1. The process of determining whether an entrepreneur’s idea is a viable foundation for creating a successful business is known as a: 2. Porter’s five forces model assess industry attractiveness by surveying these five factors: 3. The strongest of the five forces in most industries is: 4. The force from the five forces model that considers economies of scale, initial capital requirements, cost advantages relevant to company size, and lack of brand loyalty is the
Changing from one form of ownership to another once a business is up and running can be difficult, expensive, and complicated. 12. Entrepreneurs should not spend much time selecting a form of ownership for their businesses because making the choice is merely a technicality, which has little impact on the business and its owner(s). 13. The sole proprietorship is the best form of ownership for entrepreneurs launching their first businesses. 4. The sole proprietorship is the easiest form of ownership to create, but once formed, it is subject to the greatest number of regulations. 15. If a sole proprietorship fails, the owner is not liable for its debts since the business is a separate legal entity. 16. Although not required by law, a written partnership agreement that spells out the terms of operating the partnership and the status of each partner should be developed. 17.
A general partner is personally liable only for the amount of money he has invested in the partnership. 18. One of the advantages of a partnership over a proprietorship is the increased sources of capital and credit it offers. 19. One disadvantage of the partnership form of ownership is the great potential for personality and authority conflicts. 20. If a limited partner withdraws, sells his ownership in the partnership, or dies, the partnership is not forced into dissolution.