Deck 6: Planning, Organizing, and Managing a Small Business

Question 1

Which of the following are set by strategic planning?

A) Methods and procedures
B) Policies
C) Missions
D) Budgets

Answer 1

C

Question 2

The largest expense for companies selling products usually is related to:

A) human capital.
B) insurance.
C) materials, supplies, and/or goods.
D) advertising.

Answer 2

C

Question 3

_____ provide employees with standing instructions for performing their jobs, comprise detailed explanations of how to do the work properly, and in what order it should be done.

A) Methods and procedures
B) Policies
C) Budgets
D) Mission statements

Answer 3

A

Question 4

The SWOT analysis is used to:

A) select human resources.
B) restrict over-usage of physical capital.
C) formulate the mission of a company.
D) scan the business environment.

Question 5

_____ is the process of setting standards, measuring performance against standards, and taking corrective action to see that planned performance is achieved.

A) Planning
B) Organizing
C) Staffing
D) Controlling

Question 6

Strategic planning is likely to incorporate:

A) provision for low-cost financial security.
B) the selection process of employees.
C) preferential promotion of employees.
D) optimum usage of money.

Question 7

Which of the following is an example of operational planning of a company?

A) Formulating the mission statement
B) Setting the personnel policy
C) Selecting the type of business to enter
D) Determining the financial needs

Question 8

Financial planning involves:

A) estimating income and expenses.
B) choosing a product to sell.
C) selecting the type of business to enter.
D) deciding the market niche for the business.

Question 9

A software engineer is part of the company's _____ resources.

A) human
B) physical
C) financial
D) intangible

Question 10

_____is the process of setting objectives and devising courses of action to achieve those objectives.

A) Controlling
B) Planning
C) Organizing
D) Leading

Question 11

Which of the following is/are part of a company's financial resource?

A) Tools and equipment
B) Available equity
C) Reputation
D) Supervisors

Question 12

A business's _____ defines the present business scope and broadly describes an organization's present capabilities, focus, and activities.

A) budget
B) policy
C) operational plan
D) mission statement

Question 13

A change in the number of competitors of a firm leads to a change in the firm's:

A) internal environment.
B) strengths.
C) external environment.
D) competitive edge.

Question 14

The external environment of a SWOT analysis consists of:

A) strengths and weaknesses.
B) threats and weaknesses.
C) opportunities and threats.
D) opportunities and strengths.

Question 15

Raw materials used to produce products are:

A) variable expenses.
B) overhead expenses.
C) fixed expenses.
D) promotional expenses.

Question 16

Expenses that do not change in value as sales volume rise or fall are called _____.

A) variable expenses
B) fixed expenses
C) operating expenses
D) miscellaneous expenses

Question 17

_____ are general statements that serve to guide managerial decision making and supervisory activities.

A) Methods
B) Policies
C) Budgets
D) Procedures

Question 18

_____ set the requirements needed to follow the strategies and accomplish the objectives.

A) Methods
B) Policies
C) Procedures
D) Budgets

Question 19

_____should be the first management function performed.

A) Planning
B) Organizing
C) Staffing
D) Controlling

Question 20

_____ give a shorter-term direction to the business and serve as benchmarks for measuring performance.

A) Budgets
B) Objectives
C) Strategies
D) Missions

Question 21

Organizing should be the first management function performed as it sets the future course of action for all aspects of the business.

Question 22

_____ is the amount of money available at a given time to pay expenses.

A) Equity
B) Cash flow
C) Line of credit
D) Fixed capital

Question 23

The legal objectives are included in the operational planning process.

Question 24

SWOT analysis is a useful tool to aid the process of strategic planning and can be organized into the form of a matrix.

Question 25

An effective business plan should be about _____.

A) 25 to 30 pages long or less
B) 40 to 50 pages long
C) 50 to 65 pages long
D) 70 to 75 pages long or more

Question 26

Because planning for the future is so risky, not making a plan is the safest alternative.

Question 27

Matt plans to open a corner store. The startup cost is approximately $10,000. Since Matt has only $2,500 with him, he decides to invite two of his friends-Brett and Brian-to join him in this venture. Who should write the business plan in this scenario?

