Question 1

There are only two viewpoints from which a business plan should be written,the entrepreneur's and the financial source.

Accepted Answer

While the entrepreneur's perspective is important in creating a business plan, it is also important to consider the perspectives of other stakeholders such as potential customers, industry experts, and competitors. Additionally, a business plan should be written not only for financial sources, but also for internal purposes such as guiding the company's strategy and operations.

Question 2

The comprehensive business plan should be the result of
A)reflections on the direction of the venture.
B)continuous operations of the venture.
C)investor's promises of capital.
D)the entrepreneur's best guesses.

Accepted Answer

The comprehensive business plan should be the result of reflections on the direction of the venture. It should incorporate the entrepreneur's vision, market research, financial projections, marketing strategy, operations plan, and risk management plan. It should not be based solely on the entrepreneur's best guesses or investor promises of capital, as these may not be reliable indicators of the feasibility and success of the venture. Similarly, it should not be a static document, but should be continuously reviewed, updated, and refined as the venture evolves and new opportunities and challenges arise.

Question 3

A "niche" is a homogeneous group with common characteristics (i.e.,all the people who have a need for a newly proposed product or service).

Accepted Answer

This definition of a niche is correct. A niche is a group of individuals who share common characteristics or have a need for a specific product or service.

Question 4

The entrepreneur should expect to encounter a friendly and supportive audience when presenting the business plan to potential financial sources.

Accepted Answer

Potential financial sources, such as investors or lenders, critically evaluate business plans to assess risk and potential return on investment, often leading to challenging questions and a need for convincing evidence of success.

Question 5

Factors that must be addressed when planning a new venture include setting realistic goals,determining milestones,making a commitment,and having flexibility.

Accepted Answer

These are all important factors that should be considered when planning a new venture. Realistic goals help set a clear direction for the business, milestones help track progress, making a commitment ensures dedication to the venture, and flexibility allows for adaptability and adjustment to changes in the market.

Question 6

The pro forma balance sheet is used in the critical risk segment of the business plan.

Accepted Answer

The pro forma balance sheet is used to project future financial positions, not specifically for the critical risk segment. The critical risk segment typically addresses potential challenges and risks the business may face.

Question 7

An entrepreneur is much better off preparing his or her own business plan rather than hiring someone else,even if more experienced,to prepare it.

Accepted Answer

An entrepreneur who prepares his or her own business plan gains a better understanding and ownership of the plan, which helps in executing and revising the plan as needed. Additionally, the entrepreneur's passion and vision for the business will be reflected in the plan, which might not be the case if someone else prepares it.

Question 8

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 to be considered in the management segment because it determines how tasks and responsibilities are allocated within an organization, how decisions are made, and how communication flows. It also affects the flexibility and adaptability of the organization to changes in the market and industry. While suppliers, location of the plant, and product design are important considerations in business operations, they are not specific to management.

Question 9

An important guideline in putting the plan together is
A)to overdiversify.
B)to not highlight critical risks.
C)to identify the target market.
D)to impress with excessive detail

Accepted Answer

Identifying the target market is an important guideline in putting the plan together as it helps to determine the direction of the plan and tailor it to the needs of the intended audience. Overdiversifying or impressing with excessive detail can lead to confusion and dilute the effectiveness of the plan, while not highlighting critical risks can leave the business vulnerable to unexpected challenges.

Question 10

Which of the following statements would not be an appropriate guideline for successful business plan development?
A)Avoid exaggeration.
B)Orient the plan to the present.
C)Highlight critical risks.
D)Do not overdiversify.

Accepted Answer

The guideline to orient the business plan to the present is not appropriate as a successful business plan needs to anticipate the future and set compelling visions and goals. The other statements (avoid exaggeration, highlight critical risks, do not overdiversify) are appropriate guidelines for successful business plan development.

Question 11

The easiest way to avoid the pitfall of no commitment or dedication is to designate that the venture is a hobby or a whim.

Accepted Answer

Designating a venture as a hobby or a whim will not necessarily prevent the lack of commitment or dedication. It is important to set clear goals and expectations, as well as establish a sense of accountability, in order to ensure dedication and commitment to a venture.

Question 12

After delivering a pitch,it is not acceptable to question venture capitalists who turn down a funding opportunity.

Accepted Answer

It is acceptable to ask venture capitalists for feedback and reasons why they turned down the opportunity. This can provide valuable insights for improving future pitches and overall business strategy. However, it is important to remain professional and respectful in these interactions.

