Questions and Answers of Entrepreneurial Small Business

In terms of the five types of entrepreneurial personalities mentioned in the chapter, do any of them fit the description of the Memphis real estate tycoons?The one sure way to make money in Memphis,
Aside from compliance with the law, just how much additional responsibility does a business owner have to his or her customer base, employees, suppliers, and the community at large? How do you feel
Present an argument in favor of eliminating the new division, and make recommendations to improve overall company profits through means that will be socially and morally acceptable to Mr. Ash.Rick
Present an argument in favor of retaining the new division that considers and incorporates the ethical and moral conflicts that Mr. Ash is experiencing.Rick and Gloria Ash started a new business in
How would each brother make a contribution to the family, community, and economy if their efforts were successful?Derrick and Kevin Petersen, twin brothers from a small town outside of Chicago, will
Advise the brothers. Develop a strategic and tactical plan that best fits their goals and aspirations and that has the highest likelihood for success.Derrick and Kevin Petersen, twin brothers from a
Profile the brothers. Are they typical “small business”people or “entrepreneurs” or both? Is there really a difference?Derrick and Kevin Petersen, twin brothers from a small town outside of
One of the most common ways to evaluate firm success is by profitability. Use a financial database such as the Risk Management Association’s Annual Statement Studies to find out target
Make your list of your personal goals for the “yourself” assessment in the quadruple bottom line exercise. Compare this list to the major reasons people give for going into business (covered in
Look up businesses for sale in an industry of your choice (or the industry assigned you by your professor), at a site such as www.bizbuysell.com . What kind of information does the Web site provide
10. In assessing the four bottom lines, what is the difference between the goal and its metric? Why is each needed?
9. Why are separate bottom lines broken out for the family and the firm, rather than just including it in the “yourself”category?
8. What are the four bottom lines of small business?
Identify and compare three critical success factors for small businesses.
What are the key business characteristics needed for a successful walkaway?
From the entrepreneur’s perspective, what is the major reason for preferring a transfer of the business to a termination?
What is the difference between a transfer and a termination?
What are the stages of the small business life cycle? What stage do high-growth ventures go through that other forms of small business do not?
What are some of the differences between a lifestyle business and a high-performing small business?
What is the difference between a lifestyle business and a traditional small business?
Is there an entrepreneurial solution to dealing with both the chief marketing officer job offer and SkyBOX? Explain your reasoning.It was the summer of 2009 and Tim had to make a decision. He had
n terms of the business outcomes shown in Figure 20.3 , which outcomes is Tim’s firm facing at this point?It was the summer of 2009 and Tim had to make a decision. He had started with an idea of
Should Tim use the $500,000 raised to keep SkyBOX going until he can find other funding? Explain your reasoning.It was the summer of 2009 and Tim had to make a decision. He had started with an idea
13. As mentioned, one of the most common problems in a family business is the hiring of relatives who do not have talent to fulfill the necessary job responsibilities. What can you do if you are
12. As mentioned by Dr. David Gage, clinical psychologist, “Families don’t need written guidelines to operate, but family businesses do.” What are some initial guidelines that should be defined
11. Managing health care costs is one of the biggest concerns for small business owners; what are some creative ways that they can minimize some of these costs? In your own community, how have owners
10. Consider your previous employment position; did the firm have an open-book philosophy? How much information was shared regarding the strategy and financials of the business? What are the
9. What are creative ways that you can retain your first employee and ensure you are meeting his or her needs? Consider how you can meet or exceed the employee’s “psychological contract.”
8. What specific training guidelines would you incorporate into your business? What inexpensive techniques (on-the-job training) can you use after you make the first hire? Did the owner of the
7. As a new small business owner, what can you do to make sure you hire the right person for the job? This is probably one of the most difficult decisions you may be faced with making, especially
6. What are some of the different ways small business owners can write a job description for the first time? How can they ensure that they cover all the essential knowledge, skills, and abilities
5. What recommendations or suggestions would you give Paige Arnof-Fenn, founder and CEO of Mavens & Moguls, on how to manage and “orchestrate” her multiple virtual employees?
