Entrepreneurship: Successfully Launching New Ventures, 3e (Barringer/Ireland) Chapter 1 Introduction to Entrepreneurship 1) Klimit, the company profiled in the opening

feature for Chapter 1, plans to make money on the ski jackets and other apparel products that will use its proprietary technology by: A) manufacturing the products and selling them via catalogues and the nternet !) manufacturing the products and selling through large retailers like "ap and #ld $avy C) franchising %) manufacturing the products and selling them through ski shops and other specialty stores &) licensing its technology to outdoor gear and apparel companies Answer: & %iff: 1 'age (ef: ) *opic: ntroduction to &ntrepreneurship +) According to the "lobal &ntrepreneurship ,onitor -"&,) +../ study, about 00000000 of adults in the 1nited 2tates are either starting a business or are running a business that has been in e3istence for less than 4 15+ years6 A) 467 percent !) /68 percent C) 96: percent %) 1+6. percent &) 186+ percent Answer: C %iff: + 'age (ef: 8 *opic: ntroduction to &ntrepreneurship 4) According to the "lobal &ntrepreneurship ,onitor -"&,) +../ study, the majority of people in high;income countries are drawn to entrepreneurship for the following reasons: A) to take advantage of an attractive opportunity, to pursue independence, and to increase their incomes !) lack of career prospects, government incentives, and to increase their incomes C) lack of promotional opportunities in their jobs, to pursue independence, and government incentives %) to pursue a personal interest, lack of promotional opportunities in their jobs, and to increase their incomes &) to take advantage of an attractive opportunity, lack of career prospects, and government incentives Answer: A %iff: + 'age (ef: 8 *opic: ntroduction to &ntrepreneurship

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)) >hich of the following statements regarding business success -or failure) rates is correct? A) 9 out of 1. businesses fail within the first four years6 !) After four years, 8. percent of new businesses are still open6 C) After four years, +8 percent of new businesses are still open6 %) + out of 4 businesses fail within the first four years6 &) After four years, 1. percent of new businesses are still open6 Answer: ! %iff: 4 'age (ef: 8 *opic: ntroduction to &ntrepreneurship 8) 2tarbucks is a firm that is proactive, innovative and risk;taking6 @rom this description, we can most accurately conclude that 2tarbucks has a high level of: A) inventive Aeal !) innovative intensity C) entrepreneurial intensity %) creative intensity &) general Aeal Answer: C %iff: + 'age (ef: : *opic: ntroduction to &ntrepreneurship AAC2!: Analytic 2kills :) Bim !rill is the founder of a company named &3treme 2ports 2upreme6 *he company makes products for e3treme sports enthusiasts such as !,C bikers, hang gliders, parasailers, and surfers6 Bim wants his company to pursue a high level of corporate entrepreneurship6 *o achieve that goal, BimDs firm should be: A) innovative, risk averse, and take a Ewait and seeE posture !) take a Ewait and seeE posture, innovative, and risk taking C) proactive, not innovative, and risk taking %) take a Ewait and seeE posture, not innovative, and risk averse &) proactive, innovative, and risk taking Answer: & %iff: + 'age (ef: / *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking /) "oogle is an established firm that encourages and emphasiAes entrepreneurial behavior throughout its various divisions6 According to the te3tbook, "oogle practices: A) commercial entrepreneurship !) corporate entrepreneurship C) deliberate entrepreneurship %) business entrepreneurship &) innovative entrepreneurship Answer: ! %iff: + 'age (ef: / *opic: ntroduction to &ntrepreneurship
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7) *he three primary reasons that people become entrepreneurs and start their own firms are to: A) pursue their own ideas, realiAe financial rewards, and eliminate risk in their lives !) do what they were EbornE to do, be their own boss, and capture more of the spotlight C) take big risks, be their own boss, and do what they were EbornE to do %) be their own boss, pursue their own ideas, and realiAe financial rewards &) capture more of the spotlight, pursue their own ideas, and take big risks Answer: % %iff: + 'age (ef: 7 *opic: ntroduction to &ntrepreneurship 9) According to the te3tbook, the number one reason that people become entrepreneurs is to: A) realiAe financial rewards !) reduce the risk in their lives C) be their own boss %) capture more of the spotlight &) pursue their own ideas Answer: C %iff: 1 'age (ef: 7 *opic: ntroduction to &ntrepreneurship 1.) Kate 2aunders is starting a firm in the fashion industry primarily to pursue financial rewards6 According to the te3tbook, starting a business to make a lot of money: A) often fails to live up to its hype !) is eFually as satisfying as other reasons for starting a business C) is the number one reason people start their own business %) is the number two reason that people start their own business, right behind the lack of better career prospects &) does not rank among the top three reasons that people start their own business Answer: A %iff: + 'age (ef: 9 *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking 11) According to the te3tbook, the four characteristics of successful entrepreneurs are: A) passion for the business, is on the cutting edge of technological change, is very charismatic, and tenacity despite failure !) is young and energetic, passion for the business, product5customer focus, and seeks recognition C) passion for the business, tenacity despite failure, product5customer focus, and e3ecution intelligence %) is on the cutting edge of technological change, is forward thinking, tenacity despite failure, and product5customer focus &) passion for the business, seeks recognition, is young and energetic, and e3ecution intelligence Answer: C %iff: 4 'age (ef: 9 *opic: ntroduction to &ntrepreneurship
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1+) *he number one characteristic shared by successful entrepreneurs is: A) a charismatic personality !) passion for the business C) a desire to employ other people %) a desire to fulfill a lifetime dream &) being on the cutting edge of technological change Answer: ! %iff: + 'age (ef: 9 *opic: ntroduction to &ntrepreneurship 14) Kendall *oms recently launched a medical startup6 =e is very e3cited about the business because he strongly believes that the products his firm is working on will make a positive differences in peoplesD lives6 KendallDs e3citement results from which of the following characteristics of entrepreneurs? A) passion for the business !) tenacity despite failure C) desire to be his own boss %) desire to be on the cutting edge of technological change &) desire to gain financial rewards Answer: A %iff: + 'age (ef: 9 *opic: ntroduction to &ntrepreneurship AAC2!: Analytic 2kills 1)) *he >hat >ent >rong? feature in Chapter 1 focuses on 'rotect,y'hotos, a company that was launched in +..: but eventually went out of business6 According to the feature, the business failed primarily as a result of: A) a loss of passion for the business idea !) poor e3ecution C) a lack of tenacity on the part of the founders %) a lack of funding &) a lack of managerial e3pertise Answer: A %iff: 1 'age (ef: 11 *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking

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18) Bim Bohnson, who is at heart a craftsperson, recently started a firm to manufacture what he believes is the safest and the most versatile snowboard available6 BimDs desire is to sell his snowboard to as many people as possible, because he firmly believes in the merits of his product6 BimDs story best illustrates which of the following characteristics or attributes of successful entrepreneurs? A) e3ecution intelligence !) a desire to be your own boss C) tenacity despite failure %) desire to gain financial rewards &) product5customer focus Answer: & %iff: + 'age (ef: 1+ *opic: ntroduction to &ntrepreneurship 1:) Chad and Allison %ru3man launched a firm several years ago and have been particularly successful in introducing new products to the marketplace6 #ne thing that Chad and Allison are particularly good at is translating their thoughts, creativity, and imaginations into products that reach the marketplace6 *he ability to make this happen is most closely related to which of the following characteristics of successful entrepreneurs? A) passion for the business !) e3ecution intelligence C) tenacity despite failure %) product5market focus &) a desire for recognition Answer: ! %iff: + 'age (ef: 14 *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking 1/) *he 2avvy &ntrepreneurial @irm feature in Chapter 1 focuses on "uitar =ero and i(obot, two companies that have produced successful products6 *he featureDs main purpose is to illustrate the importance of 00000000 as a key characteristic of the founders of entrepreneurial firms6 A) e3ecution intelligence !) a desire to pursue your own ideas C) tenacity despite failure %) passion for the business &) product5customer focus Answer: C %iff: 4 'age (ef: 1) *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking

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17) >hich of the following is not one of the five common myths about entrepreneurs? A) &ntrepreneurs are networkers6 !) &ntrepreneurs are moderate risk takers6 C) &ntrepreneurs should be young and energetic6 %) &ntrepreneurs love the spotlight6 &) &ntrepreneurs are born not made6 Answer: A %iff: + 'age (ef: 18 *opic: ntroduction to &ntrepreneurship 19) >hich of the following was not identified in the te3tbook as one of the main characteristics of successful entrepreneurs? A) e3ecution intelligence !) seeks recognition C) product5customer focus %) passion for the business &) tenacity despite failure Answer: ! %iff: + 'age (ef: 1: *opic: ntroduction to &ntrepreneurship +.) According to the te3tbook, entrepreneurs are 00000000 risk takers6 A) forceful !) moderate C) high %) low &) aggressive Answer: ! %iff: + 'age (ef: 1: *opic: ntroduction to &ntrepreneurship +1) 2uppose you are a 2mall !usiness %evelopment Center counselor and youDre looking at the personality profiles of five potential entrepreneurs6 !ased on the profiles, which individual has the most desirable mi3 of personal characteristics to become a successful entrepreneur? A) Candidate A: creative, decisive, moderate risk taker !) Candidate !: seeks recognition, self;starter, strong work ethic C) Candidate C: visionary, high risk taker, energetic %) Candidate %: high risk taker, achievement motivated, is a networker &) Candidate &: tolerant for ambiguity, seeks recognition, motivated primarily by money Answer: A %iff: 4 'age (ef: 1: *opic: ntroduction to &ntrepreneurship AAC2!: (eflective *hinking

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++) >hich of the following is not a personality trait or characteristic common among entrepreneurs? A) persuasive !) visionary C) intolerant of ambiguity %) is a networker &) achievement motivated Answer: C %iff: 4 'age (ef: 1: *opic: ntroduction to &ntrepreneurship +4) >hich of the following statement is correct? A) &ntrepreneurs love the spotlight6 !) *he major attributes that lenders and venture capitalists look for in entrepreneurs favor younger rather than older entrepreneurs6 C) &ntrepreneurs are born not made6 %) &ntrepreneurs tend to be high risk takers6 &) 2tudies show that people with parents who were self;employed are more likely to become entrepreneurs6 Answer: & %iff: + 'age (ef: 1: *opic: ntroduction to &ntrepreneurship +)) According to the te3tbook, the most active age range for early stage entrepreneurial activity is: A) 19 to 4. years old !) +8 to 4) years old C) 4+ to )) years old %) 47 to 8. years old &) )) to 87 years old Answer: ! %iff: 4 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship +8) According to Chapter 1, investors often cite the 00000000 as their most important criterion in the decision to fund new ventures6 A) financial position of the new venture !) strength of the industry the new firm is entering C) strength of the new ventureDs marketing plan %) strength of the business idea &) strength of the entrepreneur Answer: & %iff: + 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship

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+:) According to Chapter 1, a sentiment that venture capitalists often e3press is that: A) the strength of the entrepreneur and the strength of the business idea are of eFual importance !) they would never fund a strong entrepreneur with a weak business idea C) they would rather fund a strong entrepreneur with a mediocre business idea than fund a strong business idea with a mediocre entrepreneur %) a new ventureDs marketing plan is more important than either the strength of the entrepreneur or the strength of the business idea &) they would rather fund a strong business idea with a mediocre entrepreneur, than a strong entrepreneur with a mediocre business idea Answer: C %iff: 4 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship +/) Atlantic 'rinting GGC is a startup that is working on a new technology for the printing industry6 !ecause the technology its working on is highly proprietary, the company is located in the warehouse district of a large eastern city6 AtlanticDs founder, 2arah 2ims, rarely gives interviews, and is careful to not divulge much about what the company is doing6 >hich of the following common myths about entrepreneurs does the behavior of its founder, 2arah 2ims, dispel? A) &ntrepreneurs are born, not made6 !) &ntrepreneurs are gamblers6 C) &ntrepreneurs are motivated primarily by money6 %) &ntrepreneurs should be young and energetic6 &) &ntrepreneurs love the spotlight6 Answer: & %iff: + 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship AAC2!: Analytic 2kills +7) According to the te3tbook, there are three types of startup firms: A) lifestyle firms, general firms, and entrepreneurial firms !) standard;of;living firms, statutory firms, and general firms C) entrepreneurial firms, standard;of;living firms, and statutory firms %) lifestyle firms, salary;substitute firms, and entrepreneurial firms &) innovative firms, entrepreneurial firms, and standard firms Answer: % %iff: + 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship

