Question 1

A business plan is of value to&#10;A)start-ups&#10;B)both start-ups and established businesses&#10;C)established businesses&#10;D)new business owners

Accepted Answer

A business plan is valuable for both start-ups and established businesses. Start-ups need a business plan to convince investors to fund their business, while established businesses need a business plan to re-evaluate their strategies and set new goals.

Question 2

A business plan should include&#10;A)location impact on industry history&#10;B)product failure statistics&#10;C)social media contact information for management&#10;D)industry growth trends

Accepted Answer

A business plan should include industry growth trends to demonstrate that the business has the potential to succeed and expand in the future. Location impact on industry history and product failure statistics may be relevant in some cases, but are not necessary in every business plan. Social media contact information for management may be included for convenience, but it is not a crucial component of a business plan.

Question 3

Organizing a new business from scratch&#10;A)eliminates the need to do significant market research&#10;B)often fails because of the lack of historical information&#10;C)is a good strategy for eliminating risk&#10;D)often overcomes the new owner's uncertainties

Accepted Answer

Organizing a new business from scratch often fails because of the lack of historical information, which makes it difficult to predict how the market will respond to the new business. Thus, conducting market research and obtaining historical information is crucial for a new business's success.

Question 4

A saturation index refers to&#10;A)the number of units of product owned by customers in the trading area&#10;B)the ratio of competing retail sales to competing retail space&#10;C)the frequency with which customers encounter product in retail outlets&#10;D)the age and history of a product

Accepted Answer

A saturation index is a measure of the level of competition in a retail market, calculated by dividing the total retail sales in the market by the total amount of retail space available. This helps retailers assess the potential for growth in a particular market by understanding the level of competition they will face. Choices A, C, and D do not accurately define a saturation index.

Question 5

New laws can mostly negatively&#10;A)impact on management passion&#10;B)influence customer attraction&#10;C)affect proposed marketing practices&#10;D)change product usefulness

Accepted Answer

New laws can directly affect proposed marketing practices as they may restrict or prohibit certain advertising methods, require the disclosure of certain information, or impose additional regulations on product labeling and messaging. While new laws may indirectly impact management passion, customer attraction, and product usefulness, these effects are less direct and less predictable.

Question 6

Business plan formats and emphasis&#10;A)are standard&#10;B)vary depending on the use&#10;C)reflect the adequacy of funding&#10;D)define success

Accepted Answer

Business plan formats and emphasis vary depending on the intended use of the plan. A plan created for securing funding from investors may have a different emphasis and format than a plan created for internal use within a company. The adequacy of funding and defining success may be addressed in a business plan, but these factors do not solely determine the format and emphasis of the plan.

Question 7

The following advice is offered to new entrepreneurs&#10;A)it is good business to risk your own savings&#10;B)assume that you could possibly lose at least half of your personal investment in a business&#10;C)if you are very confident of your likely success,don't be distracted by thoughts of losing it all&#10;D)don't risk more than you can afford to lose

Accepted Answer

It is important for new entrepreneurs to be cautious with their investments and not risk more than they can afford to lose. This allows them to have a safety net in case the business does not go as planned and prevents them from having excessive financial burden.

Question 8

Writing a business plans is essential for&#10;A)both raising money and assisting with day to day management&#10;B)raising money&#10;C)managing the new business&#10;D)attracting reliable suppliers

Accepted Answer

Writing a business plan serves two main purposes. Firstly, it helps the entrepreneur to articulate the vision and mission of the business, as well as outlining the strategies and tactics needed to achieve business objectives. Secondly, it provides a comprehensive document which can be used to attract investment, whether from banks, investors, or other sources of capital. A well-prepared business plan demonstrates that the business has a clear roadmap for success, and helps to build trust and confidence with investors.

Question 9

Starting a business from scratch may be chosen by an entrepreneur because&#10;A)it provides a sense of satisfaction&#10;B)it is the most likely strategy to lead to success&#10;C)customers are often sympathetic to such start ups&#10;D)there is lots of government funding for this strategy

Accepted Answer

Starting a business from scratch provides a sense of satisfaction as the entrepreneur has built the business from the ground up and has complete control over its direction and success. It is not necessarily the most likely strategy for success and there may not always be government funding available. While customers may be sympathetic to start-ups, it does not necessarily guarantee success.

Question 10

The executive summary&#10;A)is primarily for investors&#10;B)is primarily for management&#10;C)is primarily for lenders&#10;D)is primarily for employees

Accepted Answer

The executive summary is primarily for investors as it provides a brief overview of the company's goals, strategies, financials, and potential risks, which helps them decide whether they want to invest in the company or not.

Question 11

It is recommended that business plans&#10;A)should be written by an outside consultant&#10;B)should be adapted from existing successful business plans&#10;C)should only be used when required by lenders&#10;D)should be written by the entrepreneur

Accepted Answer

The answer of It is recommended that business plans&#10;A)should be...

Question 12

Starting a business from scratch can&#10;A)reduce the usual risks inherent in a new business&#10;B)is a proven model for surviving the first few years of operation&#10;C)result in the least amount of start up costs&#10;D)requires a significant personal investment of money from the entrepreneur

Accepted Answer

The answer of Starting a business from scratch can&#10;A)reduce the...

Question 13

A business plan helps to&#10;A)attract customers&#10;B)generate growth&#10;C)direct retail store layout&#10;D)keep business growth on course

Accepted Answer

The answer of A business plan helps to&#10;A)attract customers&#10;B)generate growth&#10;C)direct...

Question 14

A new business ______ has start-up problems&#10;A)rarely&#10;B)only sometimes&#10;C)always&#10;D)never

Accepted Answer

The answer of A new business ______ has start-up problems&#10;A)rarely&#10;B)only...

Question 15

When a competent feasibility study has been done by a new business owner&#10;A)it is possible to eliminate uncertainties&#10;B)starting a business from scratch is the most appropriate strategy&#10;C)demand after start up is likely to be sufficient&#10;D)some uncertainties will always remain

Accepted Answer

The answer of When a competent feasibility study has been...

Question 16

It is advisable to&#10;A)work on a business plan based on intuition&#10;B)draft sections of a business plan as information becomes available&#10;C)plan the preparation of your business plan&#10;D)work on a business plan in its entirety at once

Accepted Answer

The answer of It is advisable to&#10;A)work on a business...

Question 17

Some well-known investors insist on business owners&#10;A)with relevant industry experience&#10;B)with engaging personalities&#10;C)who are well funded&#10;D)who are younger than 55

Accepted Answer

The answer of Some well-known investors insist on business owners&#10;A)with...

Question 18

Business owners would consider incorporation mostly because&#10;A)they wish to limit liability&#10;B)it presents a more sophisticated looking image&#10;C)they are confused by partnership arrangements&#10;D)it makes them feel successful from the beginning

Accepted Answer

The answer of Business owners would consider incorporation mostly because&#10;A)they...

Deck 4: Organizing a Businessthe Business Plan