New Venture Creation Test Preparation
Course Introduction
New Venture Creation explores the comprehensive process of identifying, evaluating, and pursuing entrepreneurial opportunities to launch a successful business. This course guides students step by step through opportunity recognition, market research, business model development, resource mobilization, and the preparation of business plans. Emphasizing practical application, it incorporates real-world case studies, guest lectures from entrepreneurs, and hands-on projects that simulate the challenges of creating a startup. By the end of the course, students gain a solid foundation in the entrepreneurial mindset, risk assessment, and the critical tools needed to transform innovative ideas into viable new ventures.
Recommended Textbook
Entrepreneurship Successfully Launching New Ventures 3rd Edition by Bruce R. Barringer
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15 Chapters
1125 Verified Questions
1125 Flashcards
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Chapter 1: Introduction to Entrepreneurship
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) The What Went Wrong? feature in Chapter 1 focuses on ProtectMyPhotos, a company that was launched in 2006 but eventually went out of business. According to the feature, the business failed primarily as a result of:
A) a loss of passion for the business idea
B) poor execution
C) a lack of tenacity on the part of the founders
D) a lack of funding
E) a lack of managerial expertise
Answer: A
Q2) Which of the following is not one of the five common myths about entrepreneurs?
A) Entrepreneurs are networkers.
B) Entrepreneurs are moderate risk takers.
C) Entrepreneurs should be young and energetic.
D) Entrepreneurs love the spotlight.
E) Entrepreneurs are born not made.
Answer: A
Q3) The most active age range for business ownership is 35 to 45 years old.
A)True
B)False
Answer: True
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Chapter 2: Recognizing Opportunities and Generating Ideas
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) Which of the following is correct regarding opportunities and ideas?
A) An opportunity and an idea are essentially the same thing.
B) An idea almost always meets the criteria of an opportunity.
C) An opportunity is a thought, an impression, or a notion.
D) An idea is a favorable set of circumstances that creates a need for a new product, service, or business.
E) It's important to discern whether a particular idea meets the tests of an opportunity.
Answer: E
Q2) Elaboration is the stage of the creative process when the solution to a problem is seen or an idea is born.
A)True
B)False
Answer: False
Q3) Strong-tie relationships are characterized by infrequent interaction and ties between casual acquaintances.
A)True
B)False
Answer: False
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Chapter 3: Feasibility Analysis
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) Which of the following factors is a negative as it pertains to the financial feasibility of a business venture?
A) steady and rapid growth in sales during the first five to seven years in a clearly defined market niche
B) high percentage of recurring revenuemeaning that once a firm wins a client, the client will provide recurring sources of revenue
C) inability to forecast income and expenses with a reasonable degree of accuracy
D) internally generated funds to finance and sustain growth
E) availability of an exit opportunity for investors to convert equity into cash
Answer: C
Q2) A buying intentions survey is used to gauge customer interest in a product or service.
A)True
B)False
Answer: True
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Chapter 4: Writing a Business Plan
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) The management team and company structure section of a business plan is one of the lesser read sections.
A)True
B)False
Q2) The ________ is a short overview of the entire business plan.
A) administrative review
B) executive summary
C) managerial review
D) founder's introduction
E) synopsis
Q3) A computer-generated image of an invention that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a:
A) virtual prototype
B) concept visualization
C) abstract prototype
D) virtual design
E) usability test
Q4) What are the two main reasons for writing a business plan.
Q5) What is a business plan?
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Chapter 5: Industry and Competitor Analysis
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75 Flashcards
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Sample Questions
Q1) The Savvy Entrepreneurial Firm feature in Chapter 5 focuses on Sony. Which of Porter's five forces made a dramatic difference in the way the founder's of Sony decided to view their markets in the early years of the company?
A) threat of new entrants
B) rivalry among existing firms
C) threat of substitutes
D) bargaining power of suppliers
E) bargaining power of buyers
Q2) What is an emerging industry? What is the primary opportunity available to entrepreneurial firms in emerging industries?
