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Q:
For most business plans ________ pages are sufficient.
A) 40 to 50
B) 30 to 40
C) 15 to 20
D) 25 to 35
E) 5 to 10
Q:
Which of the following statements is incorrect regarding business plans?
A) A firm's business plan is typically the first aspect of a proposed venture that will be seen by an investor.
B) To make the best impression, a business plan should follow an unconventional structure, so it will stand out.
C) A business plan has both an external and an internal audience.
D) A company's business plan is typically written by its founders.
E) Potential investors are typically keenly interested in a company's business plan.
Q:
Which of the following is one of the "red flags" listed in the textbook that raises questions about one or more aspects of a company's business plan?
A) takes several days or weeks to complete
B) founders that have their own money at risk
C) defining the market size too broadly
D) less than 50 pages long
E) directed towards both an external and an internal audience
Q:
Which of the following is not one of the "red flags" listed in the textbook that raises questions about one of more aspects of a company's business plan?
A) founders with none of their own money at risk
B) defining the market size too narrowly
C) a poorly cited plan
D) sloppiness in any area
E) overly aggressive financials
Q:
Which of the following is not a recommended guideline for writing a business plan?
A) To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way.
B) A business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture.
C) For most plans, 25 to 35 pages is sufficient.
D) A business plan should look sharp, but not a lot of money should be spent on the physical appearance of the plan.
E) Shy away from using a lot of boldfaced type, italics, clip art, and different font sizes and colors when preparing a business plan.
Q:
Which of the following is not an individual, group or institution that normally reads a company's business plan?
A) board of directors
B) potential alliance partners and major customers
C) state and local government officials
D) key recruits for jobs with the new firm
E) rank-and-file employees
Q:
There are two primary audiences for a business plan: investors and other external stakeholders and:
A) officials with the SEC
B) a firm's employees
C) a firm's competitors
D) a firm's customers
E) public relations firms
Q:
There are two primary audiences for a business plan:
A) a firm's employees and officials with the SEC
B) a firm's customers and its competitors
C) investors and other external stakeholders and public relations firms
D) officials with the SEC and public relations firms
E) a firm's employees and investors and other external stakeholders
Q:
The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the:
A) business plan
B) feasibility analysis
C) opportunity analysis
D) industry analysis
E) marketing plan
Q:
Which of the following statement is incorrect about business plans?
A) Writing a business plan forces a firm's founders to systematically think through each aspect of their new venture.
B) For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm.
C) A business plan is typically 25 to 35 pages long.
D) A large percentage of entrepreneurs do not write business plans for their new ventures.
E) The business plan should be written while the feasibility analysis is being completed.
Q:
A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:
A) it is a budget
B) it is a public relations document that can be used to promote the firm
C) it is a contract that is signed by the founders of the firm
D) it is a financial analysis
E) it communicates the merits of a new venture to outsiders, such as investors and bankers
Q:
According to the textbook, only ________ of the 600 entrepreneurs that participated in a recent Wells Fargo/Gallup Small Business Study indicated that they had started their venture with a business plan.
A) 12 percent
B) 31 percent
C) 20 percent
D) 6 percent
E) 48 percent
Q:
According to the textbook, a business plan is best described as a(n):
A) narrative description of a new business
B) contract
C) budget
D) agreement
E) marketing initiative
Q:
Which of the following is the main purpose for writing a business plan?
A) The plan helps the company develop a "road map" to follow.
B) The plan introduces potential investors and other stakeholders to the business opportunity.
C) Both A and B are equally important.
D) Neither A nor B captures the true purpose of a business plan.
E) Reason A is the most important for experienced entrepreneurs and reason B is the most important for inexperienced entrepreneurs.
Q:
Martin Nelson is thinking about launching a small business consulting company. To get advice on how to proceed, he stopped by his local Small Business Administration (SBA) office. The SBA advisor told Martin that one of the first things he needs to do is to sit down and write a 25 to 35 page narrative that describes what his new business plans to accomplish and how it plans to accomplish it. The SBA advisor is telling Martin to write a(n):
A) tactical plan
B) marketing plan
C) operations plan
D) business plan
E) feasibility analysis
Q:
A) sell consulting services to e-commerce sites
B) provide nannie and tutoring services
C) sell jewelry online
D) sell iPhone apps for casual gamers
E) sell children's clothing through home parties and baby showers
Answer: E
Q:
Why is the "management team and company structure" section of the business plan often given disproportionate weight among investors?
Q:
What is an "executive summary?" Why is the executive summary often called the most important part of a business plan?
