Question 1

Which of the following should be done to avoid the pitfall of "no market niche" (segment)?
A)Conduct a market analysis.
B)Analyze the expected needs of the new business.
C)Clearly target a niche.
D)Create a market niche.

Accepted Answer

Clearly targeting a niche ensures that the business has a specific group of customers to focus on, avoiding the pitfall of "no market niche."

Question 2

How should an entrepreneur prepare to present his or her business plan?

Accepted Answer

The answer of How should an entrepreneur prepare to present...

Question 3

Which of the following should be included in the business description?
A)the name of each investor
B)industry background
C)potential disadvantages of the venture
D)a list of suppliers

Accepted Answer

Industry background provides context and understanding of the venture's operating environment.

Question 4

The recommended length of a business plan is
A)about 100 pages.
B)about 25 pages.
C)no more than 150 pages.
D)10 pages, at the maximum.

Accepted Answer

The recommended length of a business plan is about 25 pages. This length is generally considered sufficient to cover all necessary information without being overly lengthy, making it more accessible and engaging for readers such as investors or partners.

Question 5

Which of the following is a critical factor to be considered in the management segment?
A)suppliers
B)location of the plant
C)organizational structure
D)product design

Accepted Answer

Organizational structure is a critical factor in the management segment as it determines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims. It influences how the organization operates and performs, and it facilitates the flow of information within the organization.

Question 6

It is important that an entrepreneur
A)seek the assistance of outside professionals to prepare a business plan.
B)develop an entrepreneurial team to organize the plan.
C)prepare his or her own plan.
D)develop a rough business plan and then seek outside professional assistance.

Accepted Answer

An entrepreneur should prepare his or her own plan to ensure they fully understand and are committed to the business vision and strategy.

Question 7

According to the textbook author, a pitfall to avoid in planning is lack of
A)priorities.
B)profit orientation.
C)future vision.
D)illustrations.

Accepted Answer

Lack of priorities is a pitfall to avoid in planning because it can lead to confusion, wasted time, and missed deadlines.

Question 8

Which of the following is not an important aspect of an entrepreneurial venture that must be described in a business plan?
A)current status
B)expected needs
C)family support
D)projected results

Accepted Answer

Family support, while potentially beneficial, is not a fundamental aspect that must be described in a business plan. Business plans typically focus on the venture's current status, expected needs, and projected results to inform investors and guide the business's development.

Question 9

To an entrepreneur, one of the benefits of a business plan is that it identifies
A)profit strategies.
B)benchmarking measures for comparing forecasts with actual results.
C)critical risks.
D)potential sources of financing.

Accepted Answer

A business plan identifies critical risks that the entrepreneur may face while running the business.

Question 10

A critical point to be included in the business description is
A)sales projections.
B)the business cycle.
C)key personnel.
D)potential market advantages.

Accepted Answer

The answer of A critical point to be included in...

Question 11

Which of the following helps an entrepreneur avoid the pitfall of not having realistic goals?
A)identifying a niche market
B)setting up a timetable of specific steps
C)following up on professional appointments
D)developing employee zeal

Accepted Answer

Setting up a timetable of specific steps helps an entrepreneur avoid the pitfall of not having realistic goals by providing a structured plan to achieve them, making goals more tangible and measurable.

Question 12

Entrepreneurs can best orient their plans toward the future by
A)informing investors of how wealthy they will be in five years.
B)developing trends and forecasts that describe what the venture intends to do.
C)identifying opportunities for future investment
D)planning 20 years ahead.

Accepted Answer

Developing trends and forecasts helps entrepreneurs create a strategic plan that outlines the venture's future intentions and direction, making it more adaptable to changes and opportunities.

Question 13

A business plan should illustrate
A)the current status of a related enterprise.
B)the projected results of the new business.
C)the desires of competitors.
D)changes in borrowing practices.

Accepted Answer

A business plan should illustrate the projected results of the new business, including financial forecasts, market analysis, and strategic goals.

Question 14

How does a business plan benefit the entrepreneur?

Accepted Answer

The answer of How does a business plan benefit the...

Question 15

Surprisingly, entrepreneurs frequently forget to include _____ in the business plan.
A)the name of the company
B)the return address or phone number
C)the month and year the plan is issued
D)a customer endorsement

Accepted Answer

The answer of Surprisingly, entrepreneurs frequently forget to include _____...

Question 16

Which of the following is something an entrepreneur should not do when preparing for the oral presentation of a business plan?
A)Organize the presentation.
B)Develop an outline of the plan.
C)Memorize the presentation.
D)Practice the presentation.

Accepted Answer

Memorizing the presentation can make it sound rehearsed and unnatural, reducing the effectiveness of communication. It's better to understand the material well and speak naturally.

Question 17

What are some of the errors made in the preparation of a business plan that minimize an entrepreneur's chance for success?

Accepted Answer

The answer of What are some of the errors made...

Question 18

The business plan provides the details of the _____ potential of a business.
A)market
B)product growth
C)financial growth
D)entrepreneurial

Accepted Answer

The business plan outlines the market potential of a business, detailing its target market, competition, and expected market share, which are crucial for understanding its viability and strategy for success.

Question 19

A financial source that reads a business plan derives which of the following beneficial information?
A)the venture's ability to service debt or provide an adequate return on equity
B)favorable lease terms
C)opinions about proposed business regulations
D)probability of future employment with the business

Accepted Answer

The business plan outlines the financial projections and strategies of the venture, allowing a financial source to assess its potential for servicing debt and generating returns on equity.

Question 20

Which of the following statements may be the most important in new venture creation?
A)pro forma balance sheet
B)income statement
C)cash-flow statement
D)profit statement

Accepted Answer

The cash-flow statement is crucial for new venture creation as it tracks the flow of cash in and out of the business, helping to ensure that the venture has enough liquidity to meet its obligations and continue operations.

Quiz 12: Developing an Effective Business Plan

Which of the following should be done to avoid the pitfall of "no market niche" (segment) ?

How should an entrepreneur prepare to present his or her business plan?

Which of the following should be included in the business description?

The recommended length of a business plan is

Which of the following is a critical factor to be considered in the management segment?

It is important that an entrepreneur

According to the textbook author, a pitfall to avoid in planning is lack of

Which of the following is not an important aspect of an entrepreneurial venture that must be described in a business plan?

To an entrepreneur, one of the benefits of a business plan is that it identifies

A critical point to be included in the business description is

Which of the following helps an entrepreneur avoid the pitfall of not having realistic goals?

Entrepreneurs can best orient their plans toward the future by

A business plan should illustrate

How does a business plan benefit the entrepreneur?

Surprisingly, entrepreneurs frequently forget to include _____ in the business plan.

Which of the following is something an entrepreneur should not do when preparing for the oral presentation of a business plan?

What are some of the errors made in the preparation of a business plan that minimize an entrepreneur's chance for success?

The business plan provides the details of the _____ potential of a business.

A financial source that reads a business plan derives which of the following beneficial information?

Which of the following statements may be the most important in new venture creation?