chap 00111

Chapter 01 - Small Business: Its Opportunities and Rewards

Chapter 01Small Business: Its Opportunities and Rewards

True / False Questions

1. About half of the adults in the U.S. think about owning their own business, but only one person in 50 who thinks about it actually starts a business. True False

2. When thinking about owning their own business, one hurdle people need to overcome is taking the right action. True False

3. The U.S. government agency that helps people start businesses is the U.S. Department of Commerce. True False

4. Imitative firms are defined as prepackaged businesses that are bought, rented, or leased from another company. True False

5. Truly entrepreneurial businesses are characterized by imitativeness in their products, services or business models. True False

6. Small businesses focus on effectiveness whereas high-growth ventures focus on efficiency. True False

7. People starting high-growth ventures need to know how to seek and obtain venture capital. True False

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8. Nearly all entrepreneurs talk about three universally mentioned rewards: flexibility, fame, and fortune. True False

9. Growth rewards are what people get from facing and beating challenges. True False

10. Flexibility rewards refer to the money made from owning your own business. True False

11. More than 75 percent of the millionaires in the United States are entrepreneurs. True False

12. Some of the problems faced by people who are thinking about starting small businesses are: (1) there is not enough financing to start businesses, and (2) they must make something to make money. True False

13. In order to start a business, you need four elements to come together: boundary, reason, idea, and exchange. True False

14. The most frequently occurring element of the BRIE model is the intention. True False

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15. In the BRIE model, exchange refers to moving resources, products, or services to others in exchange for money or other resources. True False

16. The BRIE model can help individuals with one of the biggest hurdles of starting a business, which are resources. True False

17. Small business is the engine of job generation, but it is important for existing jobs, too. True False

18. The high-growth ventures and big businesses would not succeed without small businesses offering supporting services. True False

19. The four forms of entrepreneurship are public, independent, corporate, and social. True False

20. Public entrepreneurship is the form of entrepreneurship that involves revitalizing private agencies. True False

Multiple Choice Questions

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21. According to the text, small business involves _____ people and has its owner managing the business on a day-to-day basis. A. 100-200B. 1-50C. between 200 to 500D. at least 500

22. Identify the two hurdles that people need to overcome to move from thinking about owning their own business to achieving it. A. Moving from inaction to action and taking the right action.B. Financing the business and government regulation.C. Experience from large corporations for needed skill sets and organization abilities.D. Family support and finding the right people for the organization.

23. According to the Small Business Administration, about _____ of new firms with employees survive four years, and for owner-only firms this rate is _____ percent surviving four years. A. one-fourth; 30B. one-half; 75C. two-thirds; 50D. two-fifths; 60

24. A facility which offers subsidized space and business advice to companies in their earliest stages of operation is called a(n) A. small business administration center.B. franchise.C. small business development center.D. incubator.

25. What percent of firms getting help in incubators were still going at four years? A. 50B. 81C. 66D. 87

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26. _____ are the offices co-sponsored by states and the federal government, that offer free or low-cost help to existing and potential small businesses. A. Small Business Development CentersB. Small Business Administration OfficesC. Research and Outreach ServicesD. Occupational structures

27. The U.S. government agency that helps people start business is the A. Small Business Administration.B. U.S. Department of Business Development.C. Department of Business Development.D. U.S. Entrepreneurial Administration.

28. The Small Business Administration categorizes a business in the U.S. as small, if it has fewer than _____ employees. A. 50B. 500C. 300D. 1,000

29. Among SMEs, medium enterprises have _____ people. A. 51-500B. 251-500C. 1-50D. 1-20

30. A business owned by an individual or small group is referred to as a(n) A. franchise.B. incubator.C. team-dependent business.D. independent small business.

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31. _____ refers to constant or at least daily management of a business by its owner. A. Franchise.B. LicensingC. FranchisingD. Owner-management

32. A(n) _____ is one who profits from a business but is not involved in its day-to-day operations. A. incubatorB. absentee ownerC. owner-managerD. franchisor

33. Truly entrepreneurial businesses are characterized by _____, in their products, services, or business models. A. noveltyB. imitationC. experienceD. government subsidy

34. Small businesses are A. imitative in nature.B. characterized by novelty.C. described as being unique and distinctive.D. prepackaged businesses you buy or lease from a franchisor.

35. A prepackaged business bought, rented, or leased from a company is called a(n) A. incubator.B. imitative firm.C. franchise.D. novelty.

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36. A person who becomes an owner through inheriting or being given a stake in a family business is called a(n) A. founder.B. manager.C. heir.D. buyer.

37. People starting high-growth ventures A. require key market knowledge that focuses on their immediate marketplace and communities.B. focus on how to start small, with resources from the owner, family, and friends.C. need to know how to seek and obtain external financing.D. require a key type of knowledge of how to grow on the schedule set by and for the purposes of the owner.

38. The key market knowledge for a small business A. is to know how to seek and obtain external financing.B. focuses on its immediate marketplace and communities.C. is to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company.D. focuses on the need to know how to dominate the market and grow dramatically and quickly.

39. Which of the following is a characteristic of a small business? A. Preferred funding source is other people's moneyB. Focus is on efficiencyC. Approach to human resource is to professionalizeD. Delegation is essential

40. Which of the following is an attribute of a high-growth venture? A. When the firm is in trouble, it cuts costsB. Metastrategy is noveltyC. High-growth ventures grow when necessaryD. Delegation is difficult

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41. Identify the characteristic of a small business. A. When the firm is in trouble, it focuses on selling more products/servicesB. Approach to human resources is to professionalizeC. Focus is on effectivenessD. Metastrategy is imitation

42. Identify the characteristic of a high-tech venture. A. Owner's own money is the preferred funding sourceB. Focus is on efficiencyC. Delegation is essentialD. Sales are more important than marketing

43. Which of the following refers to the eventual size of the market, which can range from a small, local, or niche market to something used by millions or even billions? A. InnovativenessB. MindshareC. Potential for growthD. Occupational structure

44. Rating firms high or low on innovativeness and potential for growth helps identify the different types of businesses in what is called A. Dynamic Capitalism Typology.B. General Equilibrium Economics.C. Creative destruction.D. PICS Model of Entrepreneurship.