Q:
Experienced entrepreneurs often refer to business plans as "living, breathing documents." What is meant by this characterization of business plans?
Q:
What are the two main reasons for writing a business plan?
Q:
What is a business plan?
Q:
The first rule in making oral presentation is to follow instructions.
Q:
The pro forma financial statements are the heart of the operations section of a business plan.
Q:
A sources and uses of funds statement is a document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for.
Q:
An organizational chart is a graphic representation of how authority and responsibility are distributed within a company
Q:
The management team and company structure section of a business plan is one of the lesser read sections.
Q:
A firm's operating leverage is an analysis of its debt versus its equity.
Q:
The major revenue drivers, which are the ways a business earns money, should be first identified in "The Economics of the Business" section of the business plan.
Q:
A competitor analysis, which is a detailed analysis of a firm's competitors, should be included in the market analysis section of its business plan.
Q:
A tagline is a phrase that a business uses to reinforce its position in the marketplace.
Q:
Fragmented industries are more receptive to new entrants than industries that are dominated by a handful of large firms.
Q:
A company's industry analysis and target market analysis are usually included in the same section of its business plan.
Q:
The executive summary is a lengthy overview of the entire business plan.
Q:
According to the textbook, the executive summary is arguably the most important section of the business plan.
Q:
For most business plans, 25 to 35 pages are sufficient.
Q:
To make the best impression, a business plan should follow a conventional structure.
Q:
There are two primary audiences for a firm's business plan: a firm's employees and investors and other external stakeholders.
Q:
A business plan can usually be completed in one to three days.
Q:
For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm.
Q:
According to a Wells Fargo/Gallup Small Business Study cited in the book, a large percentage of entrepreneurs write business plans for their ventures.
Q:
A commercialization plan is a written narrative that describes what a new business plans to accomplish and how it plans to accomplish it.
Q:
According to the textbook, the first rule in making an oral presentation is to:
A) follow instructions
B) be creative
C) emphasize all the positive aspects of a business venture
D) appear confident
E) do something out of the ordinary
Q:
Most business plan writers interpret or make sense of a firm's historical and/or pro forma financial statements through:
A) ratio analysis
B) assumptions analysis
C) scenario analysis
D) proportion analysis
E) relative analysis
Q:
According to the textbook, the ________ are the heart of the financial section of a business plan.
A) financial ratios
B) pro forma financial statements
C) budgets
D) sources and uses of funds statements
E) break-even analyses
Q:
Kate Payne was reading the business plan for New Venture Fitness Drinks, and noticed that prior to its financial statements, New Venture Fitness Drinks placed an explanation of the sources of the numbers for the statements and the assumptions used to generate them. This explanation is called a(n):
A) estimate sheet
B) hypothesis sheet
C) assumptions sheet
D) forecast sheet
E) forecast hypothesis
Q:
The document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for is referred to as a(n):
A) sources and uses of funds statement
B) assumptions sheet
C) pro forma financial statement
D) credit and debit statement
E) capital and operational budgeting statement
Q:
A(n) ________ is a graphic representation of how authority and responsibility are distributed within a company.A) organizational chartB) personnel chartC) human resources chartD) administrative chartE) directional chart
Q:
According to the textbook, many investors and others who read business plans look first at the executive summary and then go directly to the ________ section of the business plan to make their preliminary assessment.
A) management team and company structure
B) product (or service) design and development plan
C) industry analysis
D) marketing plan
E) operations plan
Q:
The facilities and equipment that a business needs should be described in the ________ section of its business plan.
A) marketing plan
B) management team and company structure
C) company description
D) market analysis
E) operations plan
Q:
What section of the business plan deals with the day-to-day operations of a company?
A) financial plan
B) marketing plan
C) operations plan
D) industry analysis
E) executive summary
Q:
A prototype is:
A) a form of opportunity recognition
B) a tool for evaluating the industry a new firm plans to enter
C) a financial model
D) the first physical depiction of a new product
E) a tool for evaluating the organizational prowess of a new firm
Q:
A computer-generated image of an invention that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a(n):
A) virtual prototype
B) concept visualization
C) abstract prototype
D) virtual design
E) usability test
Q:
Which of the following statements is incorrect regarding the marketing plan section of a business plan?
A) The marketing plan focuses on how the business will market and sell its product or service.
B) The two most important items to include in a marketing plan are (1) overall marketing strategy and (2) the nuts and bolts of marketing a firm's product in terms of product, price, promotion, and place.