Q3) In the context of competitor analysis, businesses that offer identical or similar products are referred to as:
A) immediate competitors
B) direct competitors
C) indirect competitors
D) straight competitors
E) urgent competitors
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Chapter 6: Developing an Effective Business Model
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75 Flashcards
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Sample Questions
Q1) The process of adapting a company's core competencies to exploit new opportunities is referred to as resource conversion.
A)True
B)False
Q2) Which of the following statement is incorrect regarding the "core strategy" component of a firm's business model?
A) A firm's core strategy describes how it competes relative to its competitors.
B) The product a firm chooses has little impact on its core strategy and business model.
C) A company's product/market scope defines the products and markets on which it will compete.
D) From a broad perspective firms typically choose one of two generic strategies: cost leadership or differentiation.
E) The generic strategy a firm chooses greatly affects its business model.
Q3) A core competency is a resource or capability that serves as a source of a firm's competitive advantage over its rivals.
A)True
B)False
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8
Chapter 7: Preparing the Proper Ethical and Legal Foundation
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75 Flashcards
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Sample Questions
Q1) A ________ agreement binds an employee or another part to not disclose a company's trade secret. A ________ agreement prevents an individual from competing against a former employer for a specific period of time.
A) nondisclosure, noncompete
B) non breach-of-trust, nonchallenge
C) voluntary truth, nonparticipate
D) binding confidentiality, noncompete
E) ethics, nonparticipate
Q2) According to the textbook, the limited liability company combines the limited liability advantage of the ________ with the tax advantages of the ________.
A) partnership, sole proprietorship
B) corporation, sole proprietorship
C) corporation, partnership
D) sole proprietorship, corporation
E) partnership, corporation
Q3) A disadvantage of a sole proprietorship is that it is subject to double taxation.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Assessing a New Venture's Financial Strength and Viability
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75 Verified Questions
75 Flashcards
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Sample Questions
Q1) In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.
A) operating activities
B) investing activities
C) capital activities
D) financing activities
E) liquidity activities
Q2) ________ is the ability to earn a profit.
A) Liquidity
B) Profitability
C) Effectiveness
D) Stability
E) Efficiency
Q3) If a firm's debt-to-equity ratio gets to low, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.
A)True
B)False
Q4) Describe each of the four primary financial objectives of firms.
Q5) What is ratio analysis? Why is it important?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Building a New Venture Team
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75 Flashcards
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Sample Questions
Q1) More people are willing to serve on a company's board of directors than board of advisors.
A)True
B)False
Q2) Ned Kite is a four time business owner. One thing that has served Ned well throughout his entrepreneurial career is his ability to build and maintain relationships with people whose interests are similar or whose relationships could bring advantages to his new ventures. According to the textbook, Ned is a good:
A) networker
B) socializer
C) linker
D) assembler
E) connector
Q3) What is SCORE? What is its role in helping a firm fill out its new venture team?
Q4) Networking is building and maintaining relationships with people whose interests are similar or whose relationship could bring advantages to a firm.
A)True
B)False
Q5) What is a skills profile and what is it used for?
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Chapter 10: Getting Financing or Funding
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75 Flashcards
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Sample Questions
Q1) What is an elevator speech? How did it get its name?
Q2) 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 that motivate firms to seek funding or financing is illustrated in this example?
A) cash flow challenges
B) marketing costs
C) personnel costs
D) capital investments
E) lengthy product development cycles
Q3) Historically, commercial banks have not been viewed as a practical source of financing for startup firms.
A)True
B)False
Q4) The are three common sources of "personal" financing for a start-up firm: personal funds, friends and family, and bootstrapping.
A)True
B)False
Q5) Why do most firms need funding? Provide a brief explanation of each reason.
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Chapter 11: Unique Marketing Issues
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Sample Questions
Q1) A firm's "position" is concerned with how it is situated relative to its rivals.
A)True
B)False
Q2) Miss Misa, the company profiled in the opening feature in Chapter 11, sells jewelry.
