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

Accepted Answer

While all of the key points listed are important, an investor is primarily interested in the potential profitability of a company. Strategies to reduce expenses and the uniqueness of the product may also be important, but they are secondary to the overall profitability of the business. The purpose of the business is important, but it does not necessarily indicate whether the business will be profitable.

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.

Accepted Answer

The information about the expiring patent is relevant to the company and management team section because it could impact the company's future success and ability to attract investors. It may affect the company's competitive advantage, market position or revenue growth. Disclosing this information in the business plan would show that the entrepreneur is aware of potential challenges and is transparent in their communication with investors.

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.

Accepted Answer

While some entrepreneurs may write business plans before starting a business, others may write them after the business is up and running. Ultimately, the timing of when a business plan is written may vary from entrepreneur to entrepreneur and may depend on the specific circumstances of the business. Therefore, the most correct statement is that smart entrepreneurs write business plans at different times.

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

Accepted Answer

The section that provides information on the warranties that the auto body shop will be offering would most likely be found under the product section of the business plan. This is because this section typically provides details on the specific products or services that will be offered by the business, along with any associated features, benefits, and guarantees or warranties.

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

Accepted Answer

Before writing a business plan, a potential owner should first determine whether their personal goals and business goals are aligned. This will help ensure that the business is a good fit for their personal goals and will increase the likelihood of success. The other options listed are important steps in the business planning process, but should come after this initial alignment of personal and business goals.

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

Accepted Answer

All other options listed (product descriptions, sales and promotion details, and the table of contents) are common components of a business plan. The chapter summary, while useful, is not always included in a business plan and is therefore not a required component.

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

Accepted Answer

The answer of Rick's business plan cover sheet includes basic...

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

Accepted Answer

The section that contains an analysis of whether there will be enough customers to purchase the product in the future is the market research section. This section includes gathering information on the target market, assessing demand for the product, and identifying potential customers.

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.

Accepted Answer

The existence of a business plan demonstrates that the business process has been carefully planned out, outlining the goals, strategies, and steps needed to achieve success. It does not necessarily guarantee financial success, fulfillment of market needs, or the presence of 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

Accepted Answer

The description of which companies will provide the materials to manufacture the product is more appropriate for the operations section of the business plan. The company and management team section should focus on introducing the key members of the team, their roles and responsibilities, and how their experience and skills will contribute to the success of the business. Additionally, it should highlight the unique factors that differentiate the business from competitors and how it is poised to impact the industry. Board members, if applicable, can also be introduced here. Economic trends, while important, are better suited to be discussed in the market analysis section of the business plan.

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.

Accepted Answer

While there is no one-size-fits-all business plan template, most plans will have common components such as an executive summary, market analysis, marketing and sales strategies, financial projections, and management structure. However, the order and emphasis of these components can vary depending on the specific business and the preferences of the entrepreneur.

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

Accepted Answer

The next section in a business plan after the cover sheet and table of contents is typically the executive summary, which is an abbreviated form of the entire business plan.

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

Accepted Answer

All of the above calculations (expected growth rate, predicted future profits, and projected yearly sales) are important components of financial projections that potential investors would want to see in an executive summary. These projections help investors assess the potential return on their investment and make informed decisions about whether to invest in the business or not.

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

Accepted Answer

Investors typically look for information about the purpose of the business, its operating methods, and the anticipated profitability. However, details about the pricing of company products are usually found in other sections of the business plan, such as the marketing or financial plans, and are not typically included in the executive summary.

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.

Accepted Answer

Madison's business addresses an urgent need for makeshift shelters in natural disaster situations, which requires rapid deployment and less time for extensive planning.

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

Accepted Answer

The section that discusses the market analysis would be the best choice to include a statement about another company charging more money for a similar product. This section provides an overview of the competition, their products, and their pricing strategies.

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

Accepted Answer

The market analysis should focus on the potential customers, competitors, industry trends, and potential growth for the business, as well as the advantage of using the business's product or service. While methods for promoting the business can be mentioned, it is not a necessary component of the market analysis.

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

Accepted Answer

The business plan should start with introducing the company and management team (III), followed by the description of the product (II) and strategies for sales and promotion (IV), and finally end with appendices (I) that include additional information such as financial projections and market research.

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

Accepted Answer

While a well-written business plan can help an entrepreneur with applying for a bank loan, getting clear on business goals and objectives, and identifying potential profits, it is not designed to specifically gather feedback from customers on the product or service. This would require a separate marketing research plan or customer feedback strategy.

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

Accepted Answer

The section that lists what a company thinks customers would be willing to pay for the merchandise is the "product" section of the business plan. This section typically includes information on the product or service, its unique features and benefits, and pricing strategies based on market analysis and customer demand. The financials section focuses more on financial projections and budgeting, while the sales and promotion section covers marketing and advertising strategies for promoting the product to customers. The market analysis section provides information on market trends, competition, and potential target customers, which can inform pricing and product development decisions in the product section.

Quiz 2: Mini Constructing a Successful Business Plan

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

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?

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

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?

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

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

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?

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

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

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

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

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

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

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

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

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

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

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

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