Question Details

MGT 101 Chapter 6--Managing Small Business Start-Ups PART 9

141.	The key problem, at the takeoffstage of growth, is how to grow rapidly and finance that growth. 
 
________________________________________
 
142.	List five of the six characteristics of entrepreneurs. 
 Autonomy, high energy level, need to achieve, tolerance for ambiguity, power and influence, and self-confidence

 

 

 

 
 
143.	Name three of the four ways entrepreneurs can become business owners. 
 
(1) Start from scratch, (2) buy an existing business, (3) start a franchise, and (4) participate in a business incubator.
 

 

 

 
 
144.	List the five stages of growth for an entrepreneurial company. 
 
Start-up, survival, success, takeoff, and resource maturity.
 

 

 

 
 
145.	Name and describe the five different categories of small business owners. 
 
The five categories are idealists, optimizers, sustainers, hard workers, and jugglers. Idealists like the idea of working on something that is new, creative, or personally meaningful, while optimizers are rewarded by the personal satisfaction of being a business owner. Balancing work and personal life and often not wanting the business to expand describes a sustainer. A hard worker is just the opposite of a sustainer. Hard workers enjoy putting in long hours and dedication to build a larger business with more profits. The last category, jugglers, includes high-energy people who thrive on the pressure of paying bills, meeting deadlines, and making payroll.

 

 

 

 
 
146.	What is tolerance for ambiguity? Why is it an important trait? 
 
Tolerance for ambiguity is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty. It is important for a small business owner because few situations present more uncertainty than starting a new business. Also, many decisions that new business starters have to make are made without clear understanding of options or certainty about which option will succeed.

 

 

 

 
 
147.	Name five of the ten characteristics of a successful business plan. 
 

 Students can name any five of the following characteristics: (1) demonstrate a clear, compelling vision that creates an air of excitement, (2) provide clear and realistic financial projections, (3) give detailed information about the target market, (4) include detailed information about the industry and competitors, (5) provide evidence of an effective entrepreneurial management team, (6) pay attention to good formatting and clear writing, (7) keep the plan short-no more than 50 pages, (8) highlight critical risks that may threaten business success, (9) spell out the sources and uses of start-up funds and operating funds, and (10) capture the reader's interest with a killer summary.

 

 

 
 
148.	Define a corporation and briefly discuss the primary advantages and disadvantages of forming a corporation. 
 

A corporation is a business form that is an artificial entity created by the state and existing apart from its owners. Two principal advantages are (1) the continuity of the business because it has a legal life of its own, and (2) the limits on the owners' liability. The major disadvantages of the corporation are (1) the cost and complexity of the paperwork required to incorporate the business, and (2) the cost and complexity of the records required by the law..

 

 

 
 
149.	What is the fundamental difference between the suppliers of debt and equity financing? 
 

 Suppliers of debt financing will have their money repaid to them, with interest added for the use of the money. Suppliers of equity financing provide funds that are invested into the company in exchange for ownership in the company. Debt financing creates a loan while equity financing creates ownership.


 

 

 
 
150.	What is a business incubator? How can it help a business? 
 
A business incubator is an innovation that provides shared office space, management support services, and management advice to entrepreneurs. It can help a business because by sharing office space with other entrepreneurs, managers share information about local business, financial aid, and market opportunities.

 

 

 

 
 
151.	List and briefly describe the stages of growth for an entrepreneurial company. 
 

 The first stage is the start-up stage. During this stage, the main problems are producing the product or service and obtaining customers. The survival stage is the second stage. The organization is producing the product/service and has customers. The key issue is financing the operation and its growth. During the success stage (stage 3), the company is solid and profitable. At this point, the entrepreneur can decide to decrease his or her involvement. The fourth stage is the takeoff stage. It is a pivotal period for the organization. The key issue is how to grow rapidly and finance that growth. Additionally, during this stage, the entrepreneur must learn to delegate. The final stage is the resource maturity stage. During this stage, the company has made significant financial gains, but is in the process of transitioning to a large organization.


Chapter 6--Managing Small Business Start-Ups Key


141. takeoff
 
142. Autonomy, high energy level, need to achieve, tolerance for ambiguity, power and influence, and self-confidence.
 
143. (1) Start from scratch, (2) buy an existing business, (3) start a franchise, and (4) participate in a business incubator.
 
144. Start-up, survival, success, takeoff, and resource maturity.
 
145. The five categories are idealists, optimizers, sustainers, hard workers, and jugglers. Idealists like the idea of working on something that is new, creative, or personally meaningful, while optimizers are rewarded by the personal satisfaction of being a business owner. Balancing work and personal life and often not wanting the business to expand describes a sustainer. A hard worker is just the opposite of a sustainer. Hard workers enjoy putting in long hours and dedication to build a larger business with more profits. The last category, jugglers, includes high-energy people who thrive on the pressure of paying bills, meeting deadlines, and making payroll.
 
146. Tolerance for ambiguity is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty. It is important for a small business owner because few situations present more uncertainty than starting a new business. Also, many decisions that new business starters have to make are made without clear understanding of options or certainty about which option will succeed.
 
147. Students can name any five of the following characteristics: (1) demonstrate a clear, compelling vision that creates an air of excitement, (2) provide clear and realistic financial projections, (3) give detailed information about the target market, (4) include detailed information about the industry and competitors, (5) provide evidence of an effective entrepreneurial management team, (6) pay attention to good formatting and clear writing, (7) keep the plan short-no more than 50 pages, (8) highlight critical risks that may threaten business success, (9) spell out the sources and uses of start-up funds and operating funds, and (10) capture the reader's interest with a killer summary.
 
148. A corporation is a business form that is an artificial entity created by the state and existing apart from its owners. Two principal advantages are (1) the continuity of the business because it has a legal life of its own, and (2) the limits on the owners' liability. The major disadvantages of the corporation are (1) the cost and complexity of the paperwork required to incorporate the business, and (2) the cost and complexity of the records required by the law.
 
149. Suppliers of debt financing will have their money repaid to them, with interest added for the use of the money. Suppliers of equity financing provide funds that are invested into the company in exchange for ownership in the company. Debt financing creates a loan while equity financing creates ownership.
 
150. A business incubator is an innovation that provides shared office space, management support services, and management advice to entrepreneurs. It can help a business because by sharing office space with other entrepreneurs, managers share information about local business, financial aid, and market opportunities.
 
151. The first stage is the start-up stage. During this stage, the main problems are producing the product or service and obtaining customers. The survival stage is the second stage. The organization is producing the product/service and has customers. The key issue is financing the operation and its growth. During the success stage (stage 3), the company is solid and profitable. At this point, the entrepreneur can decide to decrease his or her involvement. The fourth stage is the takeoff stage. It is a pivotal period for the organization. The key issue is how to grow rapidly and finance that growth. Additionally, during this stage, the entrepreneur must learn to delegate. The final stage is the resource maturity stage. During this stage, the company has made significant financial gains, but is in the process of transitioning to a large organization.