Answer: D. Starts or reshapes a venture Entrepreneurs pursue opportunities by starting a venture or substantially changing an existing one.
Who applies entrepreneurial thinking inside an existing company?
A Auditor
B Intrapreneur
C Distributor
D Franchisee
Answer: B. Intrapreneur An intrapreneur develops ideas and accepts initiative within an established organization.
What does opportunity recognition begin with?
A Buying excess inventory
B Choosing a logo first
C Identifying an unmet need
D Hiring a large team
Answer: C. Identifying an unmet need Entrepreneurs often identify a customer problem or unmet need that a venture could address.
Why should founders talk with potential customers early?
A Test assumptions with evidence
B Guarantee immediate sales
C Avoid defining the market
D Replace a business plan
Answer: A. Test assumptions with evidence Early conversations can reveal customer needs and challenge assumptions before major investment.
What is market research intended to reveal?
A Guaranteed future profits
B Every legal requirement
C Only the founder’s preferences
D Customers, demand, and competitors
Answer: D. Customers, demand, and competitors Market research helps assess demand, customer characteristics, and the competitive landscape.
Which method gathers new information directly from customers?
A Published census
B Primary research
C Secondary research
D Industry benchmark
Answer: B. Primary research Primary research collects information firsthand through methods such as interviews or surveys.
Which customer group is a venture’s target market?
A Every person in a country
B Only current suppliers
C Intended customer group
D The founder’s investor list
Answer: C. Intended customer group A target market is the group of customers a business intends to reach.
What does a market niche describe?
A A focused customer segment
B The entire supply chain
C A company’s legal form
D All possible industries
Answer: A. A focused customer segment A niche is a narrower segment with particular needs or characteristics.
Why study competitors before launching?
A Avoid setting prices
B Copy every product feature
C Eliminate customer research
D Find gaps and differentiation
Answer: D. Find gaps and differentiation Competitive analysis helps identify alternatives, market gaps, and ways to distinguish an offering.
Which question tests a value proposition?
A Who owns the building?
B Why would customers choose this?
C When was the logo made?
D How many desks are available?
Answer: B. Why would customers choose this? A value proposition explains the benefit an offering provides and why customers may choose it.
What does a business model explain?
A How staff take holidays
B How competitors set policy
C Value creation, delivery, capture
D How a logo is copyrighted
Answer: C. Value creation, delivery, capture A business model describes how a venture creates, delivers, and captures value.
What does a revenue stream describe?
A How the venture earns income
B Founder selects a logo
C How employees receive feedback
D How suppliers inspect products
Answer: A. How the venture earns income Revenue streams identify how customers pay the business for its offerings.
Why might a founder test a minimum viable product?
A Prove the whole market
B Avoid collecting feedback
C Replace all product planning
D Learn from early customer use
Answer: D. Learn from early customer use A basic test version can help founders gather feedback while limiting early investment.
What should a founder do when customer tests reject an assumption?
A Increase production immediately
B Revise the idea or test
C Stop asking customers
D Ignore the evidence
Answer: B. Revise the idea or test Evidence from customers can support changing an assumption, the offer, or the next experiment.
What is the main purpose of a business plan?
A Record only past sales
B Guarantee funding approval
C Describe how the venture works
D Replace customer feedback
Answer: C. Describe how the venture works A business plan describes the business idea and how the venture expects to carry it out.
What does an executive summary do?
A Highlights the plan’s key points
B Lists every raw interview
C Replaces financial projections
D Provides only company history
Answer: A. Highlights the plan’s key points An executive summary briefly presents the main points of the business plan.
Which section assesses customers and competitors?
A Facilities diagram
B Accounts payable
C Staffing schedule
D Market analysis
Answer: D. Market analysis Market analysis describes the target market, demand, and competitive conditions.
What belongs in an operations plan?
A A list of brand colors
B How work will be delivered
C Only the founder’s biography
D Only investor names
Answer: B. How work will be delivered An operations plan outlines how the venture will produce and deliver its offering.
