Question 1

Venture capitalists demand high rates of return for their investment in the new venture.

Accepted Answer

Venture capitalists typically expect high rates of return on their investments in order to compensate for the risks associated with investing in a new venture.

Question 2

The four Cs of credit are computers,capital,compromise,and collateral.

Accepted Answer

The four Cs of credit are character, capacity, capital, and collateral.

Question 3

Planning is a process that never ends and is extremely important in the early stages of any new venture.

Accepted Answer

Planning is indeed a continuous process that involves identifying goals, analyzing the situation, and determining the actions needed to achieve the objectives. It is particularly essential in the early stages of a new venture because it helps to establish a direction and prioritize resources. However, planning should also be revisited and adjusted as circumstances change to ensure the venture remains on track towards success.

Question 4

In building a marketing plan,the entrepreneur should use a process designed as a pyramid,starting with narrow data and working down to broader-based information.

Accepted Answer

The process should start with broader-based information and work down to narrow data.

Question 5

It is recommended that an entrepreneur avoid using the Internet as a resource for finding information to write a business plan because the information found there is often incorrect and unreliable.

Accepted Answer

The Internet can be a valuable resource for finding information to write a business plan. However, it is important to verify the accuracy and reliability of the information gathered from online sources. Entrepreneurs should be cautious and use critical thinking when using the Internet as a source for their business plan.

Question 6

The depth and detail in the business plan depend on the size and scope of the proposed new venture.

Accepted Answer

The depth and detail of a business plan will vary depending on the size and scope of the proposed new venture. A larger and more complex venture will require a more detailed and comprehensive business plan, while a smaller and simpler venture may only require a basic plan.

Question 7

The process of writing the business plan provides a self-assessment for the entrepreneur.

Accepted Answer

Writing a business plan requires the entrepreneur to evaluate their business idea, market, competition, and goals. By doing so, they gain a better understanding of the feasibility of their idea, identify potential challenges, and develop strategies to overcome them. This self-assessment helps the entrepreneur refine their business idea and builds their confidence in the potential success of their venture.

Question 8

Most entrepreneurs have little difficulty with gathering market information.

Accepted Answer

Entrepreneurs often face significant challenges in gathering market information due to limited resources, lack of access to comprehensive data, and the dynamic nature of markets.

Question 9

The business plan does not help an entrepreneur to obtain financing.

Accepted Answer

This statement is false. A well-written business plan can assist an entrepreneur in obtaining financing by outlining the company's potential for success, demonstrating a clear understanding of the market, and providing financial projections and strategies for growth. Many lenders and investors require a business plan as part of the application process for financing.

Question 10

To maintain objectivity,the business plan should not be written by the entrepreneur.

Accepted Answer

The business plan can be written by the entrepreneur, however it is important for them to seek feedback from outside sources and revise the plan accordingly to ensure objectivity.

Question 11

The business plan addresses only short-term decision making.

Accepted Answer

The business plan should address both short-term and long-term decision making. It should outline the goals and objectives of the business for the next few years, as well as strategies for achieving those goals over a longer period.

Question 12

Keep the goals and objectives as general as possible to make the business plan easier to control and implement.

Accepted Answer

Keeping goals and objectives too general can lead to ambiguity, lack of clarity, and difficulty in measuring progress or success. It is important to have specific and measurable goals and objectives to ensure that the business plan can be effectively controlled and implemented.

Question 13

Investors often spend a lot of time conducting background checks.

Accepted Answer

Investors do spend a lot of time conducting background checks on companies, executives, and finances to make informed investment decisions.

Question 14

A quick feasibility study should be conducted before preparing the business plan to uncover possible barriers to success.

Accepted Answer

Conducting a feasibility study helps to identify potential obstacles or challenges that may affect the success of the business, which are important factors to consider in preparing an effective business plan.

Question 15

The process for contingency planning will depend on the nature of the business,which can be affected by factors such as weather disasters,employee strikes,or new regulations to name a few.

Accepted Answer

Yes, the process for contingency planning will vary depending on the specific risks and challenges faced by the particular business.

Question 16

Before writing the business plan,an entrepreneur should conduct an objective self-assessment of his or her abilities,including areas such as planning skills and sales skills.

Accepted Answer

Conducting a self-assessment to evaluate one's abilities is an important step before writing a business plan. It helps the entrepreneur identify their strengths and weaknesses in areas such as planning and sales skills, which can impact the success of their business.

Question 17

The digital age is only relevant to new ventures if they sell items online.

Accepted Answer

While selling items online is an important aspect of the digital age, it is not the only relevance to new ventures. The digital age also presents opportunities for innovative marketing strategies, data analysis, and overall digital transformation of businesses.

Question 18

The best way to address the concerns of all potential audiences when writing the business plan is to rely exclusively on a computer software package.

Accepted Answer

Relying exclusively on a computer software package may not take into account the specific concerns and requirements of all potential audiences. It is important to also conduct research, gather feedback, and tailor the plan to address the needs and interests of stakeholders.

Question 19

In writing the business plan,an entrepreneur should consider four perspectives: the investor,the customer,the employees,and themselves.

Accepted Answer

The answer of In writing the business plan,an entrepreneur should...

Question 20

Plans may differ in function and scope but they all have one important purpose: to provide guidance and structure to management in a rapidly changing market environment.

Accepted Answer

Plans are created with the purpose of providing guidance and structure to management in a dynamic market environment. While the function and scope of plans may vary, their ultimate goal remains the same.

Quiz 7: The Business Plan: Creating and Starting the Venture