45. Identify the most numerous and widely available type of firm, ranging from low to moderate levels of innovation and growth. A. Resource constrained sectorB. Ambitious firm sectorC. Glamorous sectorD. Economic core sector

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46. Why are small businesses considered the economic core of society? A. They are high growth and high innovation firms.B. They are made up of franchises and multisite firms, who are generally not very innovative, but are designed for high levels of growth.C. They have lots of innovative ideas but lack the funds to bring them to market.D. They are the most numerous and most widely available type of firms.

47. According to the Dynamic Capitalism Typology, the glamorous sector A. consists of firms with high growth and high innovation.B. consists of the most numerous and most widely available type of firms.C. consists of franchises and multisite firms, with low to moderate innovation and high levels of growth.D. consists of firms high in innovation but low in growth rate due to a lack of resources.

48. Which of the following is an example of the glamorous sector? A. InventorsB. Fortune 500sC. Small businessesD. Franchises and multisite firms

49. All of the following relate to firms in the ambitious firm sector EXCEPT A. they are mostly franchises and multisite firms.B. they are characterized by low to moderate innovation.C. they are made up of inventors and research and development firms.D. they are designed for high levels of growth.

50. The resource constrained sector A. are firms that have low to moderate levels of innovation and growth.B. are high growth and high innovation firms.C. are firms that have lots of innovative ideas but lack the funds to bring them to market.D. are generally not very innovative, but are designed for high levels of growth.

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51. All of the following are the popular reward types for small business owners EXCEPT A. flexibility.B. power.C. income.D. growth.

52. Which of the following is a reward that is rarely mentioned by entrepreneurs? A. Building great wealthB. FlexibilityC. Continuing a family tradition in businessD. Personal growth

53. _____ rewards are what people get from facing and beating or learning from challenges. A. RecognitionB. FlexibilityC. IncomeD. Growth

54. These rewards refer to the money made from owning your own business. A. Growth rewardsB. Flexibility rewardsC. Income rewardsD. Performance rewards

55. For entrepreneurs, perhaps the most rapidly growing type of reward is _____ rewards. A. recognitionB. flexibilityC. incomeD. growth

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56. The ability of business owners to structure life in the way that suits their needs best refers to A. flexibility rewards.B. family rewards.C. growth rewards.D. wealth rewards.

57. Which of the following is NOT a myth about small businesses? A. There is not enough financing to start businesses.B. You need to make something if you are going to make money.C. You can never try again if you fail once.D. There is no flexibility when you own your own business.

58. Funding invested for a share of a firm or given as loans or credit from family, friends, and other businesses used to help start or grow a firm is known as A. committed capital.B. informal capital.C. mezzanine capital.D. formal social capital.

59. According to Sageworks, in 2008, amid a recession, which of the following represented the most profitable industries for small businesses? A. Manufacturing industriesB. Financial servicesC. Service industriesD. Software industries

60. According to the BRIE model, in order to start a business, you need all of these elements to come together EXCEPT A. boundary.B. resources.C. intention.D. experience.

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61. Which factor distinguishes a firm from the process of buying or selling or bartering we all do occasionally? A. ResourcesB. BoundaryC. IntentionD. Exchange

62. A business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or on the Internet are examples of a(n) A. exchange.B. resource.C. boundary.D. intention.

63. Resources A. include a business name or government registration.B. refer to moving goods or service to others in exchange for money.C. are the most frequently occurring element of the BRIE model.D. include the product or service to be offered.

64. Which is the most frequently occurring element of the BRIE model? A. IntentionB. BoundaryC. ExchangeD. Resources

65. The desire to start a business represents which element of the BRIE model? A. IntentionB. BoundaryC. ExchangeD. Resources

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66. The BRIE model can help an individual deal with one of the biggest hurdles in starting a business, which is A. getting resources.B. being inactive.C. setting boundaries.D. making an exchange.

67. According to the latest statistics, small businesses have created _____ percent of the new jobs. A. 75B. 25C. 50D. 95

68. The sequence or organization of jobs and careers in the economy refers to A. franchising.B. creative destruction.C. occupational structure.D. incubators.

69. The way newly created goods, services, or firms can hurt existing goods, services, or firms refers to A. franchising.B. creative destruction.C. occupational structure.D. incubators.

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70. Mandarin is a restaurant which has opened recently. People from all over town flock to Mandarin to find out how good it is. This gives a big boost to the restaurant's initial business. But it causes the other restaurants in the area to lose business temporarily. The way in which Mandarin hurts existing restaurants is an example of A. creative destruction.B. efficiency.C. innovative disruption.D. market penetration.

71. According to the U.S. Small Business Administration, small businesses generate _____ the number of patents per employee than big businesses. A. 13 to 14 timesB. about twiceC. 40 to 50 timesD. about half

72. A nation where the major forces for jobs, revenues and taxes come from farming or extractive industries like forestry, mining, or oil production is a(n) A. factor-driven economy.B. efficiency-driven economy.C. innovation-driven economy.D. competency-driven economy.

73. A nation where industrialization is becoming the major force providing jobs, revenues and taxes, and where minimizing costs while maximizing productivity is a major goal is a(n) A. factor-driven economy.B. efficiency-driven economy.C. innovation-driven economy.D. dynamic-driven economy.

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74. Innovation-driven economies A. are those where entrepreneurship becomes a key way to build the middle class.B. are nations where industrialization is becoming the major force providing jobs, revenues and taxes.C. are focused on high-value-added manufacturing but are marked by a very large service sector.D. are those where entrepreneurship is essential to helping build personal wealth and break the cycle of low-wage jobs.

75. Entrepreneurship levels in countries such as Germany, Israel, the Republic of Korea, and the United States average the lowest of the A. innovation-driven economies.B. efficiency-driven economies.C. factor-driven economies.D. competency-driven economies.

76. Which of the following statements about virtual instant global entrepreneurship (VIGE) is false? A. VIGE depends on using Web sites like eBay for products to quickly establish a global presence.B. Many VIGE sites offer procedures, services, and Web page templates which incorporate best practices for global trading.C. The VIGE approach produces large numbers of smaller-scale exporters.D. VIGE sites replace institutional procedures with personal contacts to help even the smallest small businesses go global.

77. Which aspect of entrepreneurship refers to being in-tune with one's market? A. EfficiencyB. CreationC. Customer-focusD. Growth

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78. The form of entrepreneurship in which a person or group own their own for-profit business is A. independent entrepreneurship.B. social entrepreneurship.C. public entrepreneurship.D. corporate entrepreneurship.

79. The entrepreneurial focus which refers to doing the most work with the fewest resources is A. innovation.B. creation.C. efficiency.D. customer-focus.