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+9) According to the te3tbook, there are three types of startup firms: entrepreneurial firms, lifestyle firms, and: A) civil firms !) salary;substitute firms C) statutory firms %) standard;of;living firms &) innovative firms Answer: ! %iff: 1 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship 4.) ,issouri 2teak and 2eafood is a restaurant that has been owned by Cameron 'eterson for the past nine years6 *he restaurant offers a menu that is typical for steak and seafood restaurants, and affords Cameron a level of income that is similar that what he would earn in a conventional job6 According to the te3tbook, ,issouri 2teak and 2eafood is an e3ample of a: A) salary;substitute firm !) entrepreneurial firm C) standard;of;living firm %) lifestyle firm &) everyday;life firm Answer: A %iff: + 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship AAC2!: Analytic 2kills 41) *ahoe *rips H *rails, a company mentioned in Chapter 1, leads multiday outdoor adventure trips for private groups and corporate clients to Gake *ahoe, Iosemite, %eath Jalley, and similar locations6 *he company was started by =anna 2ullivan, an individual that gave up a prestigious job with a private investment company because *ahoe *rips H *rails better accommodates her personal lifestyle6 *ahoe *rips H *rails is an e3ample of a 00000000 firm6 A) entrepreneurial !) salary;substitute C) standard;of;living %) statutory &) lifestyle Answer: & %iff: 1 'age (ef: 17 *opic: ntroduction to &ntrepreneurship AAC2!: Analytic 2kills

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4+) &ntrepreneurial firms: A) offer common products to customers and are not particularly innovative !) bring new products and services to market, that are not particularly innovative C) offer common products to customers, are not particularly innovative, and provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so %) provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so &) bring new products and services to market by creating and seiAing opportunities Answer: & %iff: + 'age (ef: 17 *opic: ntroduction to &ntrepreneurship 44) >hich of the following statements is true regarding the demographics of entrepreneurs in the 1nited 2tates? A) #ver the past 1. years, the demographic makeup of entrepreneurial firms has remained relatively unchanged6 !) #f the +: million businesses in the 1nited 2tates, a decreasing number are owned by women and minorities6 C) !etween 199/ and +..+, the fastest;growing area of women;owned firms was health care6 %) *here is strong evidence to suggest that the number of seniors choosing entrepreneurial careers is increasing6 &) nterest in entrepreneurship among young people remains flat6 Answer: % %iff: + 'age (ef: 19 *opic: ntroduction to &ntrepreneurship 4)) >hich of the following statements is not true about women;owned businesses in the 1nited 2tates? A) (ecent studies show that women;owned firms remain less profitable than male;owned firms6 !) Although historically women;owned businesses have been primarily in health care and professional services, that emphasis is changing6 C) !etween 199/ and +..+, the fastest growing area of women; owned businesses was construction6 %) *he number of women;owned firms reflects the growing breadth and economic prowess of women;owned businesses in the 1nited 2tates6 &) *here were :68 million women;owned businesses in +..+, the most recent year the 1626 Census !ureau collected business ownership data6 Answer: A %iff: + 'age (ef: 19 *opic: Changing %emographics of &ntrepreneurs

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48) Among minorities, 00000000 owned firms had the highest growth rate between 199/ and +..+6 A) 'acific slander !) Asian American C) =ispanic %) African American &) American ndian Answer: % %iff: 4 'age (ef: 19 *opic: Changing %emographics of &ntrepreneurs 4:) >hich of the following was not given in the te3tbook as a reason for the increase in the number of senior entrepreneurs? A) 2eniors tend to be more passionate about new business ideas than middle;aged or younger prospective entrepreneurs6 !) ,any seniors have e3tensive business e3perience and other Fualities that eFuip them for an entrepreneurial career6 C) "rowing worries among seniors that they need to earn additional income to pay for future health care services and other e3penses6 %) An increasing desire among older workers for more personal fulfillment in their lives &) corporate downsiAing6 Answer: A %iff: + 'age (ef: 19 *opic: Changing %emographics of &ntrepreneurs 4/) A "allup study revealed that 00000000 high school students want to start their own companies6 A) 1 out of 1. !) 4 out of 1. C) 8 out of 1. %) / out of 1. &) 9 out of 1. Answer: % %iff: 4 'age (ef: +. *opic: Changing %emographics of &ntrepreneurs

