Deck 10: Preparing a Business Plan

Question 1

The income statement is called a "statement of financial position."

Answer 1

False

Question 2

Proof of concept (POC) tests all involve fieldwork with the customer that should have been accomplished during feasibility analysis.

Answer 2

True

Question 3

Submitting a professionally crafted business plan is less important than demonstrating what the entrepreneur has accomplished in the way of securing sales from real customers.

Answer 3

True

Question 4

A highly focused executive summary and pitch presentation are best developed from a completed business plan.

Question 5

An entrepreneur should strive to effectively "pitch" the essence of his or her business in

A) 15 seconds.
B) 30 seconds.
C) one minute.
D) two minutes.
E) five minutes.

Question 6

A _____ involves customer discovery and business model validation-testing your business model in the market with real customers to determine the conditions you must have in place to ensure a successful launch.

A) feasibility analysis
B) marketing plan
C) business plan
D) pitch presentation
E) business test

Question 7

Which of the following is considered the weakest proof of concept (POC) approach?

A) Purchase order
B) Final product
C) Letter of intent for beta test
D) Working prototype
E) Customer sales

Question 8

A(n) _____ depends on a validated business model that has been market-tested and is reliable.

A) feasibility study
B) pitch presentation
C) business plan
D) industry/market analysis
E) proof of concept (POC)

Question 9

Which of the following is NOT one of the principal concerns that anyone investing in a new venture has?

A) Customer acquisition
B) Protection
C) Return on investment
D) Rate of growth
E) Degree of risk

Question 10

Writing a business plan is a huge undertaking that should be planned in terms of tasks and a timeline.

Question 11

Which of the following words or phrases should an entrepreneur avoid using in an executive summary?

A) Core values
B) Scalable
C) Drinking the Kool-Aid
D) Core competency
E) All of these are correct.

Question 12

In addition to explaining the business model, an executive summary should include a well-thought-out summary financial plan with _____ to _____ years of projected revenues, expenses, cash flow, and headcount or personnel requirements at various milestones.

A) one; two
B) one; three
C) two; three
D) three; five
E) five; ten

Question 13

The marketing plan is quite similar to market analysis.

Question 14

The executive summary of a business plan should be no more than two pages.

Question 15

It is normally a good idea for the entrepreneur to discuss what he or she thinks the business is worth in a business plan.

Question 16

Entrepreneurs always start with the total available market (TAM), as opposed to the serviceable available market (SAM) and the serviceable obtainable market (SOM), because the TAM is easiest to calculate being simply the total size of the market for whatever the entrepreneur is selling.

Question 17

_____ are primarily interested in a company's margins and cash flow projections.

A) Lenders
B) Suppliers
C) Customers
D) Distributors
E) Strategic partners

Question 18

Recommendations for a successful pitch include all of the following EXCEPT

A) s tanding behind a podium.
B) m aintaining eye contact.
C) u sing colorful visual aids.
D) d oing a live demonstration of the product or service.
E) using minimal text in the slides.

Question 19

Which of the following is an important benefit of demonstrating proof of concept (POC) with a prototype?

A) Requisite technologies to create the final product can be developed early when technology resources are not in demand.
B) Changes in the prototype can be made early in the process when changes are less costly.
C) The prototype is an asset that can be used as collateral when securing financing for a loan.
D) It will indicate how much room there is for error between the cost to produce a product or deliver a service and the selling price.
E) Creating a prototype establishes an implicit patent on your product.

Question 20

The strongest product proof of concept (POC) is a working prototype.

Question 21

Which of the following is the formula for the current ratio?

A) Net income/Net sales
B) Total current assets/Total current liabilities
C) Net sales/Total current liabilities
D) Total current assets - Total current liabilities
E) Net income/Total current assets and liabilities

Question 22

In order to not incur the tremendous costs of purchasing equipment for a manufacturing plant, an entrepreneur may

A) plan a harvest strategy.
B) reduce the volume of production.
C) form a strategic alliance.
D) downsize the plant's operations.
E) take loans from lenders.

Question 23

The marketing plan includes all of the following EXCEPT

A) the location strategy for the business.
B) the market niche.
C) tools that will be used to reach the customer.
D) a media plan for specific marketing tools.
E) the business's identity.

Question 24

The _____ plan outlines the strategy that will be used to ensure that the business model is sustainable and continues to scale over its life.

A) operations
B) marketing
C) financial
D) growth
E) industry

Question 25

Which component of the business plan is used to include items such as résumés, calculations, and surveys that support your claims in the main body of the report?