80. The entrepreneurial focus which looks at a new thing or a new way of doing things is A. customer-focus.B. innovation.C. creation.D. efficiency.

81. Public entrepreneurship A. focuses typically on customer-focus and innovation, bringing new products or services to market, or opening up new markets to your firm.B. involves creating new charitable and civic organizations which are financially self-sufficient.C. requires all four elements, and that is what makes small business so important as the role model for the other forms.D. involves revitalizing government agencies, so it tends to focus on the customer-focus and efficiency aspects of entrepreneurship.

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82. Identify the type of entrepreneurship which concentrates typically on innovation and customer-focus. A. Public entrepreneurshipB. Corporate entrepreneurshipC. Independent entrepreneurshipD. Social entrepreneurship

83. Which of the following best describes a corporate form of entrepreneurship? A. It is a form of entrepreneurship involving the creation of self-sustaining charitable and civic organizations.B. It is a form of entrepreneurship that involves revitalizing government agencies.C. It is a form of entrepreneurship in which a person or group owns their own for-profit business.D. It is a form of entrepreneurship which takes place in existing businesses around new products, services or markets.

84. Social entrepreneurship A. involves creating new charitable and civic organizations which are financially self-sufficient.B. involves bringing new products or services to market.C. involves a person or group who owns their own for-profit business.D. involves revitalizing government agencies.

85. This is the degree of attention your target market pays to your idea or organization. A. EfficiencyB. IdentityC. MindshareD. Growth

Scenario: Jamie Johnson and "For Kidz"Taking classes at a local university, Jamie heard a consistent theme from many professors, students, and parents in the community: "There is nothing for children in this rural area." Jamie always liked children and thought of starting a business "For Kidz" targeting children 12 and under.

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86. Where can Jamie go to get some help with his business idea? A. Small Business Development CenterB. U.S. Department of Commerce officeC. IncubatorD. Small Business Administration Center

87. If Jamie gets "For Kidz" up and running, he could be described as all of the following EXCEPT A. founder.B. owner-manager.C. independent small business.D. franchisor.

88. Given that "For Kidz" will be a small business in a rural area, which of the following characteristics would be true? A. Its focus should be on effectivenessB. The approach to human resources should be to professionalizeC. Metastrategy should be imitationD. It should grow when possible

89. Jamie should be aware that all of the following are myths about a small business EXCEPT A. there is not enough financing to start businesses.B. you need to make something if you are going to make money.C. you can never try again if you fail.D. the biggest hurdle facing an individual considering a business opportunity is inaction.

90. In order to start "For Kidz" successfully, Jamie needs all of the following elements to come together EXCEPT A. boundary.B. recruitment.C. intention.D. exchange.

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Essay Questions

91. Define small business. Differentiate between small businesses and high-growth ventures.

92. Briefly describe the three universally mentioned and four rarely mentioned rewards.

93. What are the most common myths about small businesses? What are the realities? Explain.

94. Briefly describe the BRIE model.

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95. What roles do small businesses play in new jobs? Explain.

96. What is creative destruction? Explain with an example.

97. What is a factor-driven economy?

98. What is VIGE? Explain.

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99. What are the different aspects of entrepreneurship according to the PICS Model of Entrepreneurship?

100. What are the four forms of entrepreneurship in the PICS Model of Entrepreneurship? Explain.

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Chapter 01 Small Business: Its Opportunities and Rewards Answer Key

True / False Questions

1. (p. 4) About half of the adults in the U.S. think about owning their own business, but only one person in 50 who thinks about it actually starts a business. FALSE

AACSB: AnalyticBloom's: KnowledgeDifficulty: MediumLearning Objective: 01-1

2. (p. 4) When thinking about owning their own business, one hurdle people need to overcome is taking the right action. TRUE

AACSB: AnalyticBloom's: KnowledgeDifficulty: EasyLearning Objective: 01-1

3. (p. 5) The U.S. government agency that helps people start businesses is the U.S. Department of Commerce. FALSE


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4. (p. 6) Imitative firms are defined as prepackaged businesses that are bought, rented, or leased from another company. FALSE


5. (p. 6) Truly entrepreneurial businesses are characterized by imitativeness in their products, services or business models. FALSE


6. (p. 7) Small businesses focus on effectiveness whereas high-growth ventures focus on efficiency. FALSE


7. (p. 7) People starting high-growth ventures need to know how to seek and obtain venture capital. TRUE


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8. (p. 8) Nearly all entrepreneurs talk about three universally mentioned rewards: flexibility, fame, and fortune. FALSE


9. (p. 8) Growth rewards are what people get from facing and beating challenges. TRUE


10. (p. 9) Flexibility rewards refer to the money made from owning your own business. FALSE


11. (p. 9) More than 75 percent of the millionaires in the United States are entrepreneurs. TRUE


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12. (p. 10) Some of the problems faced by people who are thinking about starting small businesses are: (1) there is not enough financing to start businesses, and (2) they must make something to make money. TRUE


13. (p. 12) In order to start a business, you need four elements to come together: boundary, reason, idea, and exchange. FALSE


14. (p. 13) The most frequently occurring element of the BRIE model is the intention. TRUE


15. (p. 13) In the BRIE model, exchange refers to moving resources, products, or services to others in exchange for money or other resources. TRUE


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16. (p. 14) The BRIE model can help individuals with one of the biggest hurdles of starting a business, which are resources. FALSE


17. (p. 15) Small business is the engine of job generation, but it is important for existing jobs, too. TRUE

AACSB: Reflective ThinkingBloom's: ComprehensionDifficulty: MediumLearning Objective: 01-6

18. (p. 16) The high-growth ventures and big businesses would not succeed without small businesses offering supporting services. TRUE


19. (p. 19) The four forms of entrepreneurship are public, independent, corporate, and social. TRUE


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20. (p. 20) Public entrepreneurship is the form of entrepreneurship that involves revitalizing private agencies. FALSE


Multiple Choice Questions

21. (p. 4) According to the text, small business involves _____ people and has its owner managing the business on a day-to-day basis. A. 100-200B. 1-50C. between 200 to 500D. at least 500

Among SMEs, small enterprises have 1 to 50 people, while medium enterprises have 51 to 500 people.


22. (p. 4) Identify the two hurdles that people need to overcome to move from thinking about owning their own business to achieving it. A. Moving from inaction to action and taking the right action.B. Financing the business and government regulation.C. Experience from large corporations for needed skill sets and organization abilities.D. Family support and finding the right people for the organization.