4. What are the multiple benefits of hiring virtual employees for your small business? What are some of the ways to manage and foster productivity among your virtual employees? Are there any
3. While a smaller firm can actually outperform large businesses in attracting high-quality employees, how can you communicate to the job market the multiple benefits of working within your firm? How
2. Whether you hire a part-time or full-time employee, in what ways can you ensure that each type of employee knows and values your company’s mission?
1. As a small business owner, you will most likely have the opportunity to hire either part-time or full-time employees. What do you need to consider in determining which one will be best for you and
3. Small business owner Jeff Birdsell opened Shauncey’s Gourmet Ice Cream, Inc., in Battlefield Shopping Center in Springfield, Missouri. Like any small business owner, Jeff Birdsell realized that
2. You have just been asked by a small business owner to uncover U.S. and state laws that are relevant to managing people(in the future, when the small business owner is interested in hiring). Go to
1. At ReCellular, Inc., a cellular phone remanufacturing company in Ann Arbor, Michigan, the small business owner put together a list of interview questions that immediately improved the hiring
4. Should Tim replace the third wave of programmers? If yes, how do you recommend he go about this doing this? Can you find a way for him to protect his share of the equity he has in the business?It
3. How could Tim have managed the third wave of employees if he had hired them right off the bat?It was 2006 and Vivid Sky’s sole product, SkyBOX, had survived its pilot test. Designed as an
2. What are the benefits and problems of using equity to compensate employees? What about using pay?It was 2006 and Vivid Sky’s sole product, SkyBOX, had survived its pilot test. Designed as an
1. What were the differences in the sources of employees for Vivid Sky as it developed?It was 2006 and Vivid Sky’s sole product, SkyBOX, had survived its pilot test. Designed as an in-stadium
3. If there is no infringement, but the injunction was brought to slow down a fast-moving new competitor, would it make any difference in the strategy Tim should employ?Entrepreneur Tim Hayden had
2. What do you think Tim means when he asks if there is an “entrepreneurial way to handle this”?Entrepreneur Tim Hayden had created a service called SkyBOX which could stream videos and
What are Tim’s choices at this point?Entrepreneur Tim Hayden had created a service called SkyBOX which could stream videos and statistics to sports fans over their 3G cell phones (like the iPhone).
4. Would you like more information on LLCs? Go to http://nolo.com , click on “business and human resources,” and then“Ownership Structures.”
3. You may be able to represent yourself on small matters by going to small claims court. These courts of limited jurisdiction have different names in different states. Go to http://business.gov ,
2. In most states you can contact the state bar, the state supreme court, or a state commission to check on whether a particular attorney has been disciplined for professional conduct violations.To
1. Find your state’s Secretary of State home page on the Internet.Find information on forming LLCs. Can the form(s) be submitted online? If not, can the form(s) be downloaded or filled in using the
6. What issues should be addressed in a company policy on e-mail?
5. How can you protect your company’s trade secrets?
4. How could you keep your employees from going to your competitors after you have trained them?
3. In what ways could the owner of a parking lot limit his or her potential liability?
2. Which form of business structure would be best for your new business and why?
1. How would you go about finding a lawyer for your business?
10. One of your partners has special skills that would be very difficult to replace. His great joy in life is single-track bicycle racing.How can you protect yourself from the probability that he
9. You are considering offering credit to good customers to increase sales. What things should you consider to limit your risks if you do?
8. Suppose you are in the business of making ladders. A customer places a board plank between two of your ladders as a scaffold. One of the ladders fails, causing your customer to fall and break a
7. What types of insurance should a small business have? Give your reasons for maintaining each type of coverage.
6. Which is easier to steal, money from an employer’s bank account or secret business processes? Why?
The text discusses methods to protect against weather.What might a business do to protect itself against an earthquake?
How does disaster planning help a small business cope with risk?
How are the risks from personnel affected by government business regulations?
What are the risks to small businesses caused by personnel issues?
Discuss the types of risk encountered by small businesses.Are these risks different in any way from risks facing big business?
