Question 1

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

Accepted Answer

Conducting a feasibility study before preparing a business plan helps identify potential barriers and risks that may impact the success of the business.

Question 2

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

Accepted Answer

Venture capitalists are looking for high returns on their investments, as they are taking on a high degree of risk by investing in new and untested ventures. Generally, they are looking for a return on investment between 20-30% or more.

Question 3

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

Accepted Answer

The size and scope of a proposed new venture will determine the amount of detail required in its business plan. A small startup may require a basic business plan that outlines its goals, target market, and financial projections. On the other hand, a large corporation seeking funding for a major expansion may need to provide a more comprehensive document detailing its operations, marketing strategies, competitive analysis, and more.

Question 4

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 is a valuable resource for finding information to write a business plan. However, it is important to be cautious and verify the credibility of the sources used. It is recommended to use a variety of sources and consult with experts to ensure that the information is accurate and reliable.

Question 5

In preparing the business plan,entrepreneurs can provide their own perspective and should consider the needs of external sources.

Accepted Answer

Entrepreneurs should provide their own perspective in the business plan but also consider the needs and expectations of external sources such as investors, lenders, and potential customers.

Question 6

The business plan is a private document and should not be read by employees and customers.

Accepted Answer

The answer of The business plan is a private document...

Question 7

In the business plan the entrepreneur should address the needs of the entrepreneur and the needs of the market;the investor's perspective is not important.

Accepted Answer

The investor's perspective is important as they are potential sources of funding and will want to know how their investment will generate returns. Their perspective can also provide valuable feedback on the viability and potential success of the business.

Question 8

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 solely on a computer software package may not take into consideration the varied concerns of different audiences. It is important to conduct thorough research, incorporate feedback from different stakeholders, and customize the plan according to the specific needs and expectations of each audience.

Question 9

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

Accepted Answer

Writing a business plan forces the entrepreneur to evaluate their strengths, weaknesses, opportunities, and threats. This self-assessment helps the entrepreneur to identify potential challenges and develop solutions to address them.

Question 10

Belinda Guadarrama was Hispanic Businesswoman of the year in 2002.

Accepted Answer

Belinda Guadarrama was indeed named Hispanic Businesswoman of the Year in 2002.

Question 11

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

Accepted Answer

While it may be beneficial to seek assistance and feedback from outside sources, ultimately the entrepreneur should be the primary author of their own business plan. This allows for a clear understanding of the goals, strategies, and vision for the business. However, it is important for the entrepreneur to remain objective and open to constructive criticism and feedback during the planning process.

Question 12

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

Accepted Answer

Conducting an objective self-assessment of abilities, including planning and sales skills, is an important step before writing a business plan.

Question 13

Investors often spend a lot of time conducting background checks.

Accepted Answer

Investors typically conduct thorough background checks on companies or individuals before investing in them to assess their financial stability, reputation, and potential risks. This helps investors make informed decisions and minimize the chances of losing their investment.

Question 14

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

In building a marketing plan, the entrepreneur should use a process designed as a funnel, starting with broad-based information and working down to narrow data. The funnel approach allows the entrepreneur to gather information about the industry, target market, and competitors before delving into specific customer preferences and behaviors.

Question 15

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

Accepted Answer

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

Question 16

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...

Question 17

Planning the new venture is a process that never ends.

Accepted Answer

Planning for a new venture is an ongoing process as the market, competition, and other factors keep changing, requiring continuous analysis and adjustment of the business plan. Hence, planning for a new venture never ends.

Question 18

The business plan addresses only short term decision making.

Accepted Answer

The business plan should address both short term and long term decision making in order to provide a comprehensive roadmap for the business's success.

Question 19

Most entrepreneurs have little difficulty with gathering market information.

Accepted Answer

While some entrepreneurs may have experience and knowledge in gathering market information, others may find it challenging due to factors such as limited resources, lack of expertise or access to data, and a rapidly changing market.

Question 20

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

Accepted Answer

A well-written business plan can be a crucial tool in obtaining financing. It helps investors and lenders understand the company's potential for success, its market analysis, and its financial projections. A strong business plan can demonstrate that an entrepreneur has thoroughly thought through their business idea and has a plan for how to make it profitable, making them a more attractive candidate for financing.

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