There are two hurdles that people need to overcome to move from thinking to achieving. One of these is moving from inaction to action. The second hurdle is taking the right actions.

AACSB: AnalyticBloom's: KnowledgeDifficulty: HardLearning Objective: 01-1

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23. (p. 5) According to the Small Business Administration, about _____ of new firms with employees survive four years, and for owner-only firms this rate is _____ percent surviving four years. A. one-fourth; 30B. one-half; 75C. two-thirds; 50D. two-fifths; 60

The Small Business Administration reports that about two-thirds of new firms with employees survive four years, and for owner-only firms the rate is 50 percent surviving four years.


24. (p. 5) A facility which offers subsidized space and business advice to companies in their earliest stages of operation is called a(n) A. small business administration center.B. franchise.C. small business development center.D. incubator.

More than 81 percent of the clients of Small Business Development Centers were still going after five years, and 87 percent of firms getting help in incubators were still going at four years.


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25. (p. 5) What percent of firms getting help in incubators were still going at four years? A. 50B. 81C. 66D. 87



26. (p. 5) _____ are the offices co-sponsored by states and the federal government, that offer free or low-cost help to existing and potential small businesses. A. Small Business Development CentersB. Small Business Administration OfficesC. Research and Outreach ServicesD. Occupational structures



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27. (p. 5) The U.S. government agency that helps people start business is the A. Small Business Administration.B. U.S. Department of Business Development.C. Department of Business Development.D. U.S. Entrepreneurial Administration.

The Small Business Administration or SBA categorizes a business in the United States as small if it has fewer than 500 employees.


28. (p. 5) The Small Business Administration categorizes a business in the U.S. as small, if it has fewer than _____ employees. A. 50B. 500C. 300D. 1,000

The Small Business Administration categorizes a business in the United States as small if it has fewer than 500 employees. Among SMEs, small enterprises have 1 to 50 people, while medium enterprises have 51 to 500 people.


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29. (p. 5) Among SMEs, medium enterprises have _____ people. A. 51-500B. 251-500C. 1-50D. 1-20

The Small Business Administration categorizes a business in the United States as small if it has fewer than 500 employees. Among SMEs, small enterprises have 1 to 50 people, while medium enterprises have 51 to 500 people.


30. (p. 5) A business owned by an individual or small group is referred to as a(n) A. franchise.B. incubator.C. team-dependent business.D. independent small business.

Independent means that the business is owned by an individual or small group rather than existing as part of a larger enterprise or a business whose stock can be bought on an exchange.


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31. (p. 5) _____ refers to constant or at least daily management of a business by its owner. A. Franchise.B. LicensingC. FranchisingD. Owner-management

Owner-management refers to constant or at least daily management of a business by its owner.


32. (p. 5) A(n) _____ is one who profits from a business but is not involved in its day-to-day operations. A. incubatorB. absentee ownerC. owner-managerD. franchisor

It is possible to become an absentee owner, who profits from a business but is not involved in its day-to-day operations.


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33. (p. 6) Truly entrepreneurial businesses are characterized by _____, in their products, services, or business models. A. noveltyB. imitationC. experienceD. government subsidy

Novelty means something characterized by being different or new.


34. (p. 6) Small businesses are A. imitative in nature.B. characterized by novelty.C. described as being unique and distinctive.D. prepackaged businesses you buy or lease from a franchisor.

Small businesses are imitative in nature, with most small firms doing what other firms do, with only slight variations.

AACSB: Reflective ThinkingBloom's: ComprehensionDifficulty: EasyLearning Objective: 01-1

35. (p. 6) A prepackaged business bought, rented, or leased from a company is called a(n) A. incubator.B. imitative firm.C. franchise.D. novelty.

A franchise is a prepackaged business you buy or lease from a franchisor.


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36. (p. 6) A person who becomes an owner through inheriting or being given a stake in a family business is called a(n) A. founder.B. manager.C. heir.D. buyer.

Within the population of entrepreneurs, it is sometimes useful to split out certain groups. One of these consists of buyers, those who purchase an existing business, or of heirs, those who inherit or are given a stake in the family business.


37. (p. 7) People starting high-growth ventures A. require key market knowledge that focuses on their immediate marketplace and communities.B. focus on how to start small, with resources from the owner, family, and friends.C. need to know how to seek and obtain external financing.D. require a key type of knowledge of how to grow on the schedule set by and for the purposes of the owner.

The knowledge needed for a small business focuses on how to start small, with resources from the owner, family, and friends. A key type of knowledge would be how to grow on the schedule set by and for the purposes of the owner, not outside investors. The key market knowledge for a small business focuses on its immediate marketplace and communities.


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38. (p. 7) The key market knowledge for a small business A. is to know how to seek and obtain external financing.B. focuses on its immediate marketplace and communities.C. is to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company.D. focuses on the need to know how to dominate the market and grow dramatically and quickly.

People starting high-growth ventures need to know how to seek and obtain external financing, particularly venture capital. They also need to know how to dominate the market and grow dramatically and quickly, according to the schedule of investors or as the market will allow. High-growth venture founders would ultimately want to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company or set of investors.


39. (p. 7) Which of the following is a characteristic of a small business? A. Preferred funding source is other people's moneyB. Focus is on efficiencyC. Approach to human resource is to professionalizeD. Delegation is essential

Small businesses focus on efficiency whereas high-growth ventures focus on effectiveness.


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40. (p. 7) Which of the following is an attribute of a high-growth venture? A. When the firm is in trouble, it cuts costsB. Metastrategy is noveltyC. High-growth ventures grow when necessaryD. Delegation is difficult

High-growth ventures sell more when the firm is in trouble, grow when possible, and delegation is essential.

AACSB: Reflective ThinkingBloom's: ComprehensionDifficulty: HardLearning Objective: 01-2

41. (p. 7) Identify the characteristic of a small business. A. When the firm is in trouble, it focuses on selling more products/servicesB. Approach to human resources is to professionalizeC. Focus is on effectivenessD. Metastrategy is imitation

Small businesses cut costs when the firm is in trouble, their approach to human resources is to personalize, and their focus is on efficiency.


42. (p. 7) Identify the characteristic of a high-tech venture. A. Owner's own money is the preferred funding sourceB. Focus is on efficiencyC. Delegation is essentialD. Sales are more important than marketing

High-growth ventures prefer other people's money as the funding source, their focus is on effectiveness, and marketing is more important than sales.


