Question 1

An important goal of the "marketing strategy" section of the business plan is to prove that there is a real market for the proposed good or service.

Accepted Answer

The purpose of the marketing strategy section is to demonstrate that there is a viable market for the product or service being offered, making it an important element of the business plan.

Question 2

To be meaningful, an objective must include a time frame for achievement.

Accepted Answer

A time frame is necessary for an objective to be specific and measurable. Without a time frame, it may be difficult to determine if the objective has been achieved or not.

Question 3

The most important factor in the success of a business venture is the quality of its management, and financial officers and investors weigh heavily the ability and experience of the firm's managers in their financing decisions.

Accepted Answer

This statement is true as the quality of management can greatly impact the success of a business venture, and investors and financial officers look at the abilities and experience of managers when deciding whether to invest in a company or provide financing. Good management can lead to efficient operations, strategic decision making, and ultimately, profitability.

Question 4

Objectives are short-term, specific targets that the small company plans to accomplish.

Accepted Answer

Objectives are indeed short-term, specific targets that a small company plans to achieve.

Question 5

When describing their products and services in their business plans, entrepreneurs must remember that customers buy the benefits from products and services, not the features.

Accepted Answer

Customers are looking for how a product or service will fulfill their needs or solve their problem, not just the physical attributes or features of the item. Therefore, emphasizing the benefits to customers is crucial in a successful business plan.

Question 6

A business plan that fails to assess a company's competitors realistically makes the entrepreneur appear to be poorly prepared.

Accepted Answer

Realistically assessing competitors is a crucial aspect of a comprehensive business plan. Ignoring or underestimating competition can lead to unrealistic expectations and poor decision-making. It also signals a lack of market research and preparation on the part of the entrepreneur.

Question 7

The business strategy section of the business plan addresses the question of how the entrepreneur plans to achieve the mission, goals, and objectives he has established for his business venture.

Accepted Answer

The business strategy section of the business plan is where the entrepreneur outlines their plan to achieve their established mission, goals, and objectives for their business.

Question 8

The safest strategy for an entrepreneur launching a new business to follow is a "me-too" strategy-copying products, services, and the images of already successful businesses.

Accepted Answer

While it may seem like a safe strategy to copy an already successful business, it is not the most effective or sustainable approach. It is important for entrepreneurs to differentiate themselves and offer unique value to their customers in order to stand out in a crowded market. Additionally, copying another business can lead to legal issues and damage the reputation of the new business. It is better to take inspiration from successful businesses but create something original and differentiated.

Question 9

A benefit is a descriptive fact about a product or service; a feature is what the customer gains from that product or service benefit.

Accepted Answer

A feature is a descriptive fact about a product or service, while a benefit is what the customer gains from that feature.

Question 10

Identifying a specific target market is not an essential part of creating a solid business plan for a small company.

Accepted Answer

Identifying a specific target market is an essential part of creating a solid business plan for a small company. It helps in determining the customers' needs and preferences, creating a focused marketing strategy, and developing a product or service that caters to a specific group of consumers.

Question 11

The section of the business plan that describes the company's products or services should focus on how a business will transform the tangible features of its products or services into important, but often intangible, customer benefits.

Accepted Answer

The section of the business plan that describes the company's products or services should focus on how a business will transform the tangible features of its products or services into important, but often intangible, customer benefits.

Question 12

An important theme of the business strategy section of the business plan is what makes the owner's company original in the eyes of its target customers.

Accepted Answer

The business strategy section of the business plan focuses on creating a unique value proposition for the company in order to stand out among competitors and attract target customers. This involves identifying what makes the company original, such as its products, services, pricing strategy, marketing approach, or other factors.

Question 13

In a business plan, both company goals and objectives should relate to the company's mission.

Accepted Answer

Company goals and objectives should align with the company's overall mission to ensure that all efforts are focused on achieving the same purpose. This helps to create a clear and coherent strategy for the entire organization.

Question 14

Because gathering information on competitors' products or services, strategies, and market share is so difficult, most lenders and investors see the competitor analysis section of the business plan as optional.

