Deck 2: Mini Constructing a Successful Business Plan

Question 1

When investors read a business plan, which of the following key points would MOST likely entice them to consider investing in the company?

A)business's purpose
B)strategies to reduce expenses
C)anticipated profitability
D)an unusual product

Answer 1

C

Question 2

Robyn's business has an expiring patent that could negatively affect her ability to secure investors. In which section of the business plan should Robyn disclose the expiring patent information?

A)Robyn should include it in the executive summary.
B)Robyn should include it in the company and management team section.
C)Robyn should include it in the sales and promotion section.
D)Robyn should not mention the expiring patent because it hasn't expired yet.

Answer 2

B

Question 3

Which of the following statements is MOST correct about the writing of business plans?

A)Smart entrepreneurs tend to write business plans before they start businesses.
B)Smart entrepreneurs tend to write business plans one month after staring businesses.
C)Smart entrepreneurs do not write business plans.
D)Smart entrepreneurs write business plans at different times.

Answer 3

D

Question 4

A potential investor wants to know if the proposed auto body shop will be offering warranties on its service. In which section of the business plan should the investor look?

A)product
B)appendices
C)sales and promotion
D)company profile and strategy

Question 5

What should a potential owner do BEFORE writing a business plan?

A)determine whether personal goals and business goals are aligned
B)ensure that the key components of the plan will be addressed
C)determine the best location and pricing structure for the business
D)make sure there is enough information to prepare financial statements

Question 6

The following are all components of a business plan EXCEPT ________.

A)the chapter summary
B)product descriptions
C)sales and promotion details
D)the table of contents

Question 7

Rick's business plan cover sheet includes basic company information, the month and year of the business plan, and the names of the people who prepared his plan. What key information did Rick not include on the cover sheet?

A)brief description of the business
B)unique record number
C)brief description of the owner(s)
D)the mission statement

Question 8

Which section contains an analysis of whether there will be enough customers to purchase the product in the future?

A)market research
B)market investment
C)competitive assessment
D)promotional plan

Question 9

Which of the following points does the existence of a business plan demonstrate?

A)The business process has been carefully planned.
B)The business will be financially successful.
C)The business fulfills an important market need.
D)The business has full-time employees.

Question 10

The following are all key elements in the company and management team section of the business plan EXCEPT ________.

A)description of which companies will provide the materials to manufacture the product
B)explanation of what economic trends are emerging and how they will affect future growth
C)description, if applicable, of the board members for the business
D)explanation of why the business has the unique opportunity to impact the industry

Question 11

Which of the following statements is TRUE about the components of a business plan?

A)Potential business owners can use a common template to write a business plan because all plans share the same components.
B)Business plans all have the same key components; however, some may be included in a different order.
C)All business plans discuss the specific product before analyzing how the product fits the market.
D)All business plans are different depending on the business; however, most have components in common.

Question 12

Troy has included a cover sheet and table of contents in his business plan. What should he include next?

A)an explanation of the management team
B)an abbreviated form of the entire business plan
C)an analysis of the market in which the business will operate
D)detailed information about the company's financial history

Question 13

Lucia needs to create financial projections for her executive summary. Which calculations should Lucia present to a potential investor in the executive summary?

A)expected growth rate
B)predicted future profits
C)projected yearly sales
D)all of the above

Question 14

When investors read an executive summary, they usually look for all of the following EXCEPT ________.

A)the business's purpose
B)details about the pricing of company products
C)information about the business's operating methods
D)anticipated profitability of the business

Question 15

Which of the following entrepreneurs would MOST likely start their business as quickly as possible, spending little time on a business plan?

A)Madison is starting a business to provide makeshift shelters to natural disaster victims.
B)Stacia is starting a housecleaning business for working couples with children.
C)Danisha is starting a personal coaching business for senior high school girls wanting to be computer software developers.
D)Luke is starting a café business that will operate from 11pm to 3am Monday through Thursday.

Question 16

In which section of a business plan would you find a statement that another company charges more money for a similar product?

A)executive summary
B)market analysis
C)product
D)sales and promotion

Question 17

When writing a market analysis of your business plan, you should include all of the following EXCEPT ________.

A)explanation of the advantage of using business's product or service
B)identification of age and location of potential customers
C)description of methods that will be used to promote the business
D)description of the potential growth for the good or service

Question 18

Which of the following provides the correct order for the below business plan sections? I. appendices
II) the product
III) the company and management team
IV) sales and promotion

A)II, I, III, IV
B)II, III, IV, I
C)III, II, IV, I
D)IV, III, II, I

Question 19

A well-written business plan can help an entrepreneur with all the following EXCEPT ________.

