Deck 18: Appendix A: Guidelines for the Development of the Business Plan

Question 1

When preparing a business plan, you are encouraged to submit your idea for approval to your instructor as soon as possible.

Answer 1

True

Question 2

In a business plan, a business description identifies the target market and develops a strategy for appealing to it.

Answer 2

False

Question 3

When preparing a business plan, one of the decisions you will need to make regarding the marketing strategy is the type of product you want to offer.

Answer 3

True

Question 4

When preparing a business plan, one of the operational issues you need to resolve is determining how many personnel are needed and what their required education and skills should be.

Question 5

Which of the following is the best reason that you should submit your business plan idea to your instructor as early as possible?

A) to get feedback on ways to improve your idea
B) to pique your instructor's interest in your idea
C) to eliminate wasted effort on unfeasible ideas
D) to request your instructor's help in researching your idea
E) to make sure your idea is completely different from what other students are doing

Question 6

Christina's instructor asked each student in her class to develop a hypothetical business plan for a new and unique good, service, or business. Her idea is to start a new online beauty consulting firm. What is the first thing she should do to start this project?

A) write an executive summary for her business
B) create a marketing plan for her business
C) do some online research to see if similar businesses exist
D) talk to owners of similar businesses to make sure her idea is feasible
E) submit her idea to her instructor for approval

Question 7

Business plan proposals will be evaluated based on

A) whether your business will ultimately succeed or fail.
B) their thoroughness and your ability to provide support for the idea.
C) the originality of your idea.
D) your ability to sell your product to your peers.
E) your ability to show proven sales results.

Question 8

Joe is creating a business plan for a new robot that can do his homework for him. What element should his business proposal include?

A) a competitive analysis
B) a detailed product drawing
C) a detailed and final plan for producing the product
D) a comprehensive and fully developed marketing plan
E) a sample version of his product

Question 9

Bethany is developing a business proposal for a new vegetarian frozen foods brand. Her business description should include all of the following EXCEPT

A) an overview of the frozen vegetarian foods she wants to produce.
B) her vision for the proposed frozen vegetarian foods.
C) a reason that these frozen vegetarian foods should be produced.
D) a strategy for appealing to her target market.
E) a rationale for why she believes her business will succeed.

Question 10

Daniel wants to start a new spin studio. He believes that spin studios that exist as part of established gyms are not effective because spinning requires a dark room and loud music. He also doesn't like that most gyms only have a few spin classes per day. He plans to hire enough instructors to offer more classes throughout the day, not just during the high traffic morning and evening time frames. His overall purpose is to provide the optimal conditions for spinning and to start a community that works together to reach fitness goals through spinning. Which element of a business description does this scenario best describe?

A) a rationale
B) a mission
C) an objective
D) a competitive analysis
E) a target market analysis

Question 11

Which component of the brief marketing plan should be included in the business proposal?

A) selecting a name for the business
B) developing a reason for the business's existence
C) explaining why you want to start this business
D) revealing your vision for the business
E) indicating why this business will be successful given the market

Question 12

Debbie is preparing a business proposal for a new local art studio and store, called The Craft Collective. To describe the business, she wrote that her store would be a place where local artists could display and sell their pieces for a small fee. Since she wants to attract people who live in her community, she plans to hold monthly gallery shows with food and drinks to provide a sense of community among the artists and the locals. She believes that these events will encourage members of the community to buy unique artworks for their homes and offices. Which element of a business proposal does this scenario best describe?

A) a brief marketing plan
B) an executive summary
C) a human resources requirement
D) a business description
E) a competitive analysis

Question 13

Josh lives in a small town in New Hampshire, and he wants to open a new coffee shop in his town. He identifies that there are several corporate chain coffee shops in the area that offer the same options in all their locations. He believes that his community would rather support a local business than corporations and that the locals would prefer coffee drinks and pastries that appeal to their tastes, rather than generic offerings. Which element of a business proposal does this scenario best describe?

A) a brief marketing plan
B) a business description
C) an executive summary
D) a financial projection
E) a competitive analysis

Question 14

Which of the following should appear first in the final written business plan?

A) the business description
B) the industry and market analysis
C) the human resources requirement
D) the executive summary
E) the competitive analysis

Question 15

Gerald wants to open his own barbershop in his community. To demonstrate that his new business will be successful and to outline more specific details about his business, he prepares data, charts, and appendices. Which part of the final written business plan does this scenario best describe?

