Chapter 1: The Entrepreneurial Process
True/False
1. Entrepreneurship is the process of planning, organizing, operating, and assuming the risk of a business venture.
Ans: True Page: 4
2. The word entreprendre refers to the individuals who “undertook” the risk of new enterprise.
A...
, Chapter 1: The Entrepreneurial Process
True/False
1. Entrepreneurship is the process of planning, organizing, operating, and assuming
the risk of a business venture.
Ans: True Page: 4
2. The word entreprendre refers to the individuals who “undertook” the risk of new
enterprise.
Ans: True Page: 5
3. Fortunately, entrepreneurs do not communicate with external “stakeholders” such
as investors and bankers.
Ans: False Page: 5
4. Aspiring entrepreneurs hope for the chance to be their own bosses and have made
the leap from their current employment into the uncertainty of a start-up.
Ans: False Page: 7
5. One negative aspect of entrepreneurs, according to research, is that they are not
open to change and they hang on to old plans even when they are not working
contributing to escalation of commitment.
Ans: False Page: 8
6. Many companies fail because the founders do not confront their management
limitations.
Ans: True Page: 9
7. Fortunately, the skills needed to run a small company are not different from those
required to run a larger firm.
Ans: False Page: 10
8. If an entrepreneur has limited experience and limited internal resources, outside
help is not necessary.
Ans: False Page: 10
9. Looking at the historical trend, it is safe to say that most businesses start small
and grow to be a large corporation.
Ans: False Page: 17
10. The failure rate of new businesses is very high, about 80-90 percent within the
first two years.
Ans: False Page: 18
,Short Answer / Fill in the Blank
11. _____________ have developed an enterprise that fits their individual
circumstances and style of life, and their basic intention is to earn an income for
themselves and their families.
Ans: Lifestyle entrepreneurs Page: 7
12. _______________ often seem to be possessed by their ideas, committing their
lives to changing the direction of their field.
Ans: Social entrepreneurs Page: 7
13. The first decision that an entrepreneur should make is whether personal lifestyle
and control are more important than ____________ and eventual wealth creation.
Ans: growth Page: 8
14. The basic objective of Stage ________________ of the entrepreneurial process is
to define the criteria that would make a business opportunity worthwhile.
Ans: 1 Page: 13
15. Setting goals and objectives, starting to write the plan, determining pricing, and
preparing a full business plan are part of Stage _______________ of the
entrepreneurial process.
Ans: 2 Page: 14
16. A full ____________ is a vital yet dynamic document for a company.
Ans: business plan Page: 15
17. Stage 5 of the entrepreneurial process is called ____________________.
Ans: Scaling and Harvesting the Venture Page: 16
18. A(n) _________________ is one that grows large enough to influence the
environment and, thus, becomes a pacesetter.
Ans: entrepreneurial firm Page: 17
19. Each year at least ____________ new businesses are started in the United States,
and of these, a small proportion turn out to be the fast-growth companies that
propel the economy forward.
Ans: 700,000 Page: 17
20. The failure rate of new companies is ________ percent within the first two years.
Ans: 24 Page: 18
, Multiple Choice
21. Which of the following is not a characteristic of entrepreneurs:
a. Self-starters
b. Lethargic
c. Optimists
d. Perseverant
Ans: B Page: 5
22. An entrepreneur is driven mainly by:
a. The control of resources
b. Changing technology
c. The perception of opportunity
d. Planning systems
Ans: C Page: 6
23. Ray Smilor identified all of these entrepreneurs types except:
a. Growth entrepreneurs
b. Aspiring entrepreneurs
c. Lifestyle entrepreneurs
d. Technology entrepreneurs
Ans: D Page: 7
24. The type of entrepreneur that have the desire and the ability to grow as fast and as
large as possible is:
a. Growth entrepreneurs
b. Aspiring entrepreneurs
c. Lifestyle entrepreneurs
d. Technology entrepreneurs
Ans: A Page: 7
25. Individuals with innovative solutions to society’s most social problems are
classified as:
a. Lifestyle entrepreneurs
b. Aspiring entrepreneurs
c. Growth entrepreneurs
d. Social entrepreneurs
Ans: D Page: 7
26. Technology entrepreneurs have ideas triggered by developments in:
a. math and sociology
b. science and history
c. social studies and business
d. science and engineering
Ans: D Page: 7
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