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47) As new products are introduced, that are better than their e3isting generation of products, sales normally increase, because the new products provide consumers increased value or worth6 *his process, which is called 00000000, stimulates economic activity, which is a good thing for the economy6 A) creative destruction !) repetitive destruction C) iterative replacement %) inventive replacement &) iterative destruction Answer: A %iff: + 'age (ef: +1 *opic: &ntrepreneurshipDs mportance 49) n his5her book The Theory of Economic Development, 00000000 argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete6 *his process is called creative destruction6 A) ,ichael 'orter !) =6=6 2tevenson C) Boseph 2chumpeter %) ,ichael "erber &) &dith 'enrose Answer: C %iff: + 'age (ef: +1 *opic: &ntrepreneurshipDs mportance ).) According to the te3tbook, entrepreneurship has historically had -a): A) major impact on the economy and minor impact on society !) minor impact on both the economy and society C) major impact on society and minor impact on the economy %) major impact on both the economy and society &) no impact on either the economy or society Answer: % %iff: 1 'age (ef: +1 *opic: &ntrepreneurshipDs mportance )1) 00000000 is the process of creating something new, which is central to the entrepreneurial process6 A) Creative destruction !) ,odernism C) &3ecution %) Creativity &) nnovation Answer: & %iff: 1 'age (ef: +1 *opic: &ntrepreneurshipDs mportance

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)+) According to the te3tbook, small entrepreneurial firms produce 00000000 more patents per employee than large patenting firms6 A) + !) 8 C) 9 %) 14 &) +. Answer: % %iff: 4 'age (ef: +1 *opic: &ntrepreneurshipDs mportance )4) >hich of the following statement is incorrect regarding the economic impact of entrepreneurial firms? A) 2mall firms are more innovative than large firms6 !) 2mall firms produce more patents per employee than large firms6 C) &conomic activity is moving increasingly in the direction of small rather than large firms6 %) 2mall businesses employ more than half of all private sector employees in the 1nited 2tates6 &) 2mall businesses create about one;third of all new jobs6 Answer: & %iff: 4 'age (ef: +1 *opic: &ntrepreneurshipDs mportance ))) *opics &ntertainment, the focus of the 'artnering for 2uccess feature in Chapter 1, produces Ebo3ed setsE of childrenDs %J%s featuring the best products from small producers6 >hat is the primary lesson that entrepreneurial firms can learn from reading about what *opics &ntertainment is doing? A) %eveloping a product or service that helps individuals and businesses work more smoothly and efficiently is a viable business idea6 !) 2mall firms often benefit by partnering with larger firms to gain access to their managerial talent C) innovation is often not the key to entrepreneurial success6 %) !y partnering with a large company, small companies can distribute their products more widely and gain more visibility than they would ever be able to do on their own6 &) Kuick success can rapidly erode into failure if a business becomes overly confident and starts chasing deals that donDt make sense6 Answer: % %iff: 4 'age (ef: +4 *opic: &ntrepreneurshipDs mportance AAC2!: (eflective *hinking

