Deck 3: Creating an E-Business Plan

Question 1

The business planning process is dynamic and ongoing.

Answer 1

True

Question 2

A business plan is used to evaluate the feasibility of a new e-business.

Answer 2

True

Question 3

Creating and developing a business plan forces an entrepreneur to take a sharp look at his or her e-business idea.

Answer 3

True

Question 4

A formal business plan follows a rigid set of rules for its content and formatting.

Question 5

The goal of a business plan for a startup e-business is to help a reader clearly understand the e-business idea and when and how the e-business expects to become profitable.

Question 6

It is a good idea to number each copy of a business plan and to keep a list of who has each copy.

Question 7

Because it is important to have a professional-looking business plan, you must bind each copy with a custom cover.

Question 8

A business plan should have a table of contents that lists all the major plan sections and subsections by page number.

Question 9

The first step in preparing a business plan is to create its table of contents.

Question 10

The executive summary section is considered by many to be the most important section of a business plan because potential investors typically use it to quickly weed out those plans in which they have no interest.

Question 11

The minimum length for a business plan's executive summary is five pages.

Question 12

A business plan's marketplace analysis section should include information about the specific industry in which the business will operate.

Question 13

The products or services section of a business plan should identify a business's targeted customers and major competitors.

Question 14

An overview of major marketing objectives and strategies should be included in the marketplace analysis section of a business plan.

Question 15

The financial plan section of a business plan describes a business's physical location and equipment as well as the manufacturing or service actions necessary to get the business's products and services to customers.

Question 16

The operational plan section of a business plan created for an e-business should also contain information on the operations of its Web site and how online activities are integrated into overall operations.

Question 17

Pro forma (or projected) financial statements included in a business plan are based on current assumptions of future estimates of income, expense, and cash flow.

Question 18

A planned cash flow statement indicates the value of a business's assets, liabilities, and ownership equity at a specific point in time.

Question 19

A projected income statement shows a business's anticipated revenues, expenses, and net profit or loss over a specific period of time.

Question 20

The management plan section of a business plan includes information about a new business's key employees, advisors, mentors, and consultants.

Question 21

Outside advisors can be very important to a startup e-business because they add experience and business background that might be lacking in the management team.

Question 22

An issues analysis identifies both threats and opportunities a new e-business may encounter from outside influences such as economic changes, impending product innovations, technological advancements, and government regulations.

Question 23

Web site schematics and Web page descriptions, pictures of products or details about services, and other supporting information can be included in the market analysis section of a business plan.

Question 24

A startup e-business's key strategic partners can help it build market awareness and assist in its actual operations by providing services, such as product warehousing and shipping.

Question 25

A formal business planning document generally used to seek funding for startup operations is called a(n):

A) marketplace analysis
B) issues analysis
C) business plan
D) executive summary

Question 26

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

A) identifies customers and competitors
B) describes products and services
C) names the key management team members
D) All of the above

Question 27

Business planning is an ongoing process of:

A) selling products or services
B) setting goals and determining strategies to accomplish goals
C) attempting to secure financing from investors
D) A,B

Question 28

A comprehensive business plan can:

A) hide weaknesses in an e-business idea
B) guarantee the success of an e-business idea
C) find and exploit hidden strengths in an e-business idea
D) None of the above

Question 29

A business plan usually begins with a:

A) cover sheet and title page
B) table of contents
C) products and description section
D) exit strategy section

Question 30

Which of the following items is typically included on a business plan cover sheet?

A) list of products and services
B) a "Confidential" notation
C) names of the key management team members
D) contact numbers

Question 31

A business plan's table of contents lists:

A) the names of key management
B) the person receiving the copy of the plan
C) products and services to be offered
D) major sections and subsections of the plan by page number

Question 32

Which of the following techniques helps to create an effective executive summary?

A) using concrete facts to support predictions of success
B) using passive words
C) using ambiguous language
D) B,C

Question 33

The section of a business plan that provides brief and pertinent information about the original business idea, business history (if any), and the legal form the business takes is the:

A) executive summary
B) management plan
C) business description section
D) financial plan

Question 34

The products section of a business plan should:

A) describe each product in complete detail
B) include a complete product catalog with pictures
C) estimate the sales for each product
D) estimate the number of customers who might buy each product

Question 35

The section of a business plan that explains how a business's products and services are a good fit with the characteristics of its target market is the:

A) operational plan
B) marketplace analysis
C) products and services section
D) executive summary

Question 36

Any competitive advantages inherent in a business's physical location should be noted in a business plan's:

A) marketplace analysis
B) financial plan
C) operational plan
D) None of the above

Question 37

Information about the e-business model or models a startup e-business will follow should appear in a business plan's:

A) management plan
B) financial plan
C) executive summary
D) operational plan

Question 38

Which three items must be included in the financial plan section of a business plan?

