Question 1

Plans that appeal effectively to investors are:
A)long and thorough.
B)market-oriented.
C)product-oriented.
D)ten or fewer pages.

Accepted Answer

Plans that are market-oriented tend to be more effective in appealing to investors as they focus on identifying and meeting customer needs and addressing the size and growth potential of the market. A long and thorough plan may include too much information that is not relevant or essential for investors to make a decision. A product-oriented plan may only focus on the features or benefits of a product without addressing the larger market and financial considerations. Plans with only ten or fewer pages may not provide enough detail to adequately convey the opportunity or potential risks.

Question 2

It is most important that the marketing plan:
A)describes how the business will reach and service customers.
B)shows the degree of patent or copyright protection.
C)summarises the location of potential customers.
D)identifies distribution channels.

Accepted Answer

A marketing plan is primarily focused on outlining strategies to reach and service customers effectively, which is crucial for business success.

Question 3

The sources and uses table is a part of the ___________ of the business plan.
A)critical risks section
B)offering section
C)exit strategy
D)financial plan

Accepted Answer

The answer of The sources and uses table is a...

Question 4

When describing the product in the business plan, the entrepreneur should:
A)use technical terms.
B)state that product will sell itself.
C)use layman terms.
D)assume that others will like the product.

Accepted Answer

Using layman terms will ensure that the product is easily understandable by potential investors or customers who may not have technical knowledge. Stating that the product will sell itself or assuming that others will like the product is not a sufficient description for the business plan.

Question 5

When dealing with weaknesses in a business plan, the entrepreneur should:
A)use technical jargon to confuse readers.
B)ignore weaknesses as they might not attract investors.
C)assume that investors will not find them.
D)be straightforward with them and have an action plan.

Accepted Answer

It is important for the entrepreneur to be straightforward with weaknesses in their business plan and have a plan of action to address those weaknesses. Investors want to see that the entrepreneur is aware of potential challenges and has a plan in place to overcome them. Ignoring weaknesses or using technical jargon to confuse readers will not be effective in gaining investor interest.

Question 6

In a business plan, the facilities and location of the proposed venture are described in the:
A)executive summary.
B)management team.
C)operations and development plan.
D)product and service plan.

Accepted Answer

The facilities and location are critical components of the operations and development plan. This plan outlines the logistical aspects of the business, such as the physical space required, equipment needs, and the location strategy that will help the business successfully reach its target market.

Question 7

Ideally, investors like a business plan that shows evidence of:
A)a management staff that will minimise overhead.
B)a well-balanced managerial team.
C)an entrepreneur who has studied management.
D)an entrepreneur who will spend more time managing than selling.

Accepted Answer

A well-balanced managerial team ensures that the business has the necessary skills and expertise required to effectively manage the company. It reduces the risk associated with relying on one individual to handle all aspects of the business. While minimizing overhead and having an entrepreneur who is knowledgeable about management are important factors, they are not as crucial as having a strong team in place. The amount of time the entrepreneur spends managing versus selling may also vary based on the business and its needs.

Question 8

Information about the experience of key executives should be placed in the _______ of the business plan.
A)executive summary
B)management team section
C)operations and development plan
D)critical risks section

Accepted Answer

The management team section is the most appropriate place to provide information about the experience of key executives. This section is typically included after the executive summary and company description and provides an overview of the individuals who will be responsible for managing the company. Including information about executive experience in this section can help to reassure investors and other stakeholders that the team has the knowledge and skills needed to succeed. The other options listed are less appropriate for this information - the executive summary provides a high-level overview of the entire business plan, the operations and development plan focuses on the company's operations and growth plans, and the critical risks section outlines potential risks and challenges facing the business.

Question 9

Investors who review business plans typically:
A)cannot read through all they receive.
B)read about one-half of a plan.
C)read plans thoroughly.
D)read only the marketing and finance sections.

Accepted Answer

Investors are typically inundated with business plans, so they cannot read through all they receive. Therefore, they often have to be selective about which plans they read and may only read a portion of a plan.

Question 10

Orlando has just finished the section describing his quality control methods and the need for specific equipment.Orlando has written the __________.
A)management team plan
B)marketing plan
C)company description
D)operations and development plan

Accepted Answer

The operations and development plan typically includes information on quality control methods and necessary equipment.

Question 11

Items such as marketing research studies and the resumes of key executives are placed in the __________ of the business plan.
A)appendix
B)executive summary
C)table of contents
D)management team section

Accepted Answer

Marketing research studies and resumes of key executives are additional information that can support the main content of the business plan but are not essential to the overall strategy. Therefore, they are commonly included in the appendix section of the plan.

Question 12

A potential investor's single goal is to:
A)make as much money as possible.
B)minimise taxes and minimise losses.
C)avoid risk at all costs.
D)maximise returns while minimising personal risk.

Accepted Answer

The potential investor's single goal is to maximize returns while minimizing personal risk. It is important for the investor to balance risk and return to achieve their financial goals. Minimizing taxes and losses are important considerations, but they are not the primary goal. Avoiding risk at all costs is unrealistic, as every investment has some level of risk. The focus should be on managing risk to achieve the desired returns.