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)8) >hich of the following is the correct seFuence for the four steps in the entrepreneurial process? A) deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm !) developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, managing and growing the entrepreneurial firm C) developing successful business ideas, moving from an idea to an entrepreneurial firm, deciding to become an entrepreneur, managing and growing the entrepreneurial firm %) deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, developing successful business ideas, managing and growing the entrepreneurial firm &) deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, developing successful business ideas, managing and growing the entrepreneurial firm Answer: A %iff: 4 'age (ef: +4 *opic: &ntrepreneurshipDs mportance ):) >hich of the following is not one of the four steps of the entrepreneurial process? A) deciding to become an entrepreneur !) determining how to seiAe the spotlight C) developing successful business ideas %) moving from an idea to an entrepreneurial firm &) managing and growing the entrepreneurial firm Answer: ! %iff: 1 'age (ef: +4 *opic: *he &ntrepreneurial 'rocess )/) An event that prompts an individual to become an entrepreneur, such as losing a job, inheriting money, or accommodating a certain lifestyle, is referred to as a-n): A) prompting event !) entrepreneurial prompt C) initiating event %) triggering event &) kick off event Answer: % %iff: 1 'age (ef: +8 *opic: *he &ntrepreneurial 'rocess )7) A 00000000 is a written document that describes all the aspects of a business venture in a concise manner6 A) business plan !) business model C) operations plan %) corporate plan &) contingency plan Answer: A %iff: 1 'age (ef: +8 *opic: *he &ntrepreneurial 'rocess
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)9) A firmDs 00000000 is a plan for how it competes, uses its resources, structures its relationships, interfaces with customers, and creates value to sustain itself on the basis of the value it creates A) business plan !) business model C) tactical model %) strategic plan &) operations model Answer: ! %iff: + 'age (ef: +8 *opic: *he &ntrepreneurial 'rocess 8.) Katherine @rans just received an inheritance of L8.,... from her grandmother6 2he has decided to use the money to start a business that she has always been interested in starting6 @or Katherine, the L8.,... inheritance represents a 00000000 that prompted her to start a business6 A) lifestyle event !) threshold event C) initiative event %) milestone event &) triggering event Answer: & %iff: 4 'age (ef: +8 *opic: *he &ntrepreneurial 'rocess AAC2!: (eflective *hinking 81) According to the results of the "&, +../ study, about 1 out of every +. American adults is actively engaged in starting a business or is the owner5manager of a business that is less than 4 15+ years old6 Answer: @AG2& %iff: + 'age (ef: 8 *opic: ntroduction to &ntrepreneurship 8+) According to reliable statistics, 9 out of 1. businesses fail in their first few years of e3istence6 Answer: @AG2& %iff: + 'age (ef: 8 *opic: ntroduction to &ntrepreneurship 84) &ntrepreneurship is the process by which individuals pursue opportunities without regard to resources they currently control6 Answer: *(1& %iff: 1 'age (ef: : *opic: ntroduction to &ntrepreneurship 8)) &stablished firms with an entrepreneurial emphasis are proactive, innovative, and risk;taking6 Answer: *(1& %iff: + 'age (ef: / *opic: ntroduction to &ntrepreneurship
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88) *he number one reason that people become entrepreneurs is to pursue financial rewards6 Answer: @AG2& %iff: + 'age (ef: 9 *opic: ntroduction to &ntrepreneurship 8:) *he number one characteristic shared by successful entrepreneurs is passion for the business6 Answer: *(1& %iff: 1 'age (ef: 7 *opic: ntroduction to &ntrepreneurship 8/) *he four main characteristics of successful entrepreneurs are: passion for the business, e3ecution intelligence, product5customer focus, and tenacity despite failure6 Answer: *(1& %iff: + 'age (ef: 9 *opic: ntroduction to &ntrepreneurship 87) !ecause entrepreneurs are very tenacious and they have a product5customer focus, the success rate associated with their efforts is naturally high6 Answer: @AG2& %iff: 4 'age (ef: 1+ *opic: ntroduction to &ntrepreneurship 89) &ntrepreneurs are born not made6 Answer: @AG2& %iff: + 'age (ef: 18 *opic: ntroduction to &ntrepreneurship :.) &ntrepreneurs are usually moderate, rather than high, risk;takers6 Answer: *(1& %iff: 4 'age (ef: 1: *opic: ntroduction to &ntrepreneurship :1) *he most active age range for business ownership is 48 to )8 years old6 Answer: *(1& %iff: + 'age (ef: 1/ *opic: ntroduction to &ntrepreneurship :+) n terms of the EtypesE of startup firms, entrepreneurial firms are firms that provide their owner or owners the opportunity to pursue a particular lifestyle, and make a living at it6 Answer: @AG2& %iff: 1 'age (ef: 17 *opic: ntroduction to &ntrepreneurship

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:4) #ver the past 1. years, the demographic makeup of entrepreneurial firms has remained fairly stable in the 1nited 2tates and around the world6 Answer: @AG2& %iff: + 'age (ef: 17 *opic: Changing %emographics of &ntrepreneurs :)) *here is strong evidence to suggest that the number of older people choosing entrepreneurial careers is increasing rapidly6 Answer: *(1& %iff: + 'age (ef: 19 *opic: &ntrepreneurshipDs mportance :8) 1nfortunately, statistics show that there is very little interest in entrepreneurship among high school students in the 1nited 2tates6 Answer: @AG2& %iff: + 'age (ef: +. *opic: Changing %emographics of &ntrepreneurs ::) Boseph 2chumpeter argued that entrepreneurs develop new products and technologies that over time make current products and technologies obsolete, and this process, which he called creative destruction, is good because it stimulates economic activity6 Answer: *(1& %iff: + 'age (ef: +1 *opic: &ntrepreneurshipDs mportance :/) nnovation is the process of creating something new, which is central to the entrepreneurial process6 Answer: *(1& %iff: 1 'age (ef: +1 *opic: &ntrepreneurshipDs mportance :7) n the past two decades, economic activity has moved increasingly in the direction of large firms, rather than smaller entrepreneurial firms6 Answer: @AG2& %iff: 4 'age (ef: +1 *opic: &ntrepreneurshipDs mportance :9) *he entrepreneurial process consists of four steps: deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, and managing and growing the entrepreneurial firm6 Answer: *(1& %iff: + 'age (ef: +4 *opic: *he &ntrepreneurial 'rocess