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43. (p. 7) Which of the following refers to the eventual size of the market, which can range from a small, local, or niche market to something used by millions or even billions? A. InnovativenessB. MindshareC. Potential for growthD. Occupational structure

Potential for growth refers to the potential market size.


44. (p. 7) Rating firms high or low on innovativeness and potential for growth helps identify the different types of businesses in what is called A. Dynamic Capitalism Typology.B. General Equilibrium Economics.C. Creative destruction.D. PICS Model of Entrepreneurship.

Dynamic Capitalism Typology is a model of an economy categorizing businesses based on their innovativeness and growth rate.


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45. (p. 8) Identify the most numerous and widely available type of firm, ranging from low to moderate levels of innovation and growth. A. Resource constrained sectorB. Ambitious firm sectorC. Glamorous sectorD. Economic core sector

Small businesses form the economic core of our society because these are the most numerous and most widely available type of firm.


46. (p. 8) Why are small businesses considered the economic core of society? A. They are high growth and high innovation firms.B. They are made up of franchises and multisite firms, who are generally not very innovative, but are designed for high levels of growth.C. They have lots of innovative ideas but lack the funds to bring them to market.D. They are the most numerous and most widely available type of firms.

Small businesses form the economic core of our society because these are the most numerous and most widely available type of firm. Small businesses range from low to moderate levels of innovation and growth.


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47. (p. 8) According to the Dynamic Capitalism Typology, the glamorous sector A. consists of firms with high growth and high innovation.B. consists of the most numerous and most widely available type of firms.C. consists of franchises and multisite firms, with low to moderate innovation and high levels of growth.D. consists of firms high in innovation but low in growth rate due to a lack of resources.

The glamorous sector consists of firms with high growth and high innovation. These are among the most visible firms in the media.


48. (p. 8) Which of the following is an example of the glamorous sector? A. InventorsB. Fortune 500sC. Small businessesD. Franchises and multisite firms

The glamorous sector consists of high growth and high innovation firms, like firms in the Fortune 500.

AACSB: AnalyticBloom's: ApplicationDifficulty: MediumLearning Objective: 01-2

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49. (p. 8) All of the following relate to firms in the ambitious firm sector EXCEPT A. they are mostly franchises and multisite firms.B. they are characterized by low to moderate innovation.C. they are made up of inventors and research and development firms.D. they are designed for high levels of growth.

The resource constrained sector is made up of inventors and research and development firms which have lots of innovative ideas but lack the funds to bring them to market.


50. (p. 8) The resource constrained sector A. are firms that have low to moderate levels of innovation and growth.B. are high growth and high innovation firms.C. are firms that have lots of innovative ideas but lack the funds to bring them to market.D. are generally not very innovative, but are designed for high levels of growth.

The resource constrained sector, made up of inventors and research and development firms (and even universities) which have lots of innovative ideas but lack the funds to bring them to market.


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51. (p. 8) All of the following are the popular reward types for small business owners EXCEPT A. flexibility.B. power.C. income.D. growth.

There are social rewards that entrepreneurs mention less often than working people in general, which include the respect or admiration of others, or power over others, and family rewards, like continuing a family tradition in business.


52. (p. 8) Which of the following is a reward that is rarely mentioned by entrepreneurs? A. Building great wealthB. FlexibilityC. Continuing a family tradition in businessD. Personal growth

There are social rewards that entrepreneurs mention less often than working people in general, which include the respect or admiration of others, or power over others, and family rewards, like continuing a family tradition in business.


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53. (p. 8) _____ rewards are what people get from facing and beating or learning from challenges. A. RecognitionB. FlexibilityC. IncomeD. Growth

The three most popular types of rewards for small business owners are growth, flexibility, and income. Growth rewards are what people get from facing and beating or learning from challenges.


54. (p. 9) These rewards refer to the money made from owning your own business. A. Growth rewardsB. Flexibility rewardsC. Income rewardsD. Performance rewards

Income rewards refer to the money made from owning your own business. For more than three-quarters of entrepreneurs, this means seeking to match or slightly better the income you had before you started your own business.


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55. (p. 9) For entrepreneurs, perhaps the most rapidly growing type of reward is _____ rewards. A. recognitionB. flexibilityC. incomeD. growth

Flexibility rewards refer to the ability of business owners to structure their lives in the way that best suits their needs.


56. (p. 9) The ability of business owners to structure life in the way that suits their needs best refers to A. flexibility rewards.B. family rewards.C. growth rewards.D. wealth rewards.

Flexibility rewards are perhaps the most rapidly growing type of reward.


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57. (p. 10, 14) Which of the following is NOT a myth about small businesses? A. There is not enough financing to start businesses.B. You need to make something if you are going to make money.C. You can never try again if you fail once.D. There is no flexibility when you own your own business.

Small business is important for the individuals for whom income, growth, and flexibility were among the most important rewards of ownership.

AACSB: Reflective ThinkingBloom's: ComprehensionDifficulty: MediumLearning Objective: 01-4Learning Objective: 01-6

58. (p. 10) Funding invested for a share of a firm or given as loans or credit from family, friends, and other businesses used to help start or grow a firm is known as A. committed capital.B. informal capital.C. mezzanine capital.D. formal social capital.

At the beginning of the recession, the 2007 U.S. national report of the Global Entrepreneurship Monitor polled experts on entrepreneurship on the availability of funding for new ventures. The greatest availability was where we usually expect to find it, from family, friends, and other folk, collectively known as informal capital.


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59. (p. 11) According to Sageworks, in 2008, amid a recession, which of the following represented the most profitable industries for small businesses? A. Manufacturing industriesB. Financial servicesC. Service industriesD. Software industries

To make profits, you need to make something: In 2008, amid a recession, Sageworks reported that of the 10 most profitable industries for small businesses, 9 were services like dentists, tax preparers, mining support services, credit counselors, insurance brokers, and legal and health practitioners.


60. (p. 12) According to the BRIE model, in order to start a business, you need all of these elements to come together EXCEPT A. boundary.B. resources.C. intention.D. experience.

In order to start a business, you need four elements to come together—boundary, resources, intention, and exchange.


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61. (p. 12) Which factor distinguishes a firm from the process of buying or selling or bartering we all do occasionally? A. ResourcesB. BoundaryC. IntentionD. Exchange

A boundary can be something as simple as a business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or even on the Internet.


62. (p. 12) A business name or government registration, a phone or e-mail address dedicated to the business, or a specific location for the firm in a home, commercial space, or on the Internet are examples of a(n) A. exchange.B. resource.C. boundary.D. intention.

