insufficient management experience or product/services expertise. (Incorrect. Inability to raise funds is not on the author’s list of causes for small business failure.)
- Inability to execute on the business concept, incorrect market segmentation, inability to manage growth, and insufficient management experience or product/services expertise. (Incorrect. Incorrect market segmentation is not on the author’s list of causes for small business failure.)
- Inability to execute on the business concept, lack of or insufficient market demand, inability to manage growth, and lack of marketing savvy. (Incorrect. Lack of marketing savvy is not on the author’s list of causes for small business failure.)
- Inability to execute on the business concept, lack of or insufficient market demand, inability to manage growth, and insufficient management experience or product/services expertise. (Correct. All of these are causes of small business failure.)
A: Inability to execute on the business concept, lack of or insufficient market demand, inability to manage growth, and insufficient management experience or product/services expertise.

Q: The term “failing forward” refers to:
- Avoiding failure at all costs. (Incorrect. Entrepreneurs frequently gain valuable experience from prior failures.)
- Looking for opportunities tomorrow. (Incorrect. This makes no sense.)
- Fail sooner rather than later. (Incorrect. This is not what “failing forward” means.)
- Learning from mistakes. (Correct. One of the marks of a true entrepreneur is the ability to gain experience from failure and not be afraid of it.)
A: Learning from mistakes.

Q: When starting a business these are the fundamental questions that should be asked EXCEPT:
- Do you have what it takes? (Incorrect. This is one of the fundamental things to consider in deciding to start a business.)
- Do you have a viable concept? (Incorrect. This is one of the fundamental things to consider in deciding to start a business.)
- Is the reason you want to start a business consistent with your character and concept? (Incorrect. This is one of the fundamental things to consider in deciding to start a business.)
- Do you have the right education? (Correct. The fundamental questions revolve around having what it takes, having a viable concept, and having a reason to start a business that is consistent with those two questions.)
A: Do you have the right education?

Q: The most important quality a entrepreneur can have to start a business according to startup expert Anne Dwane is:
- consistency. (Incorrect. This is not the most important quality for an entrepreneur according to Anne Dwane.)
- flexibility. (Incorrect.This is not the most important quality for an entrepreneur according to Anne Dwane.)
- heart of gold. (Incorrect.This is not the most important quality for an entrepreneur according to Anne Dwane.)
- adaptability. (Correct. Adaptability is the most important quality for an entrepreneur according to Anne Dwane.)
A: adaptability.

Q: The daily stress of day-to-day business in a startup requires an entrepreneur to have these (have what it takes) to survive:
- Discipline and capital. (Incorrect. These are great things for any job or career, but not the essential ones to help the entrepreneur to handle the challenges of starting a business.)
- Expertise and experience. (Incorrect.These are great qualities for any job or career, but not the essential ones to help the entrepreneur to handle the challenges of starting a business.)
- Consultants and advisors. (Incorrect. These are great resources for any job or career, but not the essential ones to help the entrepreneur to handle the challenges of starting a business.)
- Motivation and passion. (Correct. Motivation and passion are necessary qualities for an entrepreneur to stand up to the rigors of day-to-day business.)
A: Motivation and passion.

Q: The first 3 steps to start a business according to the SBA are:
- conduct market research, write a business plan, and interview prospective employees. (Incorrect. Interviewing prospective employees would happen much later in the process.)
- conduct market research, create your web site, and fund your business. (Incorrect. Creating a web site would happen much later in the process.)
- create your business logo, conduct market research, and fund your business. (Incorrect. Creating your logo would happen much later in the process.)
- conduct market research, write a business plan, and fund your business. (Correct. These are the first 3 steps listed by the SBA.)
A: conduct market research, write a business plan, and fund your business.

Q: Which of these tasks would be among the last things to do on the SBA list of starting a business?
- Design signage and business cards. (Incorrect. These are not on the list.)
- Pick your business location. (Incorrect. This task would occur much earlier in the process.)
- Choose a business structure. (Incorrect. This task would occur much earlier in the process.)
- Open a bank account for your business. (Correct. This is the final step on the SBA’s list.)
A: Open a bank account for your business.

Q: Of the 10 steps listed by the SBA for starting a business, how many deal exclusively with government regulation?
- Two. (Incorrect. There are more than two steps dealing with government regulation.)
- One. (Incorrect. There is more than one step dealing with government regulation.)
- Four. (Incorrect. There are less than four steps dealing with government regulation.)
- Three. (Correct. Registering your business, obtaining federal and state tax ID’s, and applying for state licenses and permits are the three steps.)
A: Three.