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/.) A business model is a written document that describes all the aspects of a business venture in a concise manner6 Answer: @AG2& %iff: + 'age (ef: +8 *opic: *he &ntrepreneurial 'rocess /1) >hat is entrepreneurship? >hat is the essence of entrepreneurial behavior? Answer: &ntrepreneurship is the process by which individuals pursue opportunities without regard to the resources they currently control6 *he essence of entrepreneurial behavior is identifying opportunities and putting useful ideas into practice6 %iff: 1 'age (ef: : /+) %escribe the three primary reasons that people become entrepreneurs and start their own firms6 Answer: *he three primary reasons that people become entrepreneurs and start their own firms are to -1) be their own boss, -+) pursue their own ideas, and -4) realiAe financial rewards6 *he first of these reasonsbeing oneDs own bossis given most commonly6 ,any entrepreneurs want to be their own boss because either they have had a long;time ambition to own their own firm or they have become frustrated working in traditional jobs6 *he second reason people start their own firms is to pursue their own ideas6 2ome people are naturally alert, and when they recogniAe ideas for new products or services, they have a desire to see those ideas realiAed6 *he third reason people start their own firms is to pursue financial rewards6 *his motivation, however, is typically secondary to the first two6 %iff: + 'age (ef: 7 /4) %escribe the four main characteristics of successful entrepreneurs6 Answer: *he four main characteristics of successful entrepreneurs are: passion for the business, product5customer focus, tenacity despite failure, and e3ecution intelligence6 *he number one characteristic shared by successful entrepreneurs is passion of their business, whether it is in the conte3t of a new firm or an e3isting business6 *his passion typically stems from the entrepreneurDs belief that the business will positively influence peopleDs lives6 A second defining characteristic of successful entrepreneurs is a product5customer focus6 *his characteristic underscores two of the most important elements in any businessproducts and customers6 *he third characteristic of successful entrepreneurs is tenacity despite failure6 !ecause entrepreneurs are typically trying something new, the failure rate associated with their efforts is naturally high6 *he litmus test for entrepreneurs is their ability to persevere through setbacks and failures6 *he fourth characteristic of successful entrepreneurs is e3ecution intelligence6 *he ability to effectively e3ecute a business idea means developing a business model, putting together a new venture team, raising money, establishing partnerships, managing finances, leading and motivating employees, and so on6 %iff: + 'age (ef: 9

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/)) dentify the three types of start;up firms, and discuss how they differ6 'rovide e3amples of each type of firm6 Answer: *he three types of start;up firms are: salary;substitute firms, lifestyle firms, and entrepreneurial firms6 2alary;substitute firms are small firms that afford their owners a level of income similar to what they would earn in a conventional job6 &3amples of salary;substitute firms are dry cleaners, convenience stores, restaurants, accounting firms, retail stores, and hairstyling salons6 Gifestyle firms provide their owner or owners the opportunity to pursue a particular lifestyle and earn a living while doing so6 &3amples of lifestyle firms include ski instructors, golf pros, and tour guides6 &ntrepreneurial firms bring new products and services to market by creating and seiAing opportunities6 *here are many e3amples of entrepreneurial firms in computer software, biotechnology, and medical devices6 %iff: + 'age (ef: 1/ /8) dentify and discuss the three primary reasons that entrepreneurial behavior has a strong impact on the 1nited 2tates economy6 Answer: *he two reasons that entrepreneurial behavior has a strong impact on the 1nited 2tates economy are as follows: innovation and job creation nnovation is the process of creating something new, which is central to the entrepreneurial process6 According to the $ational @ederation for ndependent !usinesses, small firms -fewer than 8.. employees) are twice as innovative per employee as larger firms6 n addition, small innovative firms produce 14 times more patents per employee than large patenting firms6 n regard to job creation, entrepreneurial firms play a major role6 2mall businesses employ more than half of all private sector employees in the 1nited 2tates and create about two;thirds of new jobs6 %iff: 4 'age (ef: +1

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