ENT 2113 - Exam 1 Study Guide With
Complete Solutions
Fortune 500 - ANSWER List published annually by Fortune magazine listing the
500 largest corporations (by sales) in the United States
Economies of scale - ANSWER A condition that allows the long-run average cost
to continue downward as production increases
3 Critical Elements Entrepreneur's Must Solve: - ANSWER 1. An effective sales
generation model
2. Sustainable operating profit margins
3. Being properly financed
Stakeholders - ANSWER Individuals or other organizations that impact the
success of a business
Harvest plan - ANSWER A plan to exit the small business (this typically means to
sell the business to another firm or take it to an IPO).
What does the United States Small Business Administration do? - ANSWER -
Aids, counsels, and protect the interests of small businesses
- Provides information at all levels of organizational development for
entrepreneurial businesses
- Provides assistance at all levels of management for entrepreneurial businesses
What are the reasons for the success of entrepreneurial businesses? - ANSWER
- Fewer levels of management
- Tend to be more focused than large corporations
- Free to place energy into satisfying the needs of customers
Robber Barons - ANSWER Person who has become rich through ruthless and
unscrupulous businesses practices (originally with reference to prominent U.S.
businessmen in the late 19th century)
Glass ceiling - ANSWER Refers to the fact that women and minorities may be
hired by large firms but they experience limits based on their advancement
within the firm
What is Silicon Valley and Boston's 128 corridor known for? - ANSWER -
Generating new employment with entrepreneurial ventures
- Providing a basis to the area's economic vitality
, - Providing a growing tax revenue base
Organizational slack - ANSWER Excess resources in an organization; typically
found in large organizations rather than small businesses
Agency theory - ANSWER A managerial theory that argues that individuals act to
maximize their own benefit
Potential entrepreneurs need to consider... - ANSWER 1. Risk tolerance
2. Prior experience
3. Personality orientation
Break-even point - ANSWER The level where revenue coming into the firm is
sufficient to cover expenses
Bounded rationality - ANSWER Rational decision making that is constrained by
the background and history of the person making the decision
What are the typical triggers for starting a new business? - ANSWER 1. Being
laid off from established employment
2. Being approached by one or more people with a new business idea
3. Reaching a point financially where the risk-return level of a proposed new
business is tolerable
4. Having very little to lose financially
5. Receiving evidence that an idea is not only doable but that there is a concrete
way to address a given problem
6. Being spurred to action by attending a seminar, reading a book, or talking
with successful entrepreneurs
7. Experiencing a midlife crisis
8. Observing the establishment of an incubator, accelerator, or business
development effort within the community
9. Experiencing the inability to climb the corporate ladder due to circumstances
beyond a person's control
10. After graduating college, you may identify new opportunities that others
have not seen
What are support resources for entrepreneurs? - ANSWER 1. Family
2. Social networks
3. Community
4. Financial resources
Incubator - ANSWER Facilities that house new businesses, providing many
critical services for new businesses
Small Business Assistance Centers - ANSWER Centers funded by the Small
Business Administration that advise individuals wishing to start new businesses
Complete Solutions
Fortune 500 - ANSWER List published annually by Fortune magazine listing the
500 largest corporations (by sales) in the United States
Economies of scale - ANSWER A condition that allows the long-run average cost
to continue downward as production increases
3 Critical Elements Entrepreneur's Must Solve: - ANSWER 1. An effective sales
generation model
2. Sustainable operating profit margins
3. Being properly financed
Stakeholders - ANSWER Individuals or other organizations that impact the
success of a business
Harvest plan - ANSWER A plan to exit the small business (this typically means to
sell the business to another firm or take it to an IPO).
What does the United States Small Business Administration do? - ANSWER -
Aids, counsels, and protect the interests of small businesses
- Provides information at all levels of organizational development for
entrepreneurial businesses
- Provides assistance at all levels of management for entrepreneurial businesses
What are the reasons for the success of entrepreneurial businesses? - ANSWER
- Fewer levels of management
- Tend to be more focused than large corporations
- Free to place energy into satisfying the needs of customers
Robber Barons - ANSWER Person who has become rich through ruthless and
unscrupulous businesses practices (originally with reference to prominent U.S.
businessmen in the late 19th century)
Glass ceiling - ANSWER Refers to the fact that women and minorities may be
hired by large firms but they experience limits based on their advancement
within the firm
What is Silicon Valley and Boston's 128 corridor known for? - ANSWER -
Generating new employment with entrepreneurial ventures
- Providing a basis to the area's economic vitality
, - Providing a growing tax revenue base
Organizational slack - ANSWER Excess resources in an organization; typically
found in large organizations rather than small businesses
Agency theory - ANSWER A managerial theory that argues that individuals act to
maximize their own benefit
Potential entrepreneurs need to consider... - ANSWER 1. Risk tolerance
2. Prior experience
3. Personality orientation
Break-even point - ANSWER The level where revenue coming into the firm is
sufficient to cover expenses
Bounded rationality - ANSWER Rational decision making that is constrained by
the background and history of the person making the decision
What are the typical triggers for starting a new business? - ANSWER 1. Being
laid off from established employment
2. Being approached by one or more people with a new business idea
3. Reaching a point financially where the risk-return level of a proposed new
business is tolerable
4. Having very little to lose financially
5. Receiving evidence that an idea is not only doable but that there is a concrete
way to address a given problem
6. Being spurred to action by attending a seminar, reading a book, or talking
with successful entrepreneurs
7. Experiencing a midlife crisis
8. Observing the establishment of an incubator, accelerator, or business
development effort within the community
9. Experiencing the inability to climb the corporate ladder due to circumstances
beyond a person's control
10. After graduating college, you may identify new opportunities that others
have not seen
What are support resources for entrepreneurs? - ANSWER 1. Family
2. Social networks
3. Community
4. Financial resources
Incubator - ANSWER Facilities that house new businesses, providing many
critical services for new businesses
Small Business Assistance Centers - ANSWER Centers funded by the Small
Business Administration that advise individuals wishing to start new businesses
