Entrepreneurship Overview Guide 4

Question 1

What is the main purpose of an elevator pitch in entrepreneurship?

Accepted Answer

To concisely communicate a business idea's value proposition in 60–90 seconds

Answer

An elevator pitch is a brief, compelling summary of a business idea designed to spark interest in the time it takes to ride an elevator.

Question 2

When an entrepreneur conducts a 'feasibility study,' what is she primarily determining?

Accepted Answer

Whether the business concept is viable and can realistically succeed

Answer

A feasibility study evaluates technical, financial, market, and operational factors to determine if a proposed business idea has a reasonable chance of success.

Question 3

Which of the following is an example of a 'first-mover advantage'?

Accepted Answer

A company that enters a market first and gains brand recognition before rivals exist

Answer

First-mover advantage occurs when being the initial entrant in a market allows a company to establish brand loyalty, set industry standards, and control key resources before competitors arrive.

Question 4

What does 'scalability' mean for a startup business model?

Accepted Answer

The capacity to grow revenue significantly without a proportional increase in costs

Answer

A scalable business model can handle rapid growth in customers or revenue while keeping cost increases minimal, making it attractive to investors.

Question 5

In a partnership agreement, what does 'dissolution clause' typically address?

Accepted Answer

The conditions and process for ending the partnership

Answer

A dissolution clause specifies the circumstances—such as a partner's death, bankruptcy, or mutual agreement—that trigger the formal wind-down of the partnership.

Entrepreneurship Practice Test

Entrepreneurship Practice Test

Entrepreneurship Overview Guide 4