Question 1

The business planning process is dynamic and ongoing.

Accepted Answer

The business planning process is dynamic and ongoing because it requires continuous review and adjustment to respond to internal and external changes, such as market trends, competition, and financial conditions.

Question 2

A business plan is used to evaluate the feasibility of a new e-business.

Accepted Answer

A business plan is essential for evaluating the feasibility of a new e-business as it outlines the business model, market analysis, financial projections, and operational strategies, helping to assess its viability and potential for success.

Question 3

Creating and developing a business plan forces an entrepreneur to take a sharp look at his or her e-business idea.

Accepted Answer

A business plan requires detailed analysis and planning, compelling the entrepreneur to thoroughly examine the feasibility, strategies, and potential challenges of the e-business idea.

Question 4

A formal business plan follows a rigid set of rules for its content and formatting.

Accepted Answer

A formal business plan can be flexible in its content and formatting, tailored to the audience's needs and the specific goals of the business, rather than following a rigid set of rules.

Question 5

The goal of a business plan for a startup e-business is to help a reader clearly understand the e-business idea and when and how the e-business expects to become profitable.

Accepted Answer

A business plan for a startup e-business outlines the business idea, market analysis, marketing and operational plans, and financial projections, including profitability timelines, to provide a clear understanding of the business to potential investors, partners, and other stakeholders.

Question 6

It is a good idea to number each copy of a business plan and to keep a list of who has each copy.

Accepted Answer

Numbering each copy of a business plan and keeping a list of who has each copy helps in tracking the distribution and maintaining confidentiality of the business plan.

Question 7

Because it is important to have a professional-looking business plan, you must bind each copy with a custom cover.

Accepted Answer

A professional-looking business plan does not necessarily require a custom cover or binding; what matters most is the content, clarity, and presentation of the plan itself.

Question 8

A business plan should have a table of contents that lists all the major plan sections and subsections by page number.

Accepted Answer

A table of contents in a business plan helps readers easily navigate through the document, allowing them to find specific sections or information quickly.

Question 9

The first step in preparing a business plan is to create its table of contents.

Accepted Answer

The first step in preparing a business plan is typically to conduct a thorough market analysis, not to create its table of contents. The table of contents is usually prepared after the main sections of the plan have been developed.

Question 10

The executive summary section is considered by many to be the most important section of a business plan because potential investors typically use it to quickly weed out those plans in which they have no interest.

Accepted Answer

The executive summary provides a concise overview of the business plan, highlighting key points and objectives, which allows investors to quickly assess the viability and potential of the business, making it a crucial section for attracting interest.

Question 11

The minimum length for a business plan's executive summary is five pages.

Accepted Answer

An executive summary is typically one to two pages long, providing a brief overview of the main points of the business plan.

Question 12

A business plan's marketplace analysis section should include information about the specific industry in which the business will operate.

Accepted Answer

The marketplace analysis section of a business plan is designed to provide an overview of the industry, including trends, size, and growth prospects, which helps in understanding the specific market the business will operate in.

Question 13

The products or services section of a business plan should identify a business's targeted customers and major competitors.

Accepted Answer

The products or services section of a business plan is primarily focused on detailing the specific products or services the business plans to offer, including their features, benefits, and how they meet the needs of the market. Identifying targeted customers and major competitors is typically covered in the market analysis section.

Question 14

An overview of major marketing objectives and strategies should be included in the marketplace analysis section of a business plan.

Accepted Answer

The marketplace analysis section of a business plan typically includes an overview of major marketing objectives and strategies to understand the competitive environment and define how the business will position itself in the market.

Question 15

The financial plan section of a business plan describes a business's physical location and equipment as well as the manufacturing or service actions necessary to get the business's products and services to customers.

Accepted Answer

The financial plan section of a business plan primarily outlines the business's financial projections, funding requirements, and revenue model, rather than detailing its physical location, equipment, or operational processes.

Question 16

The operational plan section of a business plan created for an e-business should also contain information on the operations of its Web site and how online activities are integrated into overall operations.

Accepted Answer

The operational plan section of a business plan, especially for an e-business, should detail the operations of its website and how online activities are integrated with overall operations to ensure a comprehensive understanding of how the business functions both online and offline.

Question 17

Pro forma (or projected) financial statements included in a business plan are based on current assumptions of future estimates of income, expense, and cash flow.

Accepted Answer

Pro forma financial statements are forward-looking and are based on assumptions and estimates about future income, expenses, and cash flows.

Question 18

A planned cash flow statement indicates the value of a business's assets, liabilities, and ownership equity at a specific point in time.

Accepted Answer

A planned cash flow statement forecasts the cash that is expected to flow in and out of a business over a future period, not the value of its assets, liabilities, and ownership equity. The statement you described is more accurately associated with a balance sheet.

Question 19

A projected income statement shows a business's anticipated revenues, expenses, and net profit or loss over a specific period of time.

Accepted Answer

A projected income statement is indeed a financial document that estimates a company's future revenues, expenses, and net profit or loss for a given period, helping in financial planning and analysis.

Question 20

The management plan section of a business plan includes information about a new business's key employees, advisors, mentors, and consultants.

Accepted Answer

The management plan section of a business plan outlines the organizational structure and details about key personnel, including employees, advisors, mentors, and consultants, to demonstrate the business's capability to succeed.

Quiz 3: Creating an E-Business Plan