Contents
CHAPTER 1 – INTRODUCTION TO ENTREPRENEURSHIP 1
CHAPTER 2 – BECOMING AN ENTREPRENEUR 7
CHAPTER 3 –OPPORTUNITY CREATION 12
CHAPTER 4 –BUSINESS CONCEPTS AND MODELS 17
CHAPTER 5 – ANALYZING FEASIBILITY 23
CHAPTER 6 – UNDERSTANDING THE MARKET 29
CHAPTER 7 – UNDERSTANDING PRODUCT DEVELOPMENT 35
CHAPTER 8 – BUILDING THE START-UP TEAM 41
CHAPTER 9 – UNDERSTANDING THE NUMBERS 46
CHAPTER 10 – CREATING THE BUSINESS PLAN 52
CHAPTER 11 – SELECTING THE LEGAL ENTITY 59
CHAPTER 12 – ESTABLISHING AN ETHICAL & SOCIALLY RESPONSIBLE BUSINESS 64
CHAPTER 13 – STRUCTURING AN ENTREPRENEURIAL VENTURE 69
CHAPTER 14 – UNDERSTANDING PRODUCTION AND OPERATIONS 74
CHAPTER 15 –MARKETING 79
CHAPTER 16 – UNDERSTANDING FINANCING 84
CHAPTER 17 – UNDERSTANDING CAPITAL 89
CHAPTER 18 – MANAGING GROWTH 95
CHAPTER 19 – MANAGING CHANGE 100
,CHAPTER 1
Introduction To Entrepreneurship
1. T F Entrepreneurs and the entrepreneurial mindset have become ubiquitous and essential
elements of this new world.
2. T F The entrepreneurial mindset cannot be found within large corporations or socially responsible
nonprofit organizations.
3. T F Entrepreneurship can be found in some form in every country, in every age group, and
(increasingly) in women as often as in men.
4. T F Entrepreneurship provides many benefits to society. Chief among these benefits are
economic growth, new industry formation, and job creation.
5. T F Economic growth is slowed down by technological change, investment, and trade.
6. T F As an industry grows, it generally becomes more fragmented as a result of so many firms
competing for position.
7. T F Entrepreneurial ventures are not responsible for significant job creation.
8. T F Entrepreneurial ventures and small businesses are related, but they are not the same in most
respects.
9. T F Small lifestyle businesses are usually started to generate an income and a lifestyle for the
owner or the family.
10. T F The time prior to a firm's birth is called the fuzzy front end.
11. T F The vital issue for entrepreneurs is not avoiding failure but minimizing the cost of a possible
failure.
12. T F The term entrepreneur has existed for more than 100 years.
13. T F The 1980s has been called the Decade of Entrepreneurship.
14. T F The late 1980s brought the "dot com" bubble and the rush of the venture capital community
to position itself for what appeared to be a new way of doing business.
15. T F The knowledge economy of the 2000s is characterized by low-cost competition from Asia
and Central and Eastern Europe.
16. T F Women account for two-thirds of all entrepreneurial activity globally.
17. T F Although they constitute a minority, Asian Americans have been very successful as
entrepreneurs.
18. T F Social responsibility is about a company's accountability to society, which can range from
proactive social programs to rewarding employees for getting involved in community activities.
19. T F The Internet will be at the center of many of the major entrepreneurial trends for some time to
come.
,20. T F Today, customers and businesses can find the best products and the best prices anywhere in
the world, and they can purchase them more easily through the Internet than by shopping at retail
stores or wholesale outlets.
21. Early economists recognized that __________ is the primary force behind rising standards of living
and that _____________ innovation would determine the success of many nations in the future.
a) technology / technological
b) labor / growth
c) manufacturing / distribution
d) industry formation / job
e) economic growth / invention
22. Technological change has facilitated _________________ and a new form of creative destruction by
moving _______________ out of the Unites States to countries where labor costs are substantially
less.
a) innovation / platform technologies
b) globalization / lower-skilled jobs
c) input models / resources
d) fluid groups / higher-skilled jobs
e) none of the above
23. In the year ____________ China was far more technologically advanced than Western Europe, but
then it closed itself off from the rest of the world and resisted change.
a) 1020
b) 1700
c) 1400
d) 1000
e) 1100
24. New industries are born when technological change produces a/an __________ opportunity that an
enterprising entrepreneur seizes.
a) investment
b) novel
c) crucial
d) successful
e) efficient
25. In technological industries, the pattern of growth, shakeout, stabilization, and decline can be
interrupted at any point by the entry of another______________ technology.
a) productive
b) fragmented
c) efficient
d) disruptive
e) none of these
, 26. The Small Business Administration (SBA) defines a small business as one with fewer than
__________ employees.
a) 250
b) 385
c) 600
d) 700
e) 500
27. Entrepreneurs typically have a vision of where they want their businesses to go, and generally that
vision is on a regional, national, or (more often) _____________ level.
a) state
b) global
c) country
d) local
e) none of these
28. The process of new venture formation is characterized by _________ stage(s) and
________transition(s) or decision points.
a) one / two
b) three / five
c) two / three
d) four / three
e) five / two
29. ______________ is the mechanism that drives an individual to become a nascent entrepreneur
because all other opportunities for income appear to be absent or unsatisfactory.
a) Pull
b) Risk
c) Success
d) Push
e) Money
30. The Small Business Administration Office of Advocacy reports that _____________ of new
businesses survive at least two years.
a) one-half
b) one-third
c) three-quarters
d) two-thirds
e) none of these
Ans: d
31. Firms that are most likely to survive over the long term are those that display superior levels of
reliability and accountability in performance, ________________, and structure.