Accepted Answer

Gathering information on competitors is crucial for the success of a business, so the competitor analysis section of the business plan is not optional. Lenders and investors typically want to see a thorough analysis of the competitive landscape before deciding whether to invest or lend money.

Question 15

The wise entrepreneur will indicate that there is no real competition for his new business venture, thereby increasing the likelihood that he will gain more interested investors.

Accepted Answer

It is not wise for an entrepreneur to indicate that there is no real competition for his new business venture as it may appear unrealistic and not credible to potential investors. It is important for entrepreneurs to research and acknowledge existing competition while also highlighting their unique selling proposition and competitive advantage.

Question 16

The plan of operation section of the business plan should address how the business plans to retain key managers and employees.

Accepted Answer

The plan of operation section should include strategies for retaining key managers and employees, such as offering competitive salaries and benefits, providing opportunities for professional development and advancement, and creating a positive work culture.

Question 17

Lenders and investors prefer experienced managers when they consider financing a business venture.

Accepted Answer

Lenders and investors prefer to invest in companies that have experienced and capable management teams in place, as they are more likely to successfully execute the business plan and generate returns on the investment.

Question 18

Defining the company's target market and its buying potential is one of the most important and most challenging parts of building a business plan.

Accepted Answer

Identifying the target market and understanding their buying potential is crucial in determining the marketing strategies and sales goals for a business. However, it can be challenging as it requires market research and analysis to determine the demographics, psychographics, and behavior of potential customers.

Question 19

The business plan should include an existing firm's past three years of financial statements as well as its projected statements.

Accepted Answer

The business plan should include both the existing firm's past three years of financial statements and its projected statements.

Question 20

The business plan should include the resumes of anyone with more than a 20 percent ownership interest in the company.

Accepted Answer

Including the resumes of anyone with a significant ownership interest in the company can help potential investors or lenders understand the experience and qualifications of the management team.

Quiz 4: Conducting a Feasibility Analysis and Crafting a Winning Business Plan

An important goal of the "marketing strategy" section of the business plan is to prove that there is a real market for the proposed good or service.

To be meaningful, an objective must include a time frame for achievement.

The most important factor in the success of a business venture is the quality of its management, and financial officers and investors weigh heavily the ability and experience of the firm's managers in their financing decisions.

Objectives are short-term, specific targets that the small company plans to accomplish.

When describing their products and services in their business plans, entrepreneurs must remember that customers buy the benefits from products and services, not the features.

A business plan that fails to assess a company's competitors realistically makes the entrepreneur appear to be poorly prepared.

The business strategy section of the business plan addresses the question of how the entrepreneur plans to achieve the mission, goals, and objectives he has established for his business venture.

The safest strategy for an entrepreneur launching a new business to follow is a "me-too" strategy-copying products, services, and the images of already successful businesses.

A benefit is a descriptive fact about a product or service; a feature is what the customer gains from that product or service benefit.

Identifying a specific target market is not an essential part of creating a solid business plan for a small company.

The section of the business plan that describes the company's products or services should focus on how a business will transform the tangible features of its products or services into important, but often intangible, customer benefits.

An important theme of the business strategy section of the business plan is what makes the owner's company original in the eyes of its target customers.

In a business plan, both company goals and objectives should relate to the company's mission.

Because gathering information on competitors' products or services, strategies, and market share is so difficult, most lenders and investors see the competitor analysis section of the business plan as optional.

The wise entrepreneur will indicate that there is no real competition for his new business venture, thereby increasing the likelihood that he will gain more interested investors.

The plan of operation section of the business plan should address how the business plans to retain key managers and employees.

Lenders and investors prefer experienced managers when they consider financing a business venture.

Defining the company's target market and its buying potential is one of the most important and most challenging parts of building a business plan.

The business plan should include an existing firm's past three years of financial statements as well as its projected statements.

The business plan should include the resumes of anyone with more than a 20 percent ownership interest in the company.