C) The best way to describe a company's marketing plan is to begin by talking about its competitors.
D) A firm's marketing strategy refers to its overall approach for marketing its products and services.
E) A firm's overall approach to marketing typically boils down to how it positions itself in its market and how it differentiates itself from its competitors.
Q:
Operating leverage is highest in companies that have:
A) a service rather than a manufacturing emphasis
B) virtually no fixed costs
C) equal variable costs and fixed costs
D) a high proportion of variable costs relative to their fixed costs
E) a high proportion of fixed costs relative to their variable costs
Q:
The ________ section of the business plan addresses the basic logic of how profits are earned in the business.
A) Economics of the Business
B) Operations Plan
C) Executive Summary
D) Design and Development plan
E) Market Analysis
Q:
The Partnering for Success feature in Chapter 4 focuses on the types of partnerships that are common in business plans. According to the feature, businesses often make partnering an essential part of their business plans because they:A) want to obtain a key customerB) want to increase their visibilityC) want to reduce riskD) what to appear legitimateE) have limited resources
Q:
A competitor analysis should be included in the ________ section of a business plan.
A) market analysis
B) industry analysis
C) company description
D) management team and company structure
E) operations plan
Q:
The ________ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.
A) competitive analysis
B) current status
C) market analysis
D) marketing plan
E) operations plan
Q:
A(n) ________, in a business plan context, is a noteworthy event in the past or future development of a business.
A) aspiration
B) intention
C) signpost
D) milestone
E) target
Q:
A(n) ________ describes why a company exists and what it aspires to become.
A) tactical statement
B) values statement
C) mission statement
D) operations statement
E) strategic statement
Q:
Industry structure refers to how:
A) concentrated or fragmented an industry is
B) traditional or progressive an industry is
C) innovative or conservative an industry is
D) hierarchical or flat an industry is
E) large or small an industry is
Q:
A company's mission statement should be placed in the ________ section of its business plan.
A) marketing plan
B) management team and company structure
C) company description
D) market analysis
E) industry analysis
Q:
Which of the following statements is incorrect regarding the industry analysis portion of a firm's business plan?
A) It is important to focus simultaneously on a business's industry and its target market.
B) Industry structure refers to how concentrated or fragmented an industry is.
C) Most industries have 6 to 10 key success factors that should be reported in the industry analysis.
D) Industry trends should be discussed, which include both environmental and business trends.
E) The industry analysis should conclude with a brief statement of your beliefs regarding the long-term prospects for the industry.
Q:
According to the textbook, in many instances an investor will first ask for a copy of a firm's ________ and will request a copy of the full business plan only if that portion of the plan is sufficiently convincing.
A) appendix
B) industry analysis
C) operations plan
D) financial plan
E) executive summary
Q:
Paul Hempken just spoke to an investor, who is interested in his business idea. Paul offered to send the investor a copy of his full business plan, but the investor asked for a short overview of the business plan instead. What portion of his business plan should Paul send the investor?
A) marketing plan
B) executive summary
C) elevator pitch
D) company description
E) operations plan
Q:
Briefly describe the purpose of the First Screen and how it's used.
Q:
Describe the purpose of industry/target market feasibility analysis, and identify the two primary issues that should be considered. What is the difference between a firm's industry and its target market?
Q:
What is gumshoe research and why is it important?
Q:
Describe what a concept statement is, and what it should include.
Q:
Describe the purpose of feasibility analysis. When should a feasibility analysis be conducted relative to opportunity recognition and the development of a business plan?
Q:
First Screen is a template for completing industry analysis
Q:
The mechanics for filling out a First Screen worksheet are complicated.
Q:
The most important issues to consider in financial feasibility analysis are: total startup cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.
Q:
For financial feasibility analysis, a very detailed and comprehensive financial analysis is required.
Q:
In regard to management prowess, two of the most important factors in this area are the passion that the solo entrepreneur or the management team has for the business idea and the extent to which the management team or solo entrepreneur understands the markets in which the firm will participate.
Q:
A new venture team is the group of founders, key employees, and advisers that either manage or help manage a new business in its startup years.
Q:
There are two primary areas to consider in organizational feasibility analysis: management prowess and resource sufficiency.
Q:
The focus in organizational feasibility analysis is on financial resources.
Q:
Organizational feasibility analysis is conducted to determine whether a proposed business venture has sufficient management expertise, organizational competence, and resources to successfully launch its business.
Q:
Industry/target market feasibility is an assessment of the overall appeal of the industry and the target market for the product or service being proposed.