INTRODUCTION TO ENTREPRENEURSHIP
DEFINITION OF ENTREPRENEURSHIP
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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has fewer benefits than an employee
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works in a larger company than an employee
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risks more than an employee
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earns less than an employee
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Detailed explanation-1: -Entrepreneurs face multiple risks such as bankruptcy, financial risk, competitive risks, environmental risks, reputational risks, and political and economic risks. Entrepreneurs must plan wisely in terms of budgeting and show investors that they are considering risks by creating a realistic business plan.
Detailed explanation-2: -Theorists Frank Knight and Peter Drucker defined entrepreneurship in terms of risk-taking. The entrepreneur is willing to put his or her career and financial security on the line and take risks in the name of an idea, spending time as well as capital on an uncertain venture.
Detailed explanation-3: -Entrepreneurs are comfortable with uncertainty. Risk aversion is a predictor of whether an individual will become an entrepreneur (low-risk aversion) or stay an employee (high-risk aversion.) Entrepreneurs take risks because they’re necessary to start and grow a business.
Detailed explanation-4: -Employees execute tasks while entrepreneurs plan. An employee can take work day by day, whereas an entrepreneur has to consider how well the tasks are being performed relative to the long-term plan for the business.