Question 13

In a business plan, the discussion of the management team should detail:
A)the proposed venture's organisational structure.
B)profiles of employee needs during the first three years of operation.
C)the projected growth of the proposed venture.
D)the intended distribution of ownership in the business.

Accepted Answer

The management team section should detail the proposed venture's organizational structure, including the roles and responsibilities of each member of the team. This information is crucial for investors and lenders to evaluate the validity of the proposed venture and determine whether the team has the necessary skills and experience to lead the business to success. Including profiles of employee needs and projected growth and intended distribution of ownership may be important in other sections of the business plan but are not specific to the management team discussion.

Question 14

In a business plan, the key statement in the financial plan is the:
A)break-even analysis.
B)estimate of returns and allowances.
C)salary expense statement.
D)cash flow statement.

Accepted Answer

The key statement in the financial plan is the cash flow statement, as it outlines the inflow and outflow of cash over a specific period of time. It shows how the company plans to generate revenue, manage expenses, and allocate capital. The cash flow statement is crucial in determining the financial health and sustainability of a business. While the other options may be important parts of the financial plan, they do not provide the same level of insight into the company's financial performance and future prospects.

Question 15

Peter is writing about the potential lack of customer acceptance of his product and possible reactions from competitors.Peter is writing the ____________ of the business plan.
A)critical risks section
B)executive summary
C)marketing plan
D)exit strategy

Accepted Answer

The critical risks section of a business plan is where potential risks that can impact the success of the business are identified and discussed. This includes potential lack of customer acceptance and reactions from competitors.

Question 16

The product/service plan section should include:
A)a description of the competition's products.
B)a description of the company's own product or service.
C)a listing of the weaknesses of the competition's product or service.
D)a statement of how the company intends to capture market share.

Accepted Answer

The product/service plan section should include a description of the company's own product or service. While it is important to be aware of the competition's products and weaknesses, the focus should be on describing the company's own offerings and how they will capture market share.

Question 17

A business plan should generally project financial and operational aspects of the proposed business for the first:
A)six months.
B)one year.
C)three to five years.
D)seven years.

Accepted Answer

A business plan should project financial and operational aspects for at least three to five years. This provides a long-term outlook and helps to assess the feasibility and sustainability of the proposed business.

Question 18

Quentin, a venture capitalist, is scanning Mildred's business plan to see if and when he can recoup his investment and make a profit.Quentin is looking for:
A)a financial plan.
B)a marketing plan.
C)an investment plan.
D)an exit strategy.

Accepted Answer

Quentin is specifically looking for an exit strategy, which outlines how and when he can recoup his investment and make a profit. A financial plan and marketing plan may be included in the business plan, but they do not address Quentin's specific concern about recouping his investment. An investment plan may also be included in the business plan, but it does not address Quentin's concern about making a profit.

Question 19

Nelson is writing about how he will attract and retain customers, how he will price his product, and how and where he will offer it for sale.Nelson is working on the __________ section of his business plan.
A)customer service
B)product/service plan
C)marketing plan
D)development plan

Accepted Answer

The marketing plan is focused on attracting and retaining customers, pricing the product/service, and determining where and how it will be offered for sale.

Question 20

John is a prospective entrepreneur who has just presented his business plan to a venture capitalist, enthusiastically pointing out the unique features of a new invention he is promoting.The most likely question in the venture capitalist's mind is:
A)How strong is the patent protection?
B)How costly will it be to produce the product?
C)What is the demand for the product?
D)What management skills does this venture have?

Accepted Answer

The venture capitalist's primary concern will likely be the potential demand for the product. While patent protection and production costs are important factors, ultimately the success of the venture will depend on whether there is a sufficient market for the product. Management skills are also important, but typically a venture capitalist will consider this factor after evaluating the market potential.

Quiz 6: The Business Plan: Visualizing the Dream

Plans that appeal effectively to investors are:

It is most important that the marketing plan:

The sources and uses table is a part of the ___________ of the business plan.

When describing the product in the business plan, the entrepreneur should:

When dealing with weaknesses in a business plan, the entrepreneur should:

In a business plan, the facilities and location of the proposed venture are described in the:

Ideally, investors like a business plan that shows evidence of:

Information about the experience of key executives should be placed in the _______ of the business plan.

Investors who review business plans typically:

Orlando has just finished the section describing his quality control methods and the need for specific equipment.Orlando has written the __________.

Items such as marketing research studies and the resumes of key executives are placed in the __________ of the business plan.

A potential investor's single goal is to:

In a business plan, the discussion of the management team should detail:

In a business plan, the key statement in the financial plan is the:

Peter is writing about the potential lack of customer acceptance of his product and possible reactions from competitors.Peter is writing the ____________ of the business plan.

The product/service plan section should include:

A business plan should generally project financial and operational aspects of the proposed business for the first:

Quentin, a venture capitalist, is scanning Mildred's business plan to see if and when he can recoup his investment and make a profit.Quentin is looking for:

Nelson is writing about how he will attract and retain customers, how he will price his product, and how and where he will offer it for sale.Nelson is working on the __________ section of his business plan.

John is a prospective entrepreneur who has just presented his business plan to a venture capitalist, enthusiastically pointing out the unique features of a new invention he is promoting.The most likely question in the venture capitalist's mind is: