Chapter 6--Managing Small Business Start-UpsChapter 6--Managing Small Business Start-UpsStudent: ___________________________________________________________________________1.Approximately 600,000 new businesses are launched in the U.S. each year by entrepreneurs.TrueFalse2.The process of initiating a business venture, gathering and organizing the appropriate resources, and assuming the associated risks and rewards refers to entrepreneurship.TrueFalse3.Sole proprietorships are one of the fastest growing segment of small business.TrueFalse4.Entrepreneurs in the sustainer category are rewarded by the personal satisfaction of being business owners.TrueFalse5.Entrepreneurs in the sustainer category alike the chance to balance work and personal life and often don't want the business to grow too large.TrueFalse6.Entrepreneurs in the optimizer category are rewarded by the personal satisfaction of being business owners.TrueFalse7.Optimizers are rewarded by chance to work on something new and creative.TrueFalse8.During turbulent times, small business formation is the primary process by which an economy recreates and reinvents itself.TrueFalse9.China is the most entrepreneurial country, with 24 percent of individuals age 18 to 64 starting a new business.TrueFalse10.Small businesses, according to the Small Business Administration, employ more than 90 percent of the private workforce in the United States.TrueFalse11.Entrepreneurship and small business in the United States is an engine for job creation and innovation.TrueFalse12.Women and minorities who have found their opportunities limited in the corporate world are seeing intrapreneurship as the only way to go.TrueFalse13.Immigrants are more likely to start small businesses than native-born Americans.TrueFalse14.Minorities show a high rate of entrepreneurship in the United States, owning 5.8 million firms in 2007 that generated $1 trillion in revenues.TrueFalse15.Particularly in a turbulent environment, the three most important traits of successful entrepreneurs are realism, flexibility, and passion.TrueFalse16.The psychological characteristic that allows a person to be untroubled by disorder and uncertainty is called tolerance for ambiguity.TrueFalse17.A need to achieve is a psychological characteristic that means people are motivated to excell and pick situations in which success is likely.TrueFalse18.Entrepreneurs are able to deal easily with delays and exhibit high levels of patience, knowing that the results will be worth the wait.TrueFalse19.Social entrepreneurs have a primary goal of improving society rather than maximizing profits.TrueFalse20.Social entrepreneurs are leaders who are committed to both good business and ensuring high profitability.TrueFalse21.Social entrepreneurship combines the creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for the better.TrueFalse22.The first step in pursuing an entrepreneurial dream is to come up with a viable idea.TrueFalse23.The most common source of new business ideas comes from in-depth understanding of an industry or profession.TrueFalse24.A document specifying the business details prepared by an entrepreneur prior to opening a new business is known as a business plan.TrueFalse25.A business plan for a small business should be detailed, encompassing at least 100 pages.TrueFalse26.Since a corporation is a legal structure reserved for large firms, small businesses have two basic choices for legal structure of their company: proprietorship and partnership.TrueFalse27.A sole proprietorship an unincorporated business owned by two or more people.TrueFalse28.The drawbacks of proprietorship include unlimited liability and difficulty in obtaining financing.TrueFalse29.Two principle advantages of forming a corporation are continuity and limits on the owners' liability.TrueFalse30.Setting standards too high is a common pitfall for keeping a small business running successfully.TrueFalse31.The failure rate for high-tech business is lower than the failure rate for conventional businesses.TrueFalse32.Borrowing from family and friends is a common source of debt financing for a start-up business.TrueFalse33.The Small Business Administration (SBA) can provide loan financing for small business start-up.TrueFalse34.Equity financing is when funds are invested in exchange for ownership in the company.TrueFalse35.A venture capital firm is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.TrueFalse36.The advantage of buying an existing business is the ability to develop and design the business in the entrepreneur's own way.TrueFalse37.An attractive innovation for entrepreneurs who want to start a business from scratch is to join a business incubator.TrueFalse38.To succeed in the competitive online market, aspiring entrepreneurs need to identify a market niche that isn't being served by other companies.TrueFalse39.Entrepreneurs see themselves as being less in control of their environment, generally speaking, and can be expected to have an external locus of control.TrueFalse40.The first stage of growth for an entrepreneurial company is the investment stage.TrueFalse41.At the success stage, the company's substantial financial gains may come at the cost of losing its advantages of small size.TrueFalse42.At the success stage of growth, a companys substantial financial gains may come at the cost of losing its advantages of small size, including flexibility and the entrepreneurial spirit.TrueFalse43.At Stage 3 of growth for an entrepreneurial firm, managers often are hired to take over duties performed by the owner.TrueFalse44.The takeoff stage is the last of the five stages of growth for an entrepreneurial company.TrueFalse45.In the start-up stage of an entrepreneurial business, formal planning tends to be nonexistent except for the business plan.TrueFalse46.The owner should start implementing more structured control systems by Stage 3 of growth for an entrepreneurial firm.TrueFalse47.A domain name gives a company an address on the Web and a unique identity.TrueFalse48.Which of the following is the process of starting a business venture, organizing the resources, and taking the risks?A.IntrapreneurshipB.EntrepreneurshipC.Small business administrationD.Venture capitalE.Equity financing49.A(n) _____ is someone who recognizes a viable idea for a business product or service and carries it out.A.intrapreneurB.entrepreneurC.managerD.leaderE.introvert50.Being interested in computers, Jose Cohata came up with an idea of personalizing the screen saver programs with family pictures. After trying a couple of programs, Jose started marketing this service to neighbors and area businesses. Jose's activities can be described as a(n) _____.A.entrepreneurshipB.intrapreneurshipC.useless ideaD.large businessE.partnership51.An entrepreneur:A.assumes the risks of the business.B.reaps the rewards of the business.C.assumes the financial and legal risks of ownership.D.recognizes a viable idea for a business product or service and carries it out.E.all of these.52.Tracy's Trikes believes that each employee should enjoy the idea of working on something that is new, creative, or personally meaningful. Tracy's Trikes exemplifies which of the categories of small business owners?A.OptimizersB.IdealistsC.Hard workersD.SustainersE.Jugglers53.Connie, a single mother and home-business entrepreneur, enjoys running her own business. However, because she is busy balancing work and family, she does not foresee her home business growing significantly in the near future. Connie can best be described as what type of entrepreneur?A.IdealistB.SustainerC.OptimizerD.JugglerE.Hard worker54.If a small business owner enjoys the chance to balance work and personal life, he would be considered a(n) _____.A.idealistB.optimizerC.hard workerD.jugglerE.sustainer55.Which of the following are high-energy people who enjoy handling every detail of their own businesses?A.JugglersB.IdealistsC.SustainersD.OptimizersE.Hard workers56.Which of the following is the type of business that most entrepreneurs start?A.RetailB.ManufacturingC.ServiceD.All of theseE.Retail and manufacturing only57.Today, inspired by the growth of companies such as Amazon.com, entrepreneurs are flocking to the _____ to start new businesses.A.Small Business AdministrationB.InternetC.bookstoreD.mallE.Internal Revenue Service58.In 2012, which country had the largest percentage of individuals age 18 to 64 that were active in starting or managing a business?A.ChinaB.PeruC.ColumbiaD.AngolaE.Dominican Republic59.The Small Business Association (SBA) reports that small businesses create at least _____ percent of Americas new jobs.A.30B.32C.46D.64E.8260.Small businesses represent _____ percent of all firms and employ about half of all private sector employees.A.87B.22C.98D.54E.7261.Small firms that file for patents typically produce _____ more patents per employee than large patenting firms.A.twiceB.3 to 4 timesC.6 to 7 timesD.9 to 10 timesE.13 to 14 times62.What percentage of women entrepreneurs have employees?A.Five B.TenC.TwentyD.FiftyE.Eighty63.Which of the following demographic factors distinguish entrepreneurs from others?A.They are likely the youngest child in their family.B.Most entrepreneurs launch their businesses between the ages of 35 and 55.C.Their parents likely worked for large companies.D.They are likely the children of immigrants.E.All of these.64.In the United States, minorities own _____ firms.A.5.8 millionB.1.3 billionC.872,000D.8.9 millionE.2.9 million65.Celine has an unwavering belief in her new start-up company. She possesses intense focus and takes unconventional risks to make her new company successful. These examples most closely relate to which personality trait of entrepreneurs?A.Need to achieveB.PatienceC.Tolerance for ambiguityD.High energy levelE.Self-confidence66.Andrew, a young entrepreneur, feels sure about his ability to win customers through his people skills. He is comfortable with his ability to handle technical details and feels that he is able to keep his business moving. This most closely relates to which personality trait of entrepreneurs?A.Need to achieveB.ImpatienceC.Tolerance for ambiguityD.High energy levelE.Self-confidence67.Which of these means that people are motivated to excel and pick situations in which success is likely?A.External locus of controlB.Tolerance for AmbiguityC.Awareness of passing timeD.Internal locus of controlE.Need to achieve68.Ginger likes to set her own goals, which have an intermediate level of difficulty. Which of the entrepreneurial characteristics does she probably possess?A.A high need for achievementB.A high need for powerC.An external locus of controlD.An inability to deal with uncertaintyE.Intolerance for ambiguity69.Melissa is a very good middle manager. However, she has long wanted to open her own business. Which of Melissa's characteristics is not consistent with entrepreneurship?A.Melissa has high self-confidence.B.Melissa tends to put things off till later.C.She is untroubled by uncertainty.D.She has a high energy level.E.She has high need to achieve.70.Which of the following is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty?A.Tolerance for ambiguityB.External locus of controlC.Need to achieveD.Awareness of passing timeE.Internal locus of control71.Social entrepreneurs are committed to both good business and:A.swaying political opinion of consumers.B.improving the natural environment.C.positive social change.D.non-profit goals.E.big profits.72.What is the primary goal of the social entrepreneur?A.Maximizing profitsB.Improving societyC.Reaching social circlesD.Finding fundingE.Writing grants73._____ combines creativity, business smarts, passion, and hard work of the traditional entrepreneur with a mission to change the world for better.A.Contemporary entrepreneurshipB.Traditional entrepreneurshipC.Modern-day entrepreneurshipD.Social entrepreneurshipE.Conventional entrepreneurship74.One of the first characteristics or points of a successful business plan is:A.a profile of potential customers and market needs.B.demonstrate a clear, compelling vision that creates an air of excitement.C.the key ingredient of the business that will attract million of customers.D.the entrepreneur's background and role in the company.E.essential information about funding received so far.75.Which of the following is the most cited source of new business ideas?A.BrainstormingB.In-depth understanding of industry/professionC.A hobbyD.Copying someone elseE.None of these76.Before opening his own business, Kareem was writing a report that details the specifics of his ideas and future business operations. This document is known as a:A.SWOT analysis.B.business portfolio.C.business plan.D.competitive analysis.E.mission statement.77.The most common reason for becoming an entrepreneur is:A.joining the family business.B.to control ones future.C.to be ones own boss.D.to fulfill a dream.E.the result of being laid off.78.Which of these refers to an unincorporated business owned by an individual for profit?A.PartnershipB.Sole proprietorshipC.CorporationD.AssociationE.Trade alliance79.Which of the following is NOT an appropriate legal structure for an entrepreneurial company?A.ProprietorshipB.CorporationC.PartnershipD.Trade allianceE.All of these are appropriate legal structures for an entrepreneurial company.80.Which of the following is a popular small business form because it is easy to start and has few legal requirements?A.A partnershipB.A proprietorshipC.A corporationD.An associationE.A trade alliance81.Vaughn Hager started his one-man consulting business under the name Hager Associates. The legal structure for the company can best be described as a(n):A.proprietorship.B.partnership.C.trade alliance.D.corporation.E.one man operation.82.A(n) _____ has a legal life of its own.A.partnershipB.proprietorshipC.corporationD.associationE.trade alliance83.The drawback(s) of proprietorship include:A.the unlimited liability of the partners.B.conflicts with partners.C.existence regardless of whether the owners live or dies.D.difficulty in obtaining financing.E.complexity and cost.84.Blake, Madison and Sean started selling computer software on college campuses under the name Student Software Company. Each person contributed $1500 toward start-up costs and agreed on dividing costs and profits equally. The legal structure for the company can best be described as:A.a proprietorship.B.a partnership.C.a trade alliance.D.a corporation.E.none of these.85.Which of the following is an unincorporated business owned by two or more?A.A partnershipB.A proprietorshipC.A corporationD.An associationE.A trade alliance86.An artificial entity created by the state and existing apart from its owners is known as:A.a partnership.B.a proprietorship.C.a corporation.D.an association.E.a trade alliance.87.What are the two principal advantages of forming a corporation?A.Unlimited liability and potential conflicts with partnersB.Freedom from debt and relatively simple structureC.Continuity and limits on owner's liabilityD.Unlimited liability and continuityE.Continuity and non-tax structure88.All of the following are common reasons why small business ventures fail except:A.sloppy accounting.B.naive hiring.C.lack of controls.D.long-term focus.E.unrealistic focus.89.What is the most common way that entrepreneurs finance the start-up of a new business?A.Self-financing from savings or credit cardsB.Loans from friends, family, or business associatesC.Bank loansD.Lines of creditE.Venture capital90._____ refers to borrowing money that has to be repaid in order to start a business.A.Venture capitalB.Debt financingC.Equity financingD.FranchisingE.Licensing91.A group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits is known as:A.an equity financing firm.B.franchising.C.a venture capital firm.D.a corporation.E.a trade alliance.92.A venture capital firm wants to invest in businesses with a high rate of return. In return, they will:A.invest large amounts of money.B.provide necessary assistance and advice.C.provide information to help the entrepreneur prosper.D.all of these.E.provide necessary assistance and advice and provide information to help the entrepreneur prosper only.93.Which of these refers to the financing that consists of funds that are invested in exchange for ownership in the company?A.Venture-debtB.Debt financingC.Equity financingD.FranchisingE.Licensing94.Wendy enjoys making crafts and giving these away as gifts to friends and family. One day, she decided to quit her job and make crafts full-time, selling them on her new company Web site. Which tactic of becoming a business owner did Wendy use?A.Equity financingB.New business start-upC.Buying an existing businessD.Buying a franchiseE.Merger and acquisition95.Which of these offers the advantage that the entrepreneur has the ability to develop and design the business in the entrepreneur's own way?A.Participate in a business incubatorB.Start a new businessC.Buy a franchiseD.Buy an existing businessE.All of these96.An advantage of which of these tactics is that there is a shorter start-up time and an existing track record?A.Participate in a business incubatorB.Start a new businessC.Buy a franchiseD.Buy an existing businessE.Debt financing97._____ refers to an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.A.FranchisingB.Business incubationC.Spinning-offD.GlobalizationE.Right offerings98._____ was one of the top 10 fastest-growing franchises in 2011.A.Arby'sB.Krispy KremeC.SubwayD.Wendy'sE.Dairy Queen99.Which of these is true about the business incubator?A.It gives up control since every business is run the same way.B.It provides shared office space, management support services, and management advice.C.It develops an international business.D.It provides an established name and advertising.E.All of these.100.The majority of the incubators are operated by:A.large corporations.B.non-profit organizations.C.small businesses.D.international businesses.E.college drop-outs.101.Entrepreneurs who aspire to start online businesses implement all the following steps except:A.create a professional Web site.B.choose a domain name.C.build online relationshipsD.determine physical location.E.identify a profitable market niche.102.Max is the Web site manager for a local florist. The companys owner would like Max to redesign the Web site so that customers can connect directly with florist employees on a daily basis about products and specials. This relates to which step in establishing an online business?A.Finding a niche marketB.Creating a professional Web siteC.Choosing a target marketD.Choosing a domain nameE.Building online relationships103.Managers must tailor their planning, organizing, leading, and controlling to fit:A.the current stage of growth.B.financial needs.C.inventory levels.D.the number of orders to be filled.E.their comfort level.104.Marion is an entrepreneur. At this stage of his company's growth, his main concerns are do we have enough customers and money. What stage of growth is