Q: According to the SBA list of steps to do when starting a new business, market research is the first task. The two areas that should be the focus of that research are:
- Market and consumer. (Incorrect. Consumer research is not suggested at this stage.)
- Competitive and historical. (Incorrect. Historical research is not suggested.)
- Statistical and probable. (Incorrect. Neither of these are suggested by the SBA.)
- Market and competitive. (Correct. These are the two areas of research suggested by the SBA.)
A: Market and competitive.

Q: The following are affected by the business structure you choose when you start your business.
- day-to-day operations, personal liability, and business name. (Incorrect. Business name is not affected by your choice of business structure.)
- day-to-day operations, business location, and taxes. (Incorrect. Business location is not affected by your choice of business structure.)
- profitability, personal liability, and taxes (Incorrect. Profitability is not included in this process.)
- day-to-day operations, personal liability, and taxes. (Correct. These things are affected by your choice of business structure according to the author.)
A: day-to-day operations, personal liability, and taxes.

Q: Business registration requirements are based on business structure and location. When you register your business the following could be in play EXCEPT:
- entity name. (Incorrect. Entity name protects your business name at the state level.)
- domain name. (Incorrect. Domain name protects your web site.)
- trademark. (Incorrect. Trademark protects your company name at the federal level.)
- College degree. (Correct. This has nothing to do with registering your new business.)
A: College degree.

Q: According to the SBA, the following items are needed by Federal and State government in the Registration step in order to start your business:
- regulators, licenses, and permits. (Incorrect. Regulators are not required by Federal and State government.)
- permits, voting records, and tax ID’s. (Incorrect. Voting records are not required by Federal and State government.)
- permits, licenses, and next of kin. (Incorrect. Next of kin is not required by Federal and State government.)
- permits, licenses, and tax ID’s. (Correct. These are the 3 things required by the Federal and State government.)
A: permits, licenses, and tax ID’s.

Q: The SBA-recommended format for the business plan has this as the first section:
- Table of Contents. (Incorrect. This section is not included in the SBA’s recommended business plan.)
- Preface. (Incorrect. This section is not included in the SBA’s recommended business plan.)
- Forward. (Incorrect. This section is not included in the SBA’s recommended business plan.)
- Executive Summary. (Correct. The Executive Summary gives a brief outline of all of the important elements of the business plan.)
A: Executive Summary.

Q: The first three topics in Guy Kawasaki’s more V.C.-friendly business plan structure are:
- Executive Summary, Financial Analysis, and Appendix. (Incorrect. None of these are included as sections in Kawasaki’s version of a business plan.)
- Problem, Your Solution, and Call to Action. (Incorrect. These are sections from Kawasaki’s V.C. plan, but the Call to Action is the last section.)
- Marketing and Sales, Financial Projections, and Appendix. (Incorrect. None of these are included as sections in Kawasaki’s version of a business plan.)
- Problem, Your Solution, and Business Model. (Correct. These are the first three topics in Kawasaki’s V.C. business plan.)
A: Problem, Your Solution, and Business Model.

Q: How many sections are focused on solely financial factors in a nine-section SBA business plan?
- Zero. (Incorrect. There are sections in a business plan focused on solely financial factors.)
- Three. (Incorrect. There are less than three sections in a business plan focused on financial factors.)
- Four. (Incorrect. There are less than four sections in a business plan focused on financial factors.)
- Two. (Correct. The Funding Request and Financial Projections sections are solely focused on financial factors.)
A: Two.

Q: The structure of the business, the introduction of the team, and an organization chart would be described in this section of the business plan:
- Marketing and Sales. (Incorrect. This section is not appropriate for information about the people on the team.)
- Company Description. (Incorrect. This section is not appropriate for information about the people on the team.)
- Financial Projections. (Incorrect. This section is not appropriate for information about the people on the team.)
- Organization and Management. (Correct. Organization and Management is where this information would be described.)
A: Organization and Management.

Q: The following would be included in the Appendix section of a business plan EXCEPT:
- resumes of management personnel. (Incorrect. The appendix would contain management resumes.)
- patents and trademarks. (Incorrect. The appendix would contain patent and trademark information.)
- letters of reference. (Incorrect. The appendix would contain relevant letters of reference.)
- product or service descriptions. (Correct. This information would be included in the Service and Product area.)
A: product or service descriptions.

Q: The SBA recommends this for the first-year projections in the Financial Projections section:
- review by bank examiners. (Incorrect. Review by bank examiners would not be appropriate for most business plans.)
- Extreme optimism for the success of the business. (Incorrect. A business plan should be based on realistic and attainable financial projections.)
- advice from Warren Buffett. (Incorrect. Although it would be great to have Mr. Buffett involved, it is highly doubtful that he would help you with your business plan.)
- quarterly or monthly projections. (Correct. The recommendation is for more detailed projections to serve as a reality check during the first year of the business.)
A: quarterly or monthly projections.