Question 1

Franz is starting a snowboard and ski shop.He will need financing in order to stock the shop with sufficient equipment,clothing,and accessories for opening day.What kind of plan should Franz prepare?
A) full marketing plan
B) partial business plan
C) full business plan
D) partial marketing plan

Accepted Answer

Franz should prepare a full business plan, which includes a detailed analysis of the market, competition, target customers, marketing strategies, financial projections, and operational plans. This plan will help him obtain financing, set realistic goals, and make informed decisions about the business. A partial business plan or marketing plan may not cover all the necessary aspects or provide a comprehensive view of the business's potential.

Question 2

Violet has hired an accountant to help her project the financial results for a business she plans to start.She will pay the accountant $500 for each year that is projected.How much will Violet likely pay the accountant?
A) from $250 to $1,000
B) from $1,000 to $1,500
C) from $1,500 to $2,500
D) from $2,500 to $3,500

Accepted Answer

Since Violet plans to project the financial results for a business she plans to start, she will likely need to project for at least 3-5 years. Therefore, the accountant's fees would likely range from $1,500 to $2,500.

Question 3

The marketing plan should identify user benefits and show evidence of consumer interest,as well as clarifying the firm's competitive edge.

Accepted Answer

The marketing plan should indeed identify user benefits and show evidence of consumer interest, as well as clarify the competitive edge of the firm.

Question 4

A business plan may be prepared for a major expansion of an existing business,as well as for a proposed new business.

Accepted Answer

A business plan can be prepared for both scenarios, whether it's for expanding an existing business or starting a new one.

Question 5

Entrepreneurs should be prepared to present their "elevator pitch" on street corners,or anywhere the opportunity presents itself.

Accepted Answer

Entrepreneurs should always be ready to present their elevator pitch in any situation as they never know when they might come across potential investors or clients.

Question 6

A business plan should project marketing,operational,and financial aspects of a business for the first seven years.

Accepted Answer

A typical business plan usually projects for the first 3 to 5 years, not seven.

Question 7

Once an entrepreneur secures specialists to write the plan such as a marketing expert,accountant,and lawyer,the entrepreneur's involvement is not required.

Accepted Answer

While the entrepreneur may have delegated tasks to the specialists, their involvement is still necessary to provide input and make decisions on the plan. True collaboration and communication are key to creating a successful business plan.

Question 8

A business plan is prepared for external use only; for example,to interest potential investors.

Accepted Answer

A business plan can also be prepared for internal use within a company to guide decision-making and monitor progress.

Question 9

An investor has reviewed a business plan and the company's track record since its inception six months ago.The investor is ready to provide capital for the company to grow.Why is the investor interested in providing capital?
A) evidence of customer acceptance of the venture's product or service
B) expense projections that are far lower than normal industry ranges
C) competition in the industry is on the decline
D) new features have been added to the product being sold

Accepted Answer

The investor is interested in providing capital because of evidence of customer acceptance of the venture's product or service. This indicates that there is a demand for the product or service, which can lead to potential profits for the investor.

Question 10

A business plan must contain believable financial projections.

Accepted Answer

Financial projections are a crucial component of a business plan as they demonstrate the financial viability of the proposed business. These projections should be realistic and based on sound assumptions to ensure credibility.

Question 11

The biggest advantage of using a computer spreadsheet to prepare the financials is the professional formatting of the output.

Accepted Answer

The biggest advantage of using a computer spreadsheet for financials is the ability to perform complex calculations automatically and update results instantly when input data changes, not just the professional formatting of the output.

Question 12

A "can do" attitude is essential in starting a new business.Planning is a good thing,although getting the business operational is equally important.

Accepted Answer

A can do attitude is important in any endeavor, including starting a new business. While planning is important, taking action to get the business up and running is equally crucial.

Question 13

Computer software that prepares business plans greatly simplifies and speeds up the process with little risk.

Accepted Answer

While computer software can simplify and speed up the process of preparing business plans, there is still a risk of errors, oversights, or misinterpretations if the software is not used correctly or if the input data is inaccurate.

Question 14

Where in the business plan should the executive summary be inserted?
A) at the beginning
B) after the marketing plan
C) before the finance plan
D) at the end

Accepted Answer

The executive summary should be inserted at the beginning of the business plan as it provides a concise overview of the entire plan, including the business concept, market analysis, financial projections, and management team. This allows readers to quickly understand the key details of the plan and decide whether or not they want to read further.

Question 15

The amount of time spent planning depends on the management team's personal preferences.

Accepted Answer

The amount of time spent planning can vary based on the management team's personal preferences and style.

Question 16

Kelvin was glad he created a business plan for his painting business.He was able to ensure all the important items were covered such purchasing brushes and ladders,printing and mailing brochures,and negotiating a line a credit at the bank.In what capacity was Kelvin's plan useful to him?
A) as a schedule
B) as a checklist
C) as a proposal
D) as a review

Accepted Answer

Kelvin's business plan served as a checklist for him to make sure he covered all of the important items in starting his painting business.

Question 17

Carried out correctly,the process of preparing the business plan will clarify what you want to accomplish in a new business and,equally important,which factors might determine your success or failure in the venture.

Accepted Answer

By preparing a business plan, you can identify your business goals, analyze the market, assess your competition, evaluate financial viability, and identify potential risks and challenges. This helps to clarify your overall strategy and increase your chances of success in the venture.

Question 18

The level of complexity of a business affects how much planning is appropriate.

Accepted Answer

The level of complexity of a business has a direct correlation with how much planning is necessary to run the business effectively. The more complex the business is, the more planning is required to manage all the different aspects of the business.

Question 19

As the game plan for a new venture,the business plan refers to the entrepreneur's bank account and other cash sources.

Accepted Answer

The business plan outlines the strategy and operations of the new venture, including marketing, financial projections, and organizational structure. It may include information on funding sources, but it does not refer to the entrepreneur's personal bank account or other cash sources.

Question 20

An entrepreneur proceeds with plans to manufacture a new product designed by her firm's top engineers.She should realize that the product,although well engineered,may not be wanted by customers.

Accepted Answer

Just because the product is well engineered, it does not necessarily mean that there is a demand for it in the market. The entrepreneur should conduct market research to ensure that the product is wanted by customers before proceeding with manufacturing.

Quiz 5: Developing an Effective Business Plan

Franz is starting a snowboard and ski shop.He will need financing in order to stock the shop with sufficient equipment,clothing,and accessories for opening day.What kind of plan should Franz prepare?

Violet has hired an accountant to help her project the financial results for a business she plans to start.She will pay the accountant $500 for each year that is projected.How much will Violet likely pay the accountant?