Identify a business you want to own. Use the resources of your library and the Internet to identify what insurance you are legally required to carry. Contact an insurance broker to determine how and
Identify a specific location (street address) where you would like to operate a business. Visit your city’s planning and zoning office (or its Web site, if it has one) and determine if this site is
Suppose you are going to open a consulting business. You are going to finish half of your garage to use as an office.Go to the ADA site and determine what accessibility requirements you must meet.
Identify a business you would like to own. Go to the OSHA Web site and find out what rules and regulations apply to this business. Create a chart of hazards of this business and the applicable OSHA
Identify a business you would like to own. Make a list of the risks that are specific to that business. Contact an insurance broker to find out what coverages are available and what they would cost.
How should Vicky structure her business to minimize the potential loss she can suffer if a customer or bystander is injured or killed by one of her scooters?Vicky Volare fell in love with motor
What insurance must Vicky have for her employees?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are convenient, safe,
What insurance coverage will Colorado require Vicky to have?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are convenient,
What regulatory risks will Vicky face in operating a vehicle rental service in the state of Colorado?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a
What risks will Vicky face because she is hiring four people?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are convenient,
What are the risks specific to motor scooters as physical assets?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are
What are the risks that are specific to renting motor scooters?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are
What financial risks is Vicky assuming?Vicky Volare fell in love with motor scooters on her vacation trip to Aruba. “They’re a blast!” Vicky said, “They are convenient, safe, inexpensive, and
5. Discuss the advantages and disadvantages to payback period and to return on investment (ROI) as analysis tools for making capital investment decisions. Which do you prefer and why?
4. How would you estimate the whole of life costs of an expensive capital asset, such as an executive airplane?
3. Which of the asset valuation methods (book value, disposal value, replacement value, and fair market value) is the best for determining the value of your business’s assets? Explain your choice,
2. Discuss how the use of economic order quantity (EOQ) and reorder calculations can benefit a retail business. What are the drawbacks in using these calculations?
1. Discuss the pros and cons of providing credit to customers. If you do decide to provide credit, what policies should you establish and enforce?
5. Assume that you own a 2005 Ford F750 Super Duty truck.The truck has been driven 32,000 miles. What is a reasonable disposal value for this truck? (Be sure to reduce your estimate of sales price by
4. Assume that you have a plumbing business that requires the use of a backhoe. Contact equipment rental businesses in your area and find out the rental cost and terms for a suitable machine.Contact
3. Contact a dealer who sells expensive capital assets, such as earth-moving or transportation equipment. Find out the costs of acquiring, owning, operating, and disposing of the asset.Use a
2. Make a search, using your library, the Internet, and your business contacts, to find factors in your area. Interview the factor and determine the terms offered. Ask what things about the
1. Choose a local business in the industry in which you would like to own a firm. Visit the business that you choose, and walk about to observe the amounts and types of inventory on display.Interview
4. Finally, what do you think is the answer to Tim’s question—What could go wrong now?Vivid Sky’s sole product, SkyBOX, was designed to provide sports fans in a stadium with continual access to
If the large firms decide not to invest, what are the options available to Tim and how likely will he be to raise the capital needed?Vivid Sky’s sole product, SkyBOX, was designed to provide sports
From the standpoint of the smaller investors, what are the advantages or disadvantages of having a single large investor (like one of the entertainment companies) along with the smaller ones?Vivid
Why might the investors want a convertible note instead of getting straight stock in a start-up?Vivid Sky’s sole product, SkyBOX, was designed to provide sports fans in a stadium with continual
12. Explain the differing financial management needs of a small business during the start-up, growth, mature, and exit phases.
11. Explain how borrowing money (1) increases firm value and(2) makes more money for a business owner.
10. Explain why it is easier to borrow money to buy a semi truck than to purchase rights to a business process.
9. In what ways do the Four Cs of Borrowing differ from the requirements for being able to obtain equity capital?
8. Many small business owners prefer to borrow money rather than sell equity. Why is this so?
7. Name four ways that an investor can receive payment from a business. Describe the advantages and disadvantages of each.
6. Explain why investors prefer investments that pay back sooner to those that pay back later.

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