A business needs the benefits of a boundary—something that sets it up as a firm, and sets it off from the buying or selling or bartering we all do occasionally.


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63. (p. 13) Resources A. include a business name or government registration.B. refer to moving goods or service to others in exchange for money.C. are the most frequently occurring element of the BRIE model.D. include the product or service to be offered.

Resources include the product or service to be offered, informational resources on markets and running a business, financial resources, and human resources such as your own time to devote to the business, or that of others working with you or for you.


64. (p. 13) Which is the most frequently occurring element of the BRIE model? A. IntentionB. BoundaryC. ExchangeD. Resources

Intention is the desire to start a business and is the most frequently occurring element of the BRIE model. The 44 percent of Americans who think about starting their own business are expressing their intentions.


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65. (p. 13) The desire to start a business represents which element of the BRIE model? A. IntentionB. BoundaryC. ExchangeD. Resources

Intention is the desire to start a business and is the most frequently occurring element of the BRIE model.


66. (p. 14) The BRIE model can help an individual deal with one of the biggest hurdles in starting a business, which is A. getting resources.B. being inactive.C. setting boundaries.D. making an exchange.

Even when people know taking action would be in their own best interests, most people tend to procrastinate, sticking with inaction or doing familiar things that have not worked.


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67. (p. 15) According to the latest statistics, small businesses have created _____ percent of the new jobs. A. 75B. 25C. 50D. 95

In the latest statistics, small businesses created 75 percent of the 3.4 million new jobs created.


68. (p. 15) The sequence or organization of jobs and careers in the economy refers to A. franchising.B. creative destruction.C. occupational structure.D. incubators.

The occupational structure results in your becoming a small business owner.


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69. (p. 15) The way newly created goods, services, or firms can hurt existing goods, services, or firms refers to A. franchising.B. creative destruction.C. occupational structure.D. incubators.

Small business is a key element of every nation's economy because it offers a very special environment in which the new can come into being. Austrian economist Joseph Schumpeter labeled this process creative destruction.


70. (p. 15) Mandarin is a restaurant which has opened recently. People from all over town flock to Mandarin to find out how good it is. This gives a big boost to the restaurant's initial business. But it causes the other restaurants in the area to lose business temporarily. The way in which Mandarin hurts existing restaurants is an example of A. creative destruction.B. efficiency.C. innovative disruption.D. market penetration.

Creative destruction refers to the way that newly created goods, services, or firms can hurt existing goods, services, or firms.

AACSB: AnalyticBloom's: ApplicationDifficulty: HardLearning Objective: 01-6

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71. (p. 15) According to the U.S. Small Business Administration, small businesses generate _____ the number of patents per employee than big businesses. A. 13 to 14 timesB. about twiceC. 40 to 50 timesD. about half

The U.S. Small Business Administration reports that among firms that hold one or more patents, small businesses generate 13 to 14 times the number of patents per employee than do big businesses. The patents produced in those small businesses are twice as likely to be among the top 1 percent of all patents cited by others.


72. (p. 18) A nation where the major forces for jobs, revenues and taxes come from farming or extractive industries like forestry, mining, or oil production is a(n) A. factor-driven economy.B. efficiency-driven economy.C. innovation-driven economy.D. competency-driven economy.

In factor-driven economies, entrepreneurship is essential to helping build personal wealth and breaking the cycle of low-wage jobs, and entrepreneurship levels are very high.


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73. (p. 18) A nation where industrialization is becoming the major force providing jobs, revenues and taxes, and where minimizing costs while maximizing productivity is a major goal is a(n) A. factor-driven economy.B. efficiency-driven economy.C. innovation-driven economy.D. dynamic-driven economy.

As economies develop and go beyond basic manufacturing to a more industrialized economy, it is called an efficiency-driven economy.


74. (p. 18) Innovation-driven economies A. are those where entrepreneurship becomes a key way to build the middle class.B. are nations where industrialization is becoming the major force providing jobs, revenues and taxes.C. are focused on high-value-added manufacturing but are marked by a very large service sector.D. are those where entrepreneurship is essential to helping build personal wealth and break the cycle of low-wage jobs.

Innovation-driven economies are focused on high-value-added manufacturing but are marked by a very large service sector, providing high-end services to not only the resident population, but also for export.


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75. (p. 18) Entrepreneurship levels in countries such as Germany, Israel, the Republic of Korea, and the United States average the lowest of the A. innovation-driven economies.B. efficiency-driven economies.C. factor-driven economies.D. competency-driven economies.

Innovation-driven economies are focused on high-value-added manufacturing but are marked by a very large service sector, providing high-end services to not only the resident population, but also for export.


76. (p. 19) Which of the following statements about virtual instant global entrepreneurship (VIGE) is false? A. VIGE depends on using Web sites like eBay for products to quickly establish a global presence.B. Many VIGE sites offer procedures, services, and Web page templates which incorporate best practices for global trading.C. The VIGE approach produces large numbers of smaller-scale exporters.D. VIGE sites replace institutional procedures with personal contacts to help even the smallest small businesses go global.

VIGE sites replace personal contacts with institutional procedures to help even the smallest small businesses go global.

AACSB: Use Of Information TechnologyBloom's: ComprehensionDifficulty: MediumLearning Objective: 01-6

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77. (p. 19) Which aspect of entrepreneurship refers to being in-tune with one's market? A. EfficiencyB. CreationC. Customer-focusD. Growth

Customer-focus is the entrepreneurial focus which refers to being in tune with one's market.


78. (p. 19) The form of entrepreneurship in which a person or group own their own for-profit business is A. independent entrepreneurship.B. social entrepreneurship.C. public entrepreneurship.D. corporate entrepreneurship.

In independent entrepreneurship, all four elements are essential, and that is what makes small business so important as the role model for the other forms.


79. (p. 19) The entrepreneurial focus which refers to doing the most work with the fewest resources is A. innovation.B. creation.C. efficiency.D. customer-focus.

Efficiency refers to doing the most work with the fewest resources.


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80. (p. 19) The entrepreneurial focus which looks at a new thing or a new way of doing things is A. customer-focus.B. innovation.C. creation.D. efficiency.

Innovation looks at a new thing or a new way of doing things.