Question 13

Which of the following describes advantages of the business plan for financial sources?
A)The plan identifies critical risks.
B)The plan helps assess the entrepreneur's family.
C)the plan identifies sources of capital.
D)all of the above.

Accepted Answer

The answer of Which of the following describes advantages of...

Question 14

A business plan must illustrate the current status of the venture but not the projected results.

Accepted Answer

A business plan should not only illustrate the current status of the venture but also provide projected results and financial projections for the future. These projections are an essential part of the planning process and can help potential investors or lenders make informed decisions.

Question 15

To an entrepreneur,one of the benefits of a business plan is
A)the development of operating strategies for outside evaluators.
B)benchmarks for comparing forecasts with actual results.
C)both a and b.
D) neither a nor b.

Accepted Answer

A business plan provides not only a blueprint for how the business will operate, but also serves as a tool for outside evaluators to assess the potential for success. Additionally, the plan includes financial forecasts and performance benchmarks against which actual results can be compared, helping entrepreneurs to identify and adjust for any discrepancies or problems.

Question 16

Which of the following statements is not part of the "five-minute reading" by venture capitalists?
A)Determine the characteristics of the venture and industry.
B)Determine the strengths and weaknesses of the entrepreneur.
C)Determine the financial structure of the plan.
D)Read the latest balance sheet.

Accepted Answer

The answer of Which of the following statements is not...

Question 17

The business plan is the entrepreneur's road map for a successful enterprise.

Accepted Answer

The business plan is a detailed document that outlines the objectives, strategies, and financial projections of a business. It serves as a road map for entrepreneurs to guide them in the creation and management of their enterprise.

Question 18

A business plan is
A)a written document that details the proposed venture.
B)an instance of entrepreneurial passion
C)the result of the new business.
D)a blueprint of the product.

Accepted Answer

A business plan is a written document that outlines in detail how a business, usually a new one, is going to achieve its goals. It typically includes information about the company, market analysis, strategies, financial projections, and management team.

Question 19

The completed business plan provides the entrepreneur with
A)a tool for communicating with financial sources.
B)a sense of well-being.
C)a product-launch timetable.
D)a nicely designed booklet.

Accepted Answer

The completed business plan is a crucial tool for communicating with potential financial sources such as investors or lenders. It outlines the entrepreneur's business idea, market analysis, financial projections, and more, and provides a clear picture of the investment opportunity.

Question 20

An indicator of the planning pitfall of "failure to anticipate roadblocks" is
A)recognition of future problems.
B)making no admission of possible flaws in the plan.
C)having a contingency or alternative plan.
D)pursuing a good work force.

Accepted Answer

Making no admission of possible flaws in the plan indicates that the planner has not considered potential roadblocks and is not prepared for them. Option A and C suggest that the planner has considered and prepared for potential roadblocks, and option D is not directly related to the planning pitfall of failure to anticipate roadblocks.

Quiz 12: Developing an Effective Business Plan

There are only two viewpoints from which a business plan should be written,the entrepreneur's and the financial source.

The comprehensive business plan should be the result of

A "niche" is a homogeneous group with common characteristics (i.e.,all the people who have a need for a newly proposed product or service).

The entrepreneur should expect to encounter a friendly and supportive audience when presenting the business plan to potential financial sources.

Factors that must be addressed when planning a new venture include setting realistic goals,determining milestones,making a commitment,and having flexibility.

The pro forma balance sheet is used in the critical risk segment of the business plan.

An entrepreneur is much better off preparing his or her own business plan rather than hiring someone else,even if more experienced,to prepare it.

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

An important guideline in putting the plan together is

Which of the following statements would not be an appropriate guideline for successful business plan development?

The easiest way to avoid the pitfall of no commitment or dedication is to designate that the venture is a hobby or a whim.

After delivering a pitch,it is not acceptable to question venture capitalists who turn down a funding opportunity.

Which of the following describes advantages of the business plan for financial sources?

A business plan must illustrate the current status of the venture but not the projected results.

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

Which of the following statements is not part of the "five-minute reading" by venture capitalists?

The business plan is the entrepreneur's road map for a successful enterprise.

A business plan is

The completed business plan provides the entrepreneur with

An indicator of the planning pitfall of "failure to anticipate roadblocks" is