A) a business description
B) an executive summary
C) a competitive analysis
D) a marketing strategy
E) an industry and market analysis

Question 16

Which part of the final written business plan should include a discussion of the proposed form of the organization and a rationalization of the form chosen?

A) the marketing strategy
B) the executive summary
C) the industry and market analysis
D) the business description
E) the operational issues

Question 17

Which part of the final written business plan requires interpretation of statistics from the U.S. census and from local sources such as the Chamber of Commerce?

A) the competitive analysis
B) the marketing strategy
C) the industry and market analysis
D) the business description
E) the financial projection

Question 18

Glen has worked in the publishing industry for many years, and now, he wants to start his own independent trade publishing company. Which of the following describes something he would do when preparing his industry and market analysis?

A) He would describe the proposed form of organization and the rationalization of the form chosen.
B) He would create an exhaustive list of the primary and secondary competitors in the publishing industry.
C) He would develop a detailed rationale of the perceived differential advantage of his product offering in the publishing industry.
D) He would analyze the financial expenditures necessary to operate in the publishing industry.
E) He would identify the uncontrollable variables of the publishing industry.

Question 19

Which scenario best describes the competitive analysis part of the final written business plan?

A) Margot wants to start her own health foods company, so she develops a list of all the grocery stores, convenience stores, and health-related businesses in the area and determines what draws customers to each store.
B) Carolyn wants to start her own hair salon, so she must determine how she will differentiate her salon from others, promote her salon, and price her treatments and products to attract customers.
C) Malcolm wants to start his own auto mechanic shop, so he analyzes how many other mechanics have opened shops in the area to determine what his potential market size will be.
D) Steven wants to open a custom furniture store, so he must determine the proper location, facility type, leasing options, and supplier needed to successfully operate his business.
E) Melrose wants to open her own clothing store, but first, she must determine what will set her clothing apart and how she will most successfully promote her clothing to get customers into her store.

Question 20

All of the following are variables that need to be addressed as part of the marketing strategy EXCEPT

A) whether to set the price at the market, below market, or above market.
B) how to make or provide the product.
C) whether to promote the product with sales associates, advertising, sales promotions, or publicity.
D) how to best distribute the product.
E) what differentiates the product from others.

Question 21

Isabel has developed a new line of makeup. She has evaluated the pricing of makeup currently on the market and determined that selling her makeup slightly below market price will help her make more sales. She also decided it would be easier to promote and sell her makeup online and via home makeup parties. Her tagline on her website highlights that her makeup is made using natural ingredients, it is hypoallergenic, and it can be customized for specific customer needs. Since she is an individual creating these products, she is the only makeup provider who allows customers to request custom colors. Which part of the final written business plan does this scenario best describe?

A) the industry and market analysis
B) the executive summary
C) the marketing strategy
D) the business description
E) the competitive analysis

Question 22

Barry wants to open a new warehouse to produce children's toys. Which operational item must he consider when opening his warehouse?

A) sources of suppliers
B) the required skills of his personnel
C) his startup costs
D) the level of product distribution
E) the uncontrollable variables within the industry

Question 23

Carrie is starting her own small publishing firm, where she plans to develop apps about healthy food preparation and fitness. One of her primary objectives is to determine the software and hardware requirements that will be necessary to develop these digital products. Which part of the final written business plan does this scenario best describe?

A) the industry and market analysis
B) the executive summary
C) the business description
D) operational issues
E) the human resources requirement

Question 24

Jerome has started his own computer repair business. All of the following are things he needs to determine regarding the human resources requirement EXCEPT

A) realistic starting salaries.
B) the number of personnel needed.
C) a description of the personnel needed.
D) realistic required skills.
E) realistic required education.

Question 25

The statement of cash flows must be prepared for the first ________ months of the business.

A) 6
B) 3
C) 12
D) 9
E) 18

Question 26

Crystal is starting her own acting studio. In regard to financial projections, she must consider all of the following items EXCEPT

A) a breakeven analysis.
B) pricing strategy.
C) startup costs.
D) an estimation of cash inflows and outflows.
E) opening expenses.

Question 27

Briefly discuss the elements of a business proposal.

Question 28

Briefly discuss the parts of the final written business plan.