Partly as a result of reading The Tipping Point by Malcolm Gladwell, Misa Chien, the company's founder, has transitioned the company's advertising from traditional techniques to:
A) YouTube
B) Google AdWords
C) Google AdSense
D) Facebook
E) television
Q3) What is a brand? How does a new firm develop a brand?
Q4) A firm's marketing mix is the assortment of products and services that it sells.
A)True
B)False
Q5) Describe the concept of guerrilla marketing. Why is guerrilla market particularly suitable for entrepreneurial firms?
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Chapter 12: The Importance of Intellectual Property
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Sample Questions
Q1) Amazon.com's one-click ordering system, Priceline.com's "name-your-price" business model and Netflix's method for allowing customers to set up a rental list of movies they want mailed to them are examples of:
A) copyright extension patents
B) utility patents
C) business process protection patents
D) trademark extension patents
E) business method patents
Q2) The What Went Wrong feature in Chapter 12 focuses on Dippin' Dots, a company that sells ice cream snacks. Dippin' Dot's lost the patent on its small beads of ice cream primarily because:
A) it failed to obtain permission from a patent holder that has "prior art" pertaining to the claims in its patent
B) it had sold its ice cream product one year prior to applying for a patent
C) it filed its patent application incorrectly
D) its patent infringes on the patent of a competitor
E) it failed to renew its patent on time
Q3) What is a copyright? What is protected by a copyright?
Q4) What is a trademark? Why are trademarks important?
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Chapter 13: Preparing for and Evaluating the Challenges of Growth
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Sample Questions
Q1) Jeremy Rhodes leases a manufacturing facility that produces computer keyboards. Jeremy tries to keep production high, because his lease payments are $6,200 a month, regardless of whether he produced one computer keyboard a month or 10,000. Jeremy's lease payment is a:
A) variable cost
B) secondary cost
C) fixed cost
D) marginal cost
E) tangible cost
Q2) The process of writing a business plan greatly assists in developing growth-related plans.
A)True
B)False
Q3) The main challenges for a business in the early growth stage are to make sure the initial product or service is right and to start laying the groundwork for building a larger organization.
A)True
B)False
Q4) What is the organizational life cycle and why is it important?
Page 15
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Chapter 14: Strategies for Firm Growth
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Sample Questions
Q1) The ________ is the company that owns the intellectual property. The ________ is the company purchasing the right to use it.
A) endorsee, endorser
B) licensor, licensee
C) licensor, endorsee
D) endorser, endorsee
E) licensee, licensor
Q2) The majority of entrepreneurial firms first enter foreign markets as exporters.
A)True
B)False
Q3) In the context of strategic alliances, ________ typically match a company with a distribution system with a company that has a product to sell to increase sales of a product or service.
A) promotion alliances
B) marketing alliances
C) organizational alliances
D) directional alliances
E) technological alliances
Q4) Describe what a joint venture is. Identify the two types of joint ventures.
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Chapter 15: Franchising
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Sample Questions
Q1) There are two primary advantages to buying a franchise over other forms of business ownership. First, franchising provides an entrepreneur the ability to own a business using tested and refined business methods, and second:
A) franchising is almost a sure way of making a profit
B) a franchise agreement is typically easy to exit if expectations aren't met
C) franchisors typically encourage creativity on the part of franchisees
D) the franchisor typically provides training, technical expertise, and other forms of support
E) franchise organizations are consistently more profitable than non- franchise organizations in the same industry
Q2) Which of the following statements is incorrect regarding franchising?
A) Franchising is growing in popularity in the U.S.
B) There are some instances in which franchising is not appropriate.
C) New technologies are often introduced through franchise systems.
D) Franchising, by its very nature, involves the sharing of knowledge between a franchisor and a franchisee.
E) The failure rate for franchise systems is relatively high.
Q3) List and explain three of the common misconceptions about franchising.
Q4) How can a person tell if franchising is right for them?
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