Marion's company in?A.Start-upB.SurvivalC.TakeoffD.Resource maturityE.Success105.All of these are entrepreneurial characteristics except:A.self-confidence.B.tolerance for ambiguity.C.external locus of control.D.high energy level.E.awareness of passing time.106.Samuel Rohrer is providing consumers with a new, unique business. The stage of the growth where his business has demonstrated that it is a workable business entity is considered the:A.start-up stage.B.survival stage.C.success stage.D.takeoff stage.E.resource maturity stage.107.At which stage of growth is the company if it is solidly based and profitable?A.Resource maturityB.TakeoffC.SurvivalD.SuccessE.Existence108.Janelle is very innovative and attentive to detail. As she starts her own company, she leads her employees and ensures that every detail is attended to. As her company grows, she finds it more difficult to deal with and motivate her employees. She is more interested in the product. What stage of growth is Janelle's company going through?A.Resource maturityB.TakeoffC.SurvivalD.SuccessE.Existence109.Formal planning, such as a strategic plan, is usually instituted during which stage?A.Start-upB.SurvivalC.TakeoffD.SuccessE.Resource maturity110.During the _____ stage, the company will need to make greater use of budgets, standard cost systems, and statistical reports.A.existenceB.survivalC.takeoffD.successE.maturity111.The key problem, at the _____ stage of growth, is how to grow rapidly and finance that growth.A.existenceB.survivalC.takeoffD.resource maturityE.success112.ABC company has made substantial financial gains, but may start to lose the advantages of small size. Which stage of growth is this company experiencing?A.Resource maturityB.TakeoffC.SurvivalD.SuccessE.Existence113.The Swingset Company is at the stage where if financing is available and it is properly managed, rapid growth can occur. What stage is the Swingset Company experiencing?A.Resource maturityB.TakeoffC.SurvivalD.SuccessE.Start-up114.During the latter stages of entrepreneurial growth, the manager:A.must learn to delegate and decentralize authority.B.must institute greater use of rules and procedures.C.must hire sufficient management to handle the growth.D.all of these.E.none of these.115.Dawn, the finance manager of a sporting goods manufacturing company, uses accounting records to track monthly operational budgets to ensure that the companys financial targets are being met. This is an important task in which stage of the managerial process?A.DelegatingB.PlanningC.ControllingD.Leading E.Organizing116.Jamila is a successful artist and entrepreneur who makes all of her work out of recycled goods because she believes in sustainability. She can be described as a social entrepreneur that is committed to: A.international human rights.B.environmental protection.C.childrens rights.D.industrial protectionism.E.consumerism.117.Scenario - Holly and TrentWhile many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing. With the entrepreneurial personality, Holly can be expected to have all of the following traits except:a.internal locus of control.b.tolerance for ambiguity.c.high need to achieve.d.patience.e.all of these.118.Scenario - Holly and TrentWhile many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing. After fully developing their new business idea, Holly and Trent recognize the need to develop a business plan. Typical business plans will include all of the following, except:a.mission or vision of the company.b.information about the suppliers.c.policy for extending credit to customers.d.analysis of critical risks that threaten success.e.all of these should be included.119.Scenario - Holly and TrentWhile many others dreamed about owning their own business, Holly Gabrel decided to do something about it. Holly knew that being self-employed required long hours and hard work, but with the help of her husband, Trent, Holly was positive that the hours and the work would be rewarded. First, she and Trent developed a new concept in sunglasses that could be used by athletes better than the sunglasses now on the market. Holly and Trent obtained a patent on their invention, and began production and marketing. If the business is legally Holly's, then the business form would be:a.proprietorship.b.partnership.c.corporation.d.chapter S42.5.e.none of these.120.Entrepreneurs in the _____ category like the idea of working on something that is new, creative, or personally meaningful.________________________________________121.The process of initiating a business venture, organizing it, and assuming its risks is known as _____.________________________________________122.A(n) _____ recognizes a viable idea for a business product or service and carries it out.