A) Founding or management team
B) Endnotes
C) Timeline to launch
D) Appendices
E) Contingency plan and harvest strategy

Question 26

_____ is/are created when a business is adequately capitalized and has highly regarded investors; an experienced management team; customers; a unique technology, product, or service; the ability to continually innovate; and a rapidly expanding market.

A) Value
B) Economies of scale
C) Inventory turnover
D) Validation
E) A competitive advantage

Question 27

An executive summary should demonstrate a clear link between the _____ and the _____.

A) customer; market
B) founder; team
C) return on investment; cash flow
D) problem or pain;  solution
E) business; industry

Question 28

Bill is a lender and is considering a loan for Joann and her new business venture. Which of the following would NOT be one of Bill's concerns?

A) How the lender will be protected if the business doesn't meet its projections
B) The kind of positive impact the loan will have on the business
C) The number of strategic partners the venture has
D) The kinds of assets the business has for collateral that can be pledged as security for the loan
E) The entrepreneur's stake in the business

Question 29

Once a new venture has passed the startup stage, additional value is created by all of the following EXCEPT

A) its position in the market.
B) significant customers.
C) a low return on equity.
D) effective operating systems.
E) a strong gross margin.

Question 30

The _____ plan contains a detailed description of those processes that the new venture will own and undertake in-house and those that will be outsourced to a strategic partner.

A) operations
B) marketing
C) financial
D) growth
E) industry

Question 31

Which component of the business plan provides the timeline for completion of the prototype and final product or service?

A) I ndustry/market analysis
B) O perations plan
C) M arketing plan
D) P roduct/service development plan
E) Founding or management team

Question 32

All of the following are guidelines to consider when developing the executive summary EXCEPT

A) avoid puff words, phrases, and analogies.
B) read each sentence multiple times to prune unnecessary words and to make sure that the summary is focusing on the critical points.
C) avoid jargon and acronyms that might be foreign to the reader or listener.
D) include recognizable names if there is an established relationship with the person or company.
E) keep the pitch deck to about 10 slides that contain only the key points in large fonts.

Question 33

The higher the _____, the more liquid the company is and the more easily its assets can be converted to cash to pay off short-term obligations.

A) return on investment
B) inventory turnover
C) current ratio
D) profit margin
E) operating  cash inflows

Question 34

Which of the following is NOT a primary flaw that investors commonly find in business plans?

A) Overly optimistic financial projections
B) Lack of enthusiasm
C) Too much hype
D) Poor explanation of the business model
E) No demonstration of customer demand

Question 35

Entrepreneurs should keep in mind that the purpose for doing a(n) _____ is to sell the business.

A) prototype
B) executive summary
C) feasibility analysis
D) contingency plan
E) N one of these are correct.

Question 36

The _____ looks at the financial health of a business at a single point in time.

A) balance sheet
B) statement of cash flows
C) current ratio
D) profit margin
E) income statement

Question 37

The _____ plan is simply a way of recognizing that sometimes even the "best laid plans" don't work the way they were intended to work.

A) business
B) production
C) financial
D) contingency
E) growth

Question 38

Today, most investors want to see a well-written _____ that tells a compelling story and grabs their interest.

A) contingency plan
B) elevator speech
C) executive summary
D) proof of concept (POC)
E) marketing plan

Question 39

Which of the following uses net income and net sales from the income statement to give the percentage of each dollar of sales remaining after all costs of normal operations are accounted for?

A) R eturn on investment
B) I nventory turnover
C) Current ratio
D) Profit margin
E) Statement of cash flows

Question 40

The _____ provides information about the projected profit or loss status of a business for a specified period of time.

A) balance sheet
B) statement of cash flows
C) current ratio
D) profit margin
E) income statement

Question 41

What are the components of a busines s plan?

Question 42

Briefly describe the objectives of having a compelling executive summary and pitch.

Question 43

What are the four principal concerns of investors?

Question 44

What are the primary concerns of lenders when considering a business plan?

Question 45

Briefly explain the tasks that the founding team must undertake when preparing to write a business plan.

Question 46

List some guidelines to follow when developing an executive summary.

Question 47

Identify the type of questions that investors may ask the presentation team when pitching a new business. How should the presenter respond to these questions?

Question 48

What questions should be answered to create a compelling story for a highly focused executive summary?

Question 49

Briefly discuss the elements of a successful business plan presentation.

Question 50

Briefly explain what the Technology Readiness Level (TRL) is.