22-23 BM 2B Unit 2 Quiz

Jacob opened a doughnut shop, but its location under a busy freeway made it hard for customers to find him, so it closed after only eight months. Which response from Jacob exemplifies the way entrepreneurs are taught to think about risk and failure?

• “I wasn’t successful this time, but I learned a lot for next time.”

• “If the doughnut shop idea didn’t work in this town, I don’t know what will.”

• “The truth is I can’t make people like doughnuts. If I could, I’d still be in business.”

• “Failing with an idea as simple as a doughnut shop has made me wary of starting over.”

When Chef Daniel thought up his idea for drone-delivered desserts, he thought he had something the public would gladly welcome. He couldn’t convince anyone to invest in funding the business, but luckily, he had enough money to launch it himself, including money for a sizable marketing budget. Unfortunately, Daniel only received a few orders for his desserts, and even those orders appeared to be prank calls. Which phrase BEST describes the most likely reason for his business failure?

• Lack of customer focus

• Bad business idea

• Not enough managerial experience

• Lack of cash

Which word BEST describes the overall landscape of business?

• predictable

• basic

• dynamic

• forgiving

Maurice opened a successful flower shop last year, and now he employs seven full-time workers. Although he is off to a great start, based on industry averages, what are his chances of still being in business five years from now?

• 20 percent

• 50 percent

• 60 percent

• 75 percent

Which is a consequence of companies like Uber and Lyft dominating the personal rideshare market?

• Investors are funding more transportation services to compete.

• Entrepreneurs are learning from the mistakes of larger players.

• The ridesharing service market is shrinking year over year.

• Startups are declining in the transportation industry.

Which is an example of a business that failed because of cash problems?

• A music instrument store that had lots of customers but couldn't pay its suppliers fast enough.

• A musical instrument store that woudn't sell an instrument without selling instruction.

• A musical instrument store that was started by someone who didn't play a musical instrument.

• A musical instrument store that added music LPs to their inventory but couldn't sell any.

Entrepreneurs need to ___ and ___ risk to be successful.

• identify, build

• evaluate, manage

• plan, create

• find, amplify

Which is an example of a company experiencing external risk?

• A toy store operating in an area with no families or children.

• A paint store that manages its waste with green technologies.

• A technology business operating during a power outage.

• An investment company that was accused of defrauding investors.

Houston's Cupcake Kitchen experienced $30,000 worth of storm damage due to Hurricane Harvey. When the store reopened 5 miles away from the original site, it experienced an immediate jump in sales. What does this illustrate?

• Businesses that learn through failure can sometimes succeed.

• Hazards like hurricanes can force entrepreneurs to reinvest.

• People are the most important commodity in any business venture.

• Location risks can include risks to sales, not just disasters.

When Tabitha opened her architectural planning firm, she spent months considering the risks and figuring out how to manage each one. Unfortunately, she didn't plan for employee theft, so when it happened - to the tune of $50,000 - she was forced to close. Which kind of risk did Tabitha fail to plan for?

• people risks

• hazardous risks

• location risks

• internal risks