________________________________________123.Entrepreneurship and small business in the United States is an engine for _____ and _____.________________________________________124.In the next decade, _____ and _____ businesses could end up being the emerging growth companies.________________________________________125.A human quality linked to entrepreneurship in which people are motivated to excel and pick situations in which success is likely is called the _____.________________________________________126._____ is the psychological characteristic that allows a person to be untroubled by disorder and uncertainty.________________________________________127._____ entrepreneurs are committed to both good business and changing the world for the better.________________________________________128.A(n)_____ is a document specifying the business details prepared by an entrepreneur in preparation for opening a new business.________________________________________129.An unincorporated business owned by an individual for profit is known as a(n) _____.________________________________________130.A(n) _____ is an unincorporated business owned by two or more people.________________________________________131.A(n) _____ is an artificial entity created by the state and existing apart from its owners.________________________________________132.Borrowing money that has to be repaid at a later date in order to start a business is _____.________________________________________133._____ financing consists of funds that are invested in exchange for ownership in the company.________________________________________134.A(n) _____ is a group of companies or individuals that invests money in new or expanding businesses for ownership and potential profits.________________________________________135._____ firms are groups of companies or individuals that invest money in exchange for a stake in the company.________________________________________136.By _____, an entrepreneur has the advantage to develop and design the business in his/her own way.________________________________________137._____ is an arrangement by which the owner of a product or service allows others to purchase the right to distribute the product or service with help from the owner.________________________________________138.The _____ provides shared office space, management support services, and management advice to entrepreneurs.________________________________________139.The majority of the incubators are operated by _____.________________________________________140.In the _____ stage, the main problems for entrepreneurial firms are producing the product or service and obtaining customers.________________________________________141.The key problem, at the _____ stage of growth, is how to grow rapidly and finance that growth.________________________________________142.List five of the six characteristics of entrepreneurs.143.Name three of the four ways entrepreneurs can become business owners.144.List the five stages of growth for an entrepreneurial company.145.Name and describe the five different categories of small business owners.146.What is tolerance for ambiguity? Why is it an important trait?147.Name five of the ten characteristics of a successful business plan.148.Define a corporation and briefly discuss the primary advantages and disadvantages of forming a corporation.149.What is the fundamental difference between the suppliers of debt and equity financing?150.What is a business incubator? How can it help a business?151.List and briefly describe the stages of growth for an entrepreneurial company.Chapter 6--Managing Small Business Start-Ups Key1.TRUE2.TRUE3.TRUE4.FALSE5.TRUE6.TRUE7.FALSE8.TRUE9.TRUE10.FALSE11.TRUE12.FALSE13.TRUE14.TRUE15.TRUE16.TRUE17.TRUE18.FALSE19.TRUE20.FALSE21.TRUE22.TRUE23.TRUE24.TRUE25.FALSE26.FALSE27.FALSE28.TRUE29.TRUE30.FALSE31.FALSE32.TRUE33.TRUE34.TRUE35.TRUE36.FALSE37.TRUE38.TRUE39.FALSE40.FALSE41.FALSE42.FALSE43.TRUE44.FALSE45.TRUE46.TRUE47.TRUE48.B49.B50.A51.E52.B53.B54.E55.A56.D57.B58.A59.D60.C61.E62.C63.D64.A65.D66.E67.E68.A69.B70.A71.C72.B73.D74.B75.B76.C77.A78.B79.D80.B81.A82.C83.D84.B85.A86.C87.C88.D89.A90.B91.C92.D93.C94.B95.B96.D97.A98.C99.B100.B101.D102.E103.A104.A105.C106.B107.D108.D109.D110.C111.C112.A113.B114.D115.C116.B117.d118.e119.a120.idealist121.entrepreneurship122.entrepreneur123.job creation; innovation124.women-owned; minority-owned125.need to achieve126.Tolerance for ambiguity127.Social128.business plan129.sole proprietorship130.partnership131.corporation132.debt financing133.Equity134.venture capital firm135.Venture capitalist136.starting a business137.Franchising138.business incubator139.non-profit organizations140.start-up141.takeoff142.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.