Future Business Leaders of America (FBLA) Hospitality Management Practice Test

What type of business does an entrepreneur typically run?

1. A corporation with many employees

2. A nonprofit organization

3. A small or medium-sized business

4. A government agency

The correct answer is: A small or medium-sized business

An entrepreneur typically runs a small or medium-sized business. This is because entrepreneurs are often individuals who identify a market need and take the initiative to create and manage a business that fulfills that need. Small and medium-sized enterprises (SMEs) are commonly founded by entrepreneurs due to the lower barriers to entry, reduced operational costs, and the ability to innovate and adapt quickly to market demands. SMEs play a crucial role in driving economic growth, creating jobs, and fostering innovation, making them a common venture for entrepreneurs. In contrast, large corporations often require significant capital investment and extensive resources, which may not align with the entrepreneurial spirit of starting a business from a more grassroots level. Nonprofit organizations, while they can be established by entrepreneurs, function primarily for social, charitable, or community-focused purposes rather than profit generation. Government agencies are public sector entities focused on providing public services rather than operating as businesses in the entrepreneurial sense. Therefore, the small or medium-sized business model aligns most closely with the entrepreneurial pursuit.