A)applying for a bank loan to start or expand a business
B)getting feedback from customers on the product or service
C)getting clear on business goals and objectives
D)identifying potential business profits for the next one to three years

Question 20

Which section of a business plan lists what a company thinks customers would be willing to pay for the merchandise?

A)financials
B)sales and promotion
C)product
D)market analysis

Question 21

What should NOT be stated in the financials section of the business plan?

A)length of time before investors receive revenue
B)amount of revenue to be paid to investors
C)total amount of money needed to operate business
D)total amount of compensation for employees

Question 22

Eva is planning to buy raw materials from an international supplier for her educational toy company. Where would she include this information in her business plan?

A)company profile
B)product
C)appendix
D)This information does not have to be included in the plan.

Question 23

An exit strategy is often included in the financial section of a business plan.

Question 24

All of the following are included within the business plan BEFORE the appendices EXCEPT ________.

A)marketing strategy
B)professional references
C)core production strategy
D)table of contents

Question 25

Information on personnel recruitment belongs in the management team section of the business plan.

Question 26

"Indulge and treat yourself to a luxurious day at Shasta Mountain Spa and experience rejuvenation and peace" is a competitive advantage statement.

Question 27

Dwayne is seeking financial assistance for his business and needs to include a statement of funding requirements in the business plan. The statement of funding requirement should include all of the following EXCEPT ________.

A)term of the loan
B)personal credit history
C)type of funding needed
D)amount of capital needed

Question 28

Even though it is a professional document filled with details and financial statements, it is important to capture the investor's attention by making the business plan interesting to read.

Question 29

First describe a potential business you would like to start. Then describe three ways a business plan could help you be more successful.

Question 30

The market analysis section is MOST often written before the sales and promotion section.

Question 31

The executive summary is so crucial that if it does not meet a potential investor's expectation, he or she might stop reading the plan and discard it.

Question 32

Denny is opening an antique business specializing in photography frames made before 1950. What research should Denny do for the sales and promotion section of his business plan?

A)He should find out how the frames were produced back in the 1950s.
B)He should hire a sales force to generate a buzz about the frames.
C)He should research industry trade show presentation costs and dates.
D)He should conduct research on his competitors' weaknesses.

Question 33

Zach plans to promote his fly fishing business through an aggressive Internet marketing campaign by utilizing search-engine optimization strategies. How should he incorporate the information in his business plan?

A)Zach should include the details in the market analysis section.
B)Zach should describe the campaign in the executive summary.
C)Zach should add this to the sales and promotion section.
D)Zach should not include this information in the business plan.

Question 34

Once a business has been operating for more than a year, it makes little sense to write a business plan if one has not been previously written.

Question 35

Gabby could not include the sales and promotion section in her business plan because this was a brand new product without any customer feedback.

Question 36

Companies should put their financials through a ________ by showing how they expect the business to perform in different situations.

A)budget test
B)cash flow test
C)dry run
D)stress test

Question 37

In which section of a business plan would you MOST likely find copies of trademarks?

A)company section
B)product or service
C)appendices
D)executive summary

Question 38

What is the purpose of the appendices in a business plan?

A)to provide additional information that adds to the credibility of your business plan
B)to summarize your business plan and to remind investors of the key points of the plan
C)to provide a summary of the projected income that has not been adequately provided within the plan
D)to provide key definitions for industry terms used in the plan as it will be read by non-industry experts

Question 39

Entrepreneurs must write their business plan before beginning their business.

Question 40

Entrepreneurs should prepare their own financial statements and NOT use financial software because they need to fully understand how the numbers were generated.

Question 41

Describe in a paragraph why a well-defined business plan may attract high-quality employees.

Question 42

You recently graduated from business school and you want to open up a small pizzeria in a large college town. There is a perfect space to lease for the pizzeria; however, a few doors down is a very well-established Italian restaurant that has been around since 1964. Their food has been legendary for all of those years. How would a market analysis help you decide if opening up the pizzeria near the restaurant would be a good idea or not?

Question 43

Steven wants to buy ten acres of land and start an organic farm near his home. He does not think that he has time to write a business plan. Describe three potential consequences of NOT writing a business plan.

Question 44

Imagine you just started a landscaping business in an area that gets very little rain each year. Your market research indicated that the homeowners would pay top dollar to beautify their lawns. Besides advertising in the newspaper or on the radio, name three ways you could promote the business.