81. (p. 20) Public entrepreneurship A. focuses typically on customer-focus and innovation, bringing new products or services to market, or opening up new markets to your firm.B. involves creating new charitable and civic organizations which are financially self-sufficient.C. requires all four elements, and that is what makes small business so important as the role model for the other forms.D. involves revitalizing government agencies, so it tends to focus on the customer-focus and efficiency aspects of entrepreneurship.

Public entrepreneurship involves revitalizing government agencies, so it tends to focus on the customer-focus and efficiency aspects of entrepreneurship.


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82. (p. 20) Identify the type of entrepreneurship which concentrates typically on innovation and customer-focus. A. Public entrepreneurshipB. Corporate entrepreneurshipC. Independent entrepreneurshipD. Social entrepreneurship

In corporate entrepreneurship, the focus is typically on customer-focus and innovation, bringing new products or services to market, or opening up new markets to your firm.


83. (p. 20) Which of the following best describes a corporate form of entrepreneurship? A. It is a form of entrepreneurship involving the creation of self-sustaining charitable and civic organizations.B. It is a form of entrepreneurship that involves revitalizing government agencies.C. It is a form of entrepreneurship in which a person or group owns their own for-profit business.D. It is a form of entrepreneurship which takes place in existing businesses around new products, services or markets.

In corporate entrepreneurship, the focus is typically on customer-focus and innovation, bringing new products or services to market, or opening up new markets to your firm.


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84. (p. 20) Social entrepreneurship A. involves creating new charitable and civic organizations which are financially self-sufficient.B. involves bringing new products or services to market.C. involves a person or group who owns their own for-profit business.D. involves revitalizing government agencies.

Social entrepreneurship on the other hand involves creating new charitable and civic organizations which are financially self-sufficient, or for-profit companies that use much of their profit to fund charities.


85. (p. 20) This is the degree of attention your target market pays to your idea or organization. A. EfficiencyB. IdentityC. MindshareD. Growth

Innovation-driven entrepreneurs are often as interested in having their idea used or known—called mindshare —as making money.


Scenario: Jamie Johnson and "For Kidz"Taking classes at a local university, Jamie heard a consistent theme from many professors, students, and parents in the community: "There is nothing for children in this rural area." Jamie always liked children and thought of starting a business "For Kidz" targeting children 12 and under.

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86. (p. 5) Where can Jamie go to get some help with his business idea? A. Small Business Development CenterB. U.S. Department of Commerce officeC. IncubatorD. Small Business Administration Center

The Small Business Development Center includes offices co-sponsored by states and the federal government that offer free or low-cost help to existing and potential small businesses.


87. (p. 6) If Jamie gets "For Kidz" up and running, he could be described as all of the following EXCEPT A. founder.B. owner-manager.C. independent small business.D. franchisor.

A franchise is a prepackaged business you buy or lease from a franchisor.


88. (p. 7) Given that "For Kidz" will be a small business in a rural area, which of the following characteristics would be true? A. Its focus should be on effectivenessB. The approach to human resources should be to professionalizeC. Metastrategy should be imitationD. It should grow when possible

Options a, b, and d pertain to high-growth ventures.


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89. (p. 10, 14) Jamie should be aware that all of the following are myths about a small business EXCEPT A. there is not enough financing to start businesses.B. you need to make something if you are going to make money.C. you can never try again if you fail.D. the biggest hurdle facing an individual considering a business opportunity is inaction.

The BRIE model can help you deal with one of the biggest hurdles to starting a business. According to the experts, the biggest problem is simply inaction.


90. (p. 12) In order to start "For Kidz" successfully, Jamie needs all of the following elements to come together EXCEPT A. boundary.B. recruitment.C. intention.D. exchange.

In order to start a business, you need four elements to come together—boundary, resources, intention, and exchange.


Essay Questions

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91. (p. 5-7) Define small business. Differentiate between small businesses and high-growth ventures.

The U.S. Small Business Administration or SBA categorizes a business in the United States as small if it has fewer than 500 employees. Both small businesses and high-growth ventures may be small when they start. However, small businesses are usually intended to remain small, generally a size that the owner feels comfortable controlling personally. High-growth ventures start small but are intended to grow rapidly, often requiring a team of partners or managers to handle the growth. The differences between small businesses and high-growth ventures are not just semantic. They are fundamental.People starting high-growth ventures need to know how to seek and obtain external financing, particularly venture capital. They also need to know how to dominate the market and grow dramatically and quickly, according to the schedule of investors or as the market will allow. High-growth venture founders would ultimately want to know how to cash out through the sale of an initial public offering of stock or through the sale of the company to a larger company or set of investors.The knowledge needed for a small business focuses on how to start small, with resources from the owner, family, and friends. A key type of knowledge would be how to grow on the schedule set by and for the purposes of the owner, not outside investors. The key market knowledge for a small business focuses on its immediate marketplace and communities. Knowing about how to achieve maximum flexibility while pursuing a comfortable level of sales, growth, and profit is also part of this outlook. This flexibility might be used to return something to the community, to become totally invested in the product or service, to have time to spend with one's family or on one's self, or some other purpose.


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92. (p. 8-9) Briefly describe the three universally mentioned and four rarely mentioned rewards.

Nearly all entrepreneurs talk about three key rewards—flexibility, a livable income, and personal growth. There are two other rewards—building great wealth and creating products, which entrepreneurs mention more often than working people in general. There are also rewards that entrepreneurs mention less often than working people in general. These are social rewards, like the respect or admiration of others, or power over others, and family rewards, like continuing a family tradition in business.The three most popular types of rewards for small business owners are growth, flexibility, and income. Growth rewards are what people get from facing and beating or learning from challenges.Income rewards refer to the money made from owning your own business. For more than three-quarters of entrepreneurs, this means seeking to match or slightly better the income you had before you started your own business.Flexibility rewards are perhaps the most rapidly growing type of reward. They refer to the ability of business owners to structure their lives in the way that best suits their needs.


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93. (p. 9-11) What are the most common myths about small businesses? What are the realities? Explain.

