Question 1

The business plan has two essential functions;it helps the entrepreneur determine if the business will succeed and it helps recruit management talent to run the new company.

Accepted Answer

The answer of The business plan has two essential functions;it...

Question 2

Often,the presence or absence of a quality business plan is a determining factor in a lender or investor's decision to put money into a business venture.

Accepted Answer

A well-written and comprehensive business plan can provide insight and reassurance to lenders or investors about the potential success of a business venture. They want to see a clear vision, realistic financial projections, and a solid strategy for achieving goals. Without a strong business plan, the likelihood of securing funding decreases significantly.

Question 3

The quality of the entrepreneur's business plan has little impact on the first impression potential lenders and investors have of the company.

Accepted Answer

The quality of the entrepreneur's business plan plays a significant role in creating a positive first impression on potential lenders and investors. A well-written and comprehensive business plan can demonstrate the entrepreneur's understanding of the market, the company's goals, and the potential for growth and profitability, which can increase the likelihood of securing funding.

Question 4

Which financial forecast should be realistic?

Accepted Answer

The answer of Which financial forecast should be realistic?
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Question 5

A well-prepared business plan helps determine the risks facing the venture.

Accepted Answer

A well-prepared business plan helps to identify potential risks that a venture may face and allows for the development of strategies to address and mitigate those risks.

Question 6

General requests for funds are likely to win approval.

Accepted Answer

General requests for funds are less likely to win approval than specific and well-justified requests.

Question 7

The business plan should cover key people,the opportunity,provide a business context,and explain the risks and rewards involved.

Accepted Answer

The business plan should include all of these elements to properly articulate its purpose, value, and potential outcomes.

Question 8

The ideal business plan should be at least 100 pages long and somewhat hard to read in order to demonstrate your thoroughness and to capture the venture capitalist's attention.

Accepted Answer

The ideal business plan should be concise, clear, and easy to understand. Venture capitalists receive numerous proposals, so it's important to capture their attention with a well-written and engaging plan that highlights the key points of your business. A 100-page plan may be too long and overwhelming, which could potentially turn off investors.

Question 9

An executive summary highlights the critical aspects of the plan.

Accepted Answer

An executive summary is a brief summary that highlights the critical aspects of a plan or a report.

Question 10

Entrepreneurs who apply for loans without having prepared business plans are less likely to get the money they need.

Accepted Answer

Lenders typically require a business plan to understand the viability and potential of the business before deciding to lend money. Without a well-prepared business plan, entrepreneurs may not be able to convince lenders of the profitability and sustainability of their business, leading to a higher chance of loan rejection.

Question 11

Competitor's Analysis should identify:

Accepted Answer

Competitor's analysis should identify all of the above - key competitors, their strategies, and their image in the marketplace. This helps the company to compare and contrast its own strategies and image with that of its competitors, and to make necessary changes or improvements to stay ahead of the competition.

Question 12

The primary purpose of building a business plan is to raise capital.

Accepted Answer

While raising capital may be one of the reasons to build a business plan, the primary purpose is to provide a roadmap for the business and guide decision-making. It also helps to identify potential problems and solutions, set goals and objectives, and communicate the business concept to stakeholders such as investors, employees, and customers.

Question 13

Investors read business plans in such detail that the executive summary is nice to have but it is optional.

Accepted Answer

The executive summary is a crucial part of the business plan as it provides a summary of the key points and helps investors to quickly understand the main objectives and strategies of the business. Many investors will base their decision on the executive summary alone, so it is important to ensure it is well written and concise.

Question 14

The company history should explain why the company was formed,its past successes,and its image in the marketplace.

Accepted Answer

The company history typically includes information about why the company was formed, its past successes, and its reputation or image in the marketplace. This information helps to establish the company's identity and can be useful for attracting customers or investors.

Question 15

The executive summary should summarize all of the relevant points of the proposed venture and should be concise - no more than two pages.

Accepted Answer

The executive summary should be a brief and concise summary of the proposed venture, highlighting the key points and benefits, and should generally not exceed two pages.

Question 16

Objectives are long-range,broad statements of what the company plans to accomplish in the distant future.

Accepted Answer

Objectives are specific, measurable goals that a company aims to achieve in the short to medium term, not broad statements for the distant future.

Question 17

One effective documentation technique involves ________,in which entrepreneurs test their business models on a small scale before committing serious resources to a business.

Accepted Answer

Business prototyping involves testing a business model on a small scale before committing serious resources to a business. This allows entrepreneurs to identify potential flaws and make improvements before investing a significant amount of time and money into the business. Forecasting and collateral are not related to this technique.

Question 18

The industry analysis should cover existing profitability and anticipated profitability of firms in the targeted market segment,and any significant entry or exit of firms.

Accepted Answer

The industry analysis should indeed cover the existing profitability and anticipated profitability of firms in the targeted market segment, as well as any significant entry or exit of firms.

Question 19

The executive summary should highlight significant financial and operational events.

Accepted Answer

The answer of The executive summary should highlight significant financial...

Question 20

Company goals address the question,"Why am I in this business?"

Accepted Answer

Company goals define the purpose and reason for why a business exists and what it aims to achieve, answering the question of "Why am I in this business?"

Quiz 6: Conducting a Feasibility Analysis and Crafting a Winning Business Plan