A) pro forma balance sheet, projected income statement, and break-even analysis
B) projected income statement, cash flow statement, and ratio analysis
C) pro forma balance sheet, ratio analysis, and break-even analysis
D) pro forma balance sheet, projected income statement, and cash flow statement

Question 39

The financial plan section of a business plan:

A) explains how the business idea, goals, and strategies translate into profits
B) indicates the benefits consumers can expect to enjoy from the products or services to be offered
C) describes how key members of the management team can affect the success of the business
D) B,C

Question 40

The financial plan statement that projects what a business will own, what it will owe, and the equity its owners will have at a specific point of time in the future is the:

A) cash flow statement
B) projected income statement
C) pro forma balance sheet
D) standard business ratio analysis

Question 41

The financial plan section of a business plan typically includes:

A) monthly financial projections for 12-24 months
B) ten- to fifteen-year summary financial projections
C) a description of financial and economic assumptions underlying any estimates
D) a and c

Question 42

The financial plan section of a business plan may include:

A) a "deal plan" that lays out to investors how much capital you need and in what form
B) a list of key management team members and their background
C) a summary of the features and benefits of the products or services to be offered
D) a discussion of how products or services will be distributed

Question 43

Which of the following items is generally included in the management plan section of a business plan?

A) detailed resume for each top team member
B) a "deal plan" itemizing ownership in the business
C) a break-even analysis
D) a brief description of key employees, outside advisors, mentors, and consultants

Question 44

Which of the following factors are typically discussed in the issues statement section of a business plan?

A) potential changes in the economy
B) impending product innovations
C) barriers to entry into a marketplace
D) All of the above

Question 45

An explanation of how owners and investors can expect to get their money out of a new venture is typically found in a business plan's:

A) marketplace analysis
B) exit strategy
C) issues analysis
D) appendices

Question 46

Which of the following items are typically found in the appendices to a business plan?

A) an analysis of a business's internal strengths or weaknesses
B) a list of key management personnel
C) copies of relevant legal documents
D) a summary of the business idea

Question 47

In which of the following legal forms of business organization are the owner and business considered to be one and the same in terms of tax status and legal liability?

A) sole proprietorship
B) corporation
C) limited partnership
D) b and c

Question 48

A general partnership is a legal business entity that:

A) distributes profits to its partners according to the terms of a partnership agreement
B) consists of a general partner and multiple limited partners
C) limits each partner's liability to his or her capital contribution
D) has its profits taxed twice: once as partnership income and again when the profits are distributed to individual partners

Question 49

An "S" corporation:

A) has a general partner and multiple limited partners
B) gives its owners partnership tax status and corporate liability protection
C) is not a separate taxable or legal entity from its owner
D) has its profits taxed twice

Question 50

A(n)_______________is a formal document that is always a "work-in-progress" to be updated and maintained over the entire life of a business.

Question 51

Business plan templates and tips can be found at the_______________government Web site.

Question 52

The_______________of a business plan typically repeats the information from the cover sheet and adds the names and contact information for key management team members plus a disclaimer to make no copies of the document.

Question 53

A business plan reader can quickly find key information by referencing the plan's_______________.

Question 54

The section of a business plan that summarizes the plan in one to three pages is the_______________.

Question 55

For best results, save writing a business plan's_______________until all the plan details are worked out.

Question 56

A statement of a business's hopes, desires, and aspirations written to inspire its employees is generally called a_______________.

Question 57

When writing a_______________you can choose to target a single audience or a combined audience made up of employees, customers, and other interested parties.

Question 58

For an e-business selling a_______________, the products or services section of a business plan should explain what it is, how it works, what makes it unique, and how potential customers can benefit from it.

Question 59

A(n)_______________includes all the businesses that make or sell similar or complementary products or services.

Question 60

The_______________section of a business plan should include industry information, such as industry size, marketplace and technology trends, personnel issues, changes in government regulations, and other relevant information about the industry.

Question 61

The industry information included in a business plan should be based on_______________data gathered from recognized sources.

Question 62

The marketplace analysis portion of a business plan should contain information about the_______________of targeted customers such as age, gender, and income level.

Question 63

Marketing_______________included in a marketplace analysis should give details about the features and benefits of products or services, pricing options, promotion methods, and distribution techniques.

Question 64

Business location information including headquarters, branch office, warehouses, and manufacturing facilities are identified in the_______________section of a business plan.

Question 65

An overview of significant vehicle, computer, office equipment, or manufacturing equipment purchasing or leasing costs should be included in the_______________section of a business plan.

Question 66

The financial plan statement that tells readers where a business will get its cash and how that cash will be used is a planned_______________statement.

Question 67

A_______________included in a financial plan shows the amount of sales needed to cover fixed and variable expenses.

Question 68

An impressive_______________of outsiders with extensive management and business experience can add credibility to an e-business startup.

Question 69

_______________work, such as legal, accounting, or Web site design and hosting, to professionals outside a business allows the business to focus on core activities.

Question 70

A(n)_______________or risk assessment identifies both threats and opportunities a business might face from outside influences.

Question 71

A(n)_______________has a general partner that assumes all management responsibility and unlimited liability.

Question 72

Two legal forms of business organization that gives owners the limited liability protection of a corporation but the tax status of a partnership or sole proprietorship are an "S" corporation and a(n)_______________.

Question 73

A startup e-business's success may depend in large part on developing strong relationships with its_______________business partners.

Question 74

Describe at least three online resources for business planning information and plan templates.

Question 75

List and describe at least ten elements found in a typical business plan.

Question 76

Describe a process you might follow to craft an effective mission statement for a startup e-business.

Question 77

Discuss the importance to a startup e-business of developing strong relationships with strategic partners.