For years potential entrepreneurs have mentioned problems like these:1. Not enough financing.2. You can't start businesses during a recession.3. To make profits, you need to make something.4. If you fail, you can never try again.5. Students don't have the skills to start a business.1. Not enough financing: At the beginning of the recession, experts were polled on entrepreneurship and the availability of funding for new ventures. They reported it as moderately good. The greatest availability was from family, friends, and other folk, collectively known as informal capital. A 2008 NFIB survey of business owners concluded, "An absence of finance is practically never mentioned as a reason for reducing investment" by current owners of business. So the money is out there, from friends, family, and your own pockets to startup, and from banks and angels as you are operating—if you can make the case for it.2. You cannot start businesses during a recession: Businesses started in recessions start lean—no fancy offices, no bonuses. That means they learn from the start how to do more with less, which makes them better able to handle future times of scarcity and trouble. According to a 2009 BusinessWeek report, seven of the ten largest companies in the 2009 Fortune 500 were started in recessions.3. To make profits, you need to make something: In 2008, amid a recession, Sageworks reported that of the 10 most profitable industries for small businesses, 9 were services like dentists, tax preparers, mining support services, credit counselors, insurance brokers, and legal and health practitioners. Whereas getting a DDS or MD degree takes years and tens of thousands of dollars, bookkeeping and credit counseling require little specialized training.4. If you fail, you can never try again: If you close a business and pay off your debts, you did not fail. If you learned how to do better next time, then you can honestly say you have paid for another piece of your education. A large number of today's successful entrepreneurs had failures along the way.5. Students (or moms or some other group) do not have the skills to start a business: It would be hard for an undergraduate to open a medical practice, but lots of students have useful business skills. If you are a student, you probably have a good idea what other students want to buy or have. That is the start of a retail business with a student market. If you have negotiating skills, the sky is the limit in retail and wholesaling, especially for products you already understand. In fact, you may have high-level but undocumented skills in developing Web sites or programming. Any mompreneur has managed a household, negotiated for family purchases, and solved thousands of problems ranging from broken equipment to angry family members.

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94. (p. 12-14) Briefly describe the BRIE model.

In order to start a business, you need four elements to come together—boundary, resources, intention, and exchange. This is referred to as the BRIE model.Business needs the benefits of a boundary—something that sets it up as a firm, and sets it off from the buying or selling or bartering we all do occasionally. Having a boundary gives you a place to locate and protect the resources you've gathered for the business. Resources include the product or service to be offered, informational resources on markets and running a business, financial resources, and human resources such as your own time to devote to the business, or that of others working with you or for you. Intention is the desire to start a business and is the most frequently occurring element of the BRIE model. Those 44 percent of Americans who think about starting their own business are expressing their intentions. Exchange is also needed. This refers to moving resources, goods, or service to others, in exchange for money or other resources. If the firm doesn't exchange with its environment, there is no "business" taking place.The BRIE model factors outline the activities that need to take place to get a firm going. The BRIE model can help you deal with one of the biggest hurdles to starting a business. According to the experts, the biggest problem is simply inaction as mentioned earlier.


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95. (p. 14-15) What roles do small businesses play in new jobs? Explain.

Small business has added tens of millions of jobs. In the latest statistics, small businesses created 75 percent of the 3.4 million new jobs created. Small business start-ups in the first two years of operation accounted for virtually all the net new jobs in America. Small business is the engine of job generation, but it is important for existing jobs, too.Small businesses employ more than half of all Americans, providing wages, salaries, and the taxes those working people pay the government. Aiming for self-employed occupations like dentistry, building inspection, plumbing, or farming means also choosing to go into small business. It is that way because those occupations are structured that way. The same is true when you decide to go into the family business—the occupational structure results in your becoming a small business owner.Small businesses are also a key employer because they are more willing than most large businesses to offer jobs to people with atypical work histories or needs, like people new to the workforce, people with uneven employment histories, and people looking for part-time work. These employment issues are at the core of what makes small business attractive to local and state governments.


96. (p. 15) What is creative destruction? Explain with an example.

Small business is a key element of every nation's economy because it offers a very special environment in which the new can come into being. Austrian economist Joseph Schumpeter labeled this process creative destruction. It refers to the way that newly created goods, services, or firms can hurt existing goods, services, or firms.For example, when a new restaurant opens in your neighborhood, people flock to it to find out what it's like. This helps the new restaurant, but it also causes the other restaurants in the area to lose business, at least temporarily.


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97. (p. 18) What is a factor-driven economy?

A factor-driven economy is a nation where the major forces for jobs, revenues and taxes come from farming or extractive industries like forestry, mining, or oil production. In nations where there is little manufacturing, most industry relates to farming and extracting raw materials, such as mining and forestry. In these factor-driven economies such as Angola, India, and Bolivia, entrepreneurship is essential to helping build personal wealth and breaking the cycle of low-wage jobs, and entrepreneurship levels are very high.


98. (p. 19) What is VIGE? Explain.

One approach that has grown dramatically in the past 15 years is using ecommerce, particularly auction sites like eBay, to handle global trade. The formal title for this is virtual instant global entrepreneurship (VIGE). VIGE depends on using Web sites like eBay (for products) or eLance (for services) to quickly establish a global presence. Many of these VIGE sites offer procedures, services, and Web page templates which incorporate best practices for global trading. The VIGE site provides the assurance of honesty on the part of buyers and sellers, using rules, warrantees, and most of all, mutual ratings of buyers and sellers. The VIGE approach produces large numbers of smaller-scale exporters. VIGE sites replace personal contacts with institutional procedures to help even the smallest small businesses go global.


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99. (p. 19) What are the different aspects of entrepreneurship according to the PICS Model of Entrepreneurship?

The four forms of entrepreneurship differ in which aspect of entrepreneurship they focus: creation which looks at the making of new entities, customer-focus which refers to being in-tune with your market, efficiency which refers to doing the most work with the fewest resources, and innovation which looks at a new thing or a new way of doing things.


100. (p. 19-20) What are the four forms of entrepreneurship in the PICS Model of Entrepreneurship? Explain.

In addition to the creation of independent new small firms, entrepreneurship is present in much of the growth of big corporations, government, and even the charitable sectors. These are called the four forms of entrepreneurship — public, independent, corporate, and social, or the PICS Model of Entrepreneurship.The four forms differ in which aspect of entrepreneurship they focus: creation, customer-focus, efficiency, and innovation.In independent entrepreneurship, all four elements are essential, and that is what makes small business so important as the role model for the other forms.Public entrepreneurship involves revitalizing government agencies, so it tends to focus on the customer-focus and efficiency aspects of entrepreneurship. Independent entrepreneurship involves all four elements, while in corporate entrepreneurship, the focus is typically on customer-focus and innovation, bringing new products or services to market, or opening up new markets to your firm.Social entrepreneurship on the other hand involves creating new charitable and civic organizations which are financially self-sufficient, or for-profit companies that use much of their profit to fund charities. In social entrepreneurship, the key elements involve creation, efficiency, and customer-focus.


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