NAF Entrepreneurship Essay Exam
Questions and Answers
Describe one advantage of forming a partnership - correct answer-*shared responsibility
*partners can bring new sources of capital
Describe one disadvantage of forming a partnership - correct answer-*partners may not
have the same viewpoints and disagree on management or communication styles
Explain why banks require collateral from an entrepreneur - correct answer-It can be
claimed by the bank if the entrepreneur does not pay back the loan. It ensures that the
back will receive money back from the entrepreneur should they fail to pay the bank
Describe one benefit of debt financing - correct answer-*interests on the loan can be
adjusted
*bank does not interfere with the running of the business
Define what a SWOT analysis is - correct answer-Is a tool for determining: Strengths
Weaknesses Opportunities Threats
Describe the components of a SWOT analysis - correct answer-*S and W can be
controlled-skills: contacts, time
*O and T are factors in the environment that affect the potential success: laws,
competition
Describe one way a focus group can help an entrepreneur to gather market information
- correct answer-*small size and informal structure of focus group encourages potential
customers to discuss what they want and expect
*they can provide suggestions
Describe one disadvantage of using a focus group to gather market information - correct
answer-*they can be expensive and difficult to assemble
*a qualified researcher must be found to lead the group
Explain why being socially responsible is important for business - correct answer-Being
socially responsible in business contributes to the well being of the employees,
customers and the society. It created a positive image
Describe one way a small business can be socially responsible - correct answer-
*recalling unsafe products
*creating safe products
Questions and Answers
Describe one advantage of forming a partnership - correct answer-*shared responsibility
*partners can bring new sources of capital
Describe one disadvantage of forming a partnership - correct answer-*partners may not
have the same viewpoints and disagree on management or communication styles
Explain why banks require collateral from an entrepreneur - correct answer-It can be
claimed by the bank if the entrepreneur does not pay back the loan. It ensures that the
back will receive money back from the entrepreneur should they fail to pay the bank
Describe one benefit of debt financing - correct answer-*interests on the loan can be
adjusted
*bank does not interfere with the running of the business
Define what a SWOT analysis is - correct answer-Is a tool for determining: Strengths
Weaknesses Opportunities Threats
Describe the components of a SWOT analysis - correct answer-*S and W can be
controlled-skills: contacts, time
*O and T are factors in the environment that affect the potential success: laws,
competition
Describe one way a focus group can help an entrepreneur to gather market information
- correct answer-*small size and informal structure of focus group encourages potential
customers to discuss what they want and expect
*they can provide suggestions
Describe one disadvantage of using a focus group to gather market information - correct
answer-*they can be expensive and difficult to assemble
*a qualified researcher must be found to lead the group
Explain why being socially responsible is important for business - correct answer-Being
socially responsible in business contributes to the well being of the employees,
customers and the society. It created a positive image
Describe one way a small business can be socially responsible - correct answer-
*recalling unsafe products
*creating safe products