a) resources
b) age
c) operations
d) processes
e) controls
CHAPTER 1 – INTRODUCTION TO ENTREPRENEURSHIP 1
CHAPTER 2 – BECOMING AN ENTREPRENEUR 7
CHAPTER 3 –OPPORTUNITY CREATION 12
CHAPTER 4 –BUSINESS CONCEPTS AND MODELS 17
CHAPTER 5 – ANALYZING FEASIBILITY 23
CHAPTER 6 – UNDERSTANDING THE MARKET 29
CHAPTER 7 – UNDERSTANDING PRODUCT DEVELOPMENT 35
CHAPTER 8 – BUILDING THE START-UP TEAM 41
CHAPTER 9 – UNDERSTANDING THE NUMBERS 46
CHAPTER 10 – CREATING THE BUSINESS PLAN 52
CHAPTER 11 – SELECTING THE LEGAL ENTITY 59
CHAPTER 12 – ESTABLISHING AN ETHICAL & SOCIALLY RESPONSIBLE BUSINESS 64
CHAPTER 13 – STRUCTURING AN ENTREPRENEURIAL VENTURE 69
CHAPTER 14 – UNDERSTANDING PRODUCTION AND OPERATIONS 74
CHAPTER 15 –MARKETING 79
CHAPTER 16 – UNDERSTANDING FINANCING 84
CHAPTER 17 – UNDERSTANDING CAPITAL 89
CHAPTER 18 – MANAGING GROWTH 95
CHAPTER 19 – MANAGING CHANGE 100
,CHAPTER 1
Introduction To Entrepreneurship
1. T F Entrepreneurs and the entrepreneurial mindset have become ubiquitous and essential
elements of this new world.
2. T F The entrepreneurial mindset cannot be found within large corporations or socially responsible
nonprofit organizations.
3. T F Entrepreneurship can be found in some form in every country, in every age group, and
(increasingly) in women as often as in men.
4. T F Entrepreneurship provides many benefits to society. Chief among these benefits are
economic growth, new industry formation, and job creation.
5. T F Economic growth is slowed down by technological change, investment, and trade.
6. T F As an industry grows, it generally becomes more fragmented as a result of so many firms
competing for position.
7. T F Entrepreneurial ventures are not responsible for significant job creation.
8. T F Entrepreneurial ventures and small businesses are related, but they are not the same in most
respects.
9. T F Small lifestyle businesses are usually started to generate an income and a lifestyle for the
owner or the family.
10. T F The time prior to a firm's birth is called the fuzzy front end.
11. T F The vital issue for entrepreneurs is not avoiding failure but minimizing the cost of a possible
failure.
12. T F The term entrepreneur has existed for more than 100 years.
13. T F The 1980s has been called the Decade of Entrepreneurship.
14. T F The late 1980s brought the "dot com" bubble and the rush of the venture capital community
to position itself for what appeared to be a new way of doing business.
15. T F The knowledge economy of the 2000s is characterized by low-cost competition from Asia
and Central and Eastern Europe.
16. T F Women account for two-thirds of all entrepreneurial activity globally.
17. T F Although they constitute a minority, Asian Americans have been very successful as
entrepreneurs.
18. T F Social responsibility is about a company's accountability to society, which can range from
proactive social programs to rewarding employees for getting involved in community activities.
19. T F The Internet will be at the center of many of the major entrepreneurial trends for some time to
come.
,20. T F Today, customers and businesses can find the best products and the best prices anywhere in
the world, and they can purchase them more easily through the Internet than by shopping at retail
stores or wholesale outlets.
21. Early economists recognized that __________ is the primary force behind rising standards of living
and that _____________ innovation would determine the success of many nations in the future.
a) technology / technological
b) labor / growth
c) manufacturing / distribution
d) industry formation / job
e) economic growth / invention
22. Technological change has facilitated _________________ and a new form of creative destruction by
moving _______________ out of the Unites States to countries where labor costs are substantially
less.
a) innovation / platform technologies
b) globalization / lower-skilled jobs
c) input models / resources
d) fluid groups / higher-skilled jobs
e) none of the above
23. In the year ____________ China was far more technologically advanced than Western Europe, but
then it closed itself off from the rest of the world and resisted change.
a) 1020
b) 1700
c) 1400
d) 1000
e) 1100
24. New industries are born when technological change produces a/an __________ opportunity that an
enterprising entrepreneur seizes.
a) investment
b) novel
c) crucial
d) successful
e) efficient
25. In technological industries, the pattern of growth, shakeout, stabilization, and decline can be
interrupted at any point by the entry of another______________ technology.
a) productive
b) fragmented
c) efficient
d) disruptive
e) none of these
, 26. The Small Business Administration (SBA) defines a small business as one with fewer than
__________ employees.
a) 250
b) 385
c) 600
d) 700
e) 500
27. Entrepreneurs typically have a vision of where they want their businesses to go, and generally that
vision is on a regional, national, or (more often) _____________ level.
a) state
b) global
c) country
d) local
e) none of these
28. The process of new venture formation is characterized by _________ stage(s) and
________transition(s) or decision points.
a) one / two
b) three / five
c) two / three
d) four / three
e) five / two
29. ______________ is the mechanism that drives an individual to become a nascent entrepreneur
because all other opportunities for income appear to be absent or unsatisfactory.
a) Pull
b) Risk
c) Success
d) Push
e) Money
30. The Small Business Administration Office of Advocacy reports that _____________ of new
businesses survive at least two years.
a) one-half
b) one-third
c) three-quarters
d) two-thirds
e) none of these
Ans: d
31. Firms that are most likely to survive over the long term are those that display superior levels of
reliability and accountability in performance, ________________, and structure.
a) resources
b) age
c) operations
d) processes
e) controls