A) Only Brett and Brian-since they are contributing 75 percent of the initial investment
B) Matt, Brett, and Brian-it should be a team effort
C) It depends on who has paid the biggest share of the startup cost.
D) Matt alone, since it was primarily his business plan

Question 28

The _____ is the part of the business plan that outlines the entire plan, its major objectives and the expected results.

A) cover sheet
B) executive summary
C) table of contents
D) appendix

Question 29

The process of planning is time-consuming.

Question 30

The oral presentation of the business plan should be:

A) presented by an outside advisor.
B) delivered from the owner's perspective.
C) detailed in order to motivate employees.
D) validated by the market research findings.

Question 31

Strategic planning consists of two parts: the firm's mission and objectives, and its strategies.

Question 32

In a SWOT analysis, strengths and weaknesses are part of a company's external environment.

Question 33

Selecting the type of business to enter is an example of operational planning.

Question 34

In which part of the business plan should the expected revenues be included?

A) Financial data
B) Company background
C) Definition of the market
D) Management structure

Question 35

Mission statements should be revised frequently.

Question 36

Through equity financing, a company can be partly owned by the:

A) investors.
B) commercial banks.
C) microloan companies.
D) lenders.

Question 37

A business plan can be successfully prepared by:

A) adding overestimated values of expected revenues to attract investors.
B) establishing a long-term operational plan only for the current production process.
C) developing short-term detailed plans for everybody involved with the business.
D) removing the operational planning part and retaining only the strategic planning part.

Question 38

Controlling is the process of setting standards and measuring performance against standards.

Question 39

Which of the following statements regarding a business plan of a company is true?

A) It emphasizes operational planning more than strategic planning.
B) It is a money-raising tool to attract venture capitalists when the owner wants to assume more control over the company.
C) It usually provides big entrepreneurs a greater chance of success than the small business owners.
D) It provides a detailed design of activities to be carried to finance the business and market products.

Question 40

In order to maintain control, the owner should:

A) include securities dealers in the business to finance the startup costs.
B) use venture capital funds.
C) invest more personal funds than all other sources combined.
D) borrow funds for the startup capital from external lenders.

Question 41

Net profit is the total amount of revenue generated.

Question 42

The lesser time a small business owner devotes to the business, the more important it is to have capable employees.

Question 43

In developing a business plan, one should consider the firm's origins and background to attract investors.

Question 44

Simple start-up businesses do not need records and information systems.

Question 45

Expenses, such as depreciation on buildings are also known as variable expenses.

Question 46

Variable expenses rise in direct proportion to increase in sales volume.

Question 47

Internal environmental factors include clients, technology and competition.

Question 48

The external environment does not affect the operation of a small business.

Question 49

The business plan should be delivered from the entrepreneur's perspective, not the investor's.

Question 50

Objectives are the goals that give shorter-term direction to the business and serve
as benchmarks for measuring performance.

Question 51

Strategies are general statements that serve as short-term guides to managerial decision making.

Question 52

The executive summary outlines the entire business plan, its major objectives, how these objectives will be accomplished, and the expected results.

Question 53

Setting up the human resource management (HRM) objectives of a company is an example of an activity for strategic planning.

Question 54

A competitive edge is a particular characteristic that makes a firm more attractive to customers than are its rivals.

Question 55

Income from sales is also called revenue.

Question 56

A business plan is a tool for attracting people and money.

Question 57

Operational planning involves developing strategies to meet competition.

Question 58

Methods and procedures provide employees with standing instructions for performing their jobs.

Question 59

One important purpose of a business plan is to indicate the expected financial results from operations.

Question 60

If a business is to be organized and run by more than one person, preparing the business plan should be a team effort.

Question 61

Why are setting objectives important to a small business? Give an example.

Question 62

State three examples of strategic planning for a small business owner.

Question 63

What is a SWOT analysis and how is it used?

Question 64

What are the two important considerations involved in creating the mission and defining objectives for a small business? Explain how each gives a competitive edge to a small business.

Question 65

Explain the purpose and the use of a business's mission statement.

Question 66

How can strategies help a small business reach its mission?

Question 67

Describe operational planning.

Question 68

Why is planning so important to small business?

Question 69

What are the three types of planning that can improve a small business owner's chances for success?

Question 70

Explain the purpose of a business plan and enlist the key components of a written business plan.