Why estimate startup costs before launch?
A Guarantee break-even timing
B Avoid tracking expenses
C Understand required initial funding
D Determine every future sale
Answer: C. Understand required initial funding Startup cost estimates clarify the funding needed before the business begins operating.
At break-even, which values are equal?
A Total revenue and total costs
B Sales and cash balance
C Debt and equity
D Assets and liabilities
Answer: A. Total revenue and total costs Break-even occurs when total revenue equals total costs, so there is no profit or loss.
Why prepare cash-flow projections?
A Set brand positioning
B Measure customer satisfaction
C Choose a legal structure
D Track expected cash timing
Answer: D. Track expected cash timing Cash-flow projections estimate when cash is expected to enter and leave the business.
Which cost usually changes with output volume?
A Annual fixed rent
B Variable cost
C Monthly insurance premium
D One-time filing fee
Answer: B. Variable cost Variable costs generally rise or fall as production or sales volume changes.
What is debt financing?
A Customer preorders
B Founder’s unpaid labor
C Borrowed money repaid with interest
D Selling ownership shares
Answer: C. Borrowed money repaid with interest Debt financing uses borrowed funds that must be repaid, typically with interest.
What does equity financing provide to investors?
A Ownership interest
B A fixed salary
C Guaranteed interest payments
D A supplier discount
Answer: A. Ownership interest Equity financing raises funds by giving investors an ownership stake.
What does bootstrapping usually mean?
A Selling the entire company
B Borrowing from many banks
C Opening a public exchange
D Building with limited outside funding
Answer: D. Building with limited outside funding Bootstrapping relies mainly on founders’ resources and early business revenue rather than large outside investment.
Who commonly invests personal funds in young ventures?
A Wholesaler
B Angel investor
C Franchise customer
D Trade creditor
Answer: B. Angel investor Angel investors are individuals who invest their own funds in early-stage ventures.
What does venture capital typically support?
A Government tax collection
B Short-term customer credit
C High-growth companies
D Equipment warranties
Answer: C. High-growth companies Venture capital firms invest in companies with growth potential in exchange for ownership and related rights.
What does crowdfunding typically do?
A Small contributions from many people
B Issues only bank loans
C Sells a business license
D Replaces market research
Answer: A. Small contributions from many people Crowdfunding gathers contributions or investments from a large group, often through an online platform.
Why monitor a startup’s cash runway?
A Set the company mission
B Measure market share
C Calculate customer satisfaction
D Estimate remaining cash time
Answer: D. Estimate remaining cash time Runway estimates how long available cash can support the business at its current spending rate.
Which ownership form is commonly tied to one owner?
A Joint venture
B Sole proprietorship
C General partnership
D Public corporation
Answer: B. Sole proprietorship A sole proprietorship is a business owned by one person, though legal consequences depend on jurisdiction.
What is a partnership built around?
A One customer group
B A single product line
C Two or more owners
D A government agency
Answer: C. Two or more owners Partnerships involve two or more people sharing ownership according to their arrangement.
What can an LLC often provide owners?
A Liability separation in many cases
B No tax obligations
C Automatic loan approval
D Guaranteed profits
Answer: A. Liability separation in many cases An LLC often separates owners’ personal liability from business obligations, subject to local law and exceptions.
Which form can raise equity by issuing shares?
A General partnership
B Sole proprietorship
C Informal side business
D Corporation
Answer: D. Corporation Corporations can raise equity capital through shares, subject to applicable requirements.
What does a franchisee generally receive?
A Ownership of the parent company
B Brand and system usage rights
C Unlimited territorial rights
D Guaranteed customer demand
Answer: B. Brand and system usage rights Franchise agreements commonly grant rights to use a brand and operating system under defined terms.
Why check permits and licenses before opening?
A They replace tax records
B They set customer preferences
C Activity and location requirements
D They guarantee market demand
Answer: C. Activity and location requirements Business permits and licensing needs depend on the type of activity and its location.
Which asset is protected by a trademark?
A Brand name or symbol
B A customer interview
C A production process
D A company’s cash flow
Answer: A. Brand name or symbol Trademarks protect identifiers such as brand names and symbols under applicable rules.
What does customer acquisition measure?
A Retaining current employees
B Reducing supplier lead time
C Filing tax returns
D Gaining new customers
Answer: D. Gaining new customers Customer acquisition describes attracting new customers to the venture.
How can a pilot launch help a founder?
A Avoid recording results
B Test demand on small scale
C Eliminate customer service
D Prove success permanently
Answer: B. Test demand on small scale A limited launch can test assumptions and expose operational issues before a broader rollout.
How should founders approach pricing early on?
A Set price below all costs
B Copy a random competitor
C Consider value, costs, and alternatives
D Ignore customer willingness to pay
Answer: C. Consider value, costs, and alternatives Pricing should account for customer value, costs, and competing alternatives.
What is a useful response when a product attracts interest but few purchases?
A Investigate barriers to conversion
B Scale production immediately
C Stop tracking customer behavior
D Assume interest equals revenue
Answer: A. Investigate barriers to conversion Interest alone may not produce sales; founders should learn what prevents customers from buying.
Why document financial transactions separately for the venture?
A Replace receipts
B Guarantee tax outcomes
C Avoid forecasting cash
D Track business performance clearly
Answer: D. Track business performance clearly Separate, organized records make it easier to understand the venture’s finances and meet reporting duties.
What can a contingency plan prepare a startup for?
A Unchanging supplier prices
B Plausible disruptions
C Guaranteed future success
D Fixed customer loyalty
Answer: B. Plausible disruptions Contingency planning prepares responses to risks and disruptions that could affect operations.
When should a founder consider scaling operations?
A Before testing the offer
B When costs are unknown
C When demand and capacity align
D Whenever a rival expands
Answer: C. When demand and capacity align Scaling is more sustainable when demand is supported and the venture can deliver reliably.
Why does customer retention matter to a new venture?
A Repeat buyers support stable revenue
B It guarantees product-market fit
C It replaces customer service
D It eliminates all acquisition costs
Answer: A. Repeat buyers support stable revenue Retained customers can contribute repeat business, though retention alone does not guarantee success.
What does social entrepreneurship emphasize?
A Removing customer value
B Maximizing secrecy
C Avoiding measurable outcomes
D Addressing a social need
Answer: D. Addressing a social need Social entrepreneurship applies entrepreneurial approaches to address social or environmental needs.
What is a key purpose of an entrepreneur’s network?
A Guarantee investment
B Access advice and relationships
C Replace product testing
D Avoid market competition
Answer: B. Access advice and relationships Networks can connect founders with expertise, partners, customers, and potential sources of support.
How should a founder use early sales data?
A Ignore customer segments
B Stop measuring costs
C Compare results with assumptions
D Treat one sale as proof
Answer: C. Compare results with assumptions Early sales data can test assumptions about demand, pricing, and customer behavior.
What should a founder do before committing heavily to an idea?
A Test demand with potential customers
B Choose a final logo
C Buy the largest facility
D Hire a full staff
Answer: A. Test demand with potential customers Testing customer demand before major commitments can reduce uncertainty and guide the next steps.
Which observation can signal product-market fit?
A Many clicks without sales
B A larger office opens
C A new logo launches
D Customers return and recommend
Answer: D. Customers return and recommend Repeat customers and referrals can be useful signals that an offering meets customer needs, though they are not proof by themselves.
What does customer acquisition cost estimate?
A Cost to ship every order
B Cost to gain one customer
C Cost to retain an employee
D Cost to register a company
Answer: B. Cost to gain one customer Customer acquisition cost estimates the spending associated with gaining a new customer.