Question 1

An executive summary should:
A)explain the basic business model and the problem the business will solve for customers.
B)briefly describe the owners and key employees,target market(s),and financial highlights.
C)briefly describe the company's competitive advantage.
D)All of the above

Accepted Answer

An executive summary should include all of the above elements to provide a comprehensive overview of the business, its market, its advantages, and its financial potential. This allows readers to quickly and effectively understand the purpose and potential of the business.

Question 2

A ________ is what a customer gains from the product or service feature.
A)feature
B)bonus
C)discount
D)benefit

Accepted Answer

A benefit is what a customer gains from a product or service feature. Features are the attributes of the product or service, while benefits are the advantages that the customer receives from those features. Bonuses and discounts are additional perks that may be offered to customers, but they are not necessarily directly related to the product or service features.

Question 3

What is the competitive test?
A)It evaluates the company's relative position to its key competitors.
B)It identifies the competitors only.
C)It finds their address and phone numbers.
D)None of the above

Accepted Answer

The competitive test evaluates the company's relative position to its key competitors by analyzing their strengths, weaknesses, market share, pricing strategies, and other relevant factors. Option B is incorrect because identifying competitors is only a part of the competitive analysis process. Option C is irrelevant because finding their address and phone numbers is not relevant to competitive analysis. Option D is incorrect because the competitive test is a well-established concept used in business strategy.

Question 4

The executive summary should contain which of the following information?
A)A brief statement of the financial needs of the business and what the money would be used for
B)A short description of potential buyers
C)A brief history of the business
D)A complete description of your business

Accepted Answer

The executive summary should give a brief statement of the financial needs of the business and what the money would be used for.

Question 5

The C of the five Cs that relates to the circumstances relating to the business,such as potential growth in the market,form of ownership,location,etc. ,is called:
A)capital.
B)capacity.
C)conditions.
D)character.

Accepted Answer

The C of the five Cs that relates to the circumstances surrounding the business is called conditions. This includes factors such as the potential for growth in the market, the form of ownership, the location of the business, etc. Capital refers to the financial resources the business has available, while capacity refers to the business's ability to meet demand. Character refers to the ethical and moral values of the business owner or management team.

Question 6

A ________ is a descriptive fact about a product or service.
A)feature
B)product summary
C)benefit
D)None of the above

Accepted Answer

A feature is a factual or descriptive characteristic of a product or service. Examples of features include size, color, weight, and material used in the product.

Question 7

One technique involves ________,in which entrepreneurs test their business models on a small scale before committing serious resources to a business that might not work.
A)a test run
B)business prototyping
C)duplicate business models
D)model prototyping

Accepted Answer

Business prototyping involves testing business models on a small scale to minimize resources and risks. Test runs can be a part of this technique, but the term "business prototyping" better encompasses the entire process. Duplicate business models and model prototyping are not accurate descriptions of this technique.

Question 8

The form of ownership in your company should be explained in the ________ portion of the business plan.
A)business strategy
B)plan of operation
C)executive summary
D)market analysis

Accepted Answer

The plan of operation section discusses the day-to-day management and ownership structure of the company, making it the appropriate section to explain the form of ownership. The business strategy section focuses on overall goals and objectives, the executive summary is a brief overview of the entire plan, and the market analysis section analyzes the industry and target market.

Question 9

A description of the key factors that will dictate the success of your business quality,price competitiveness,etc.should be contained in the ________ section of the business plan.
A)market analysis
B)executive summary
C)description of the business
D)competitor analysis

Accepted Answer

The section that usually contains a description of the business and its key factors for success is the "description of the business" section of the business plan. This section typically outlines the company's mission statement, products or services offered, target audience, and competitive advantage. It is important to clearly articulate the factors that will differentiate the business from its competitors and contribute to its success.

Question 10

What is the synonym for capacity?
A)Capital
B)Cash flow
C)Collateral
D)Credit

Accepted Answer

The answer of What is the synonym for capacity?
A)Capital
B)Cash flow
C)Collateral
D)Credit...

Question 11

Any assets pledged to the bank as security for repayment of the loan are the ________ of the five Cs.
A)collateral
B)capacity
C)capital
D)conditions

Accepted Answer

Collateral refers to any assets pledged as security for a loan repayment. It is one of the five Cs of credit, which also include capacity, capital, character, and conditions.

Question 12

The intangible C that lenders examine in evaluating the business plan is that of:
A)capital.
B)character.
C)collateral.
D)capacity.

Accepted Answer

Character refers to the personal integrity, reputation, and creditworthiness of the borrower, which is important to lenders as they want to ensure that the borrower will make good on their obligations and repay the loan. The intangible C of character is subjective and difficult to quantify, but it can greatly influence a lender's decision to approve or reject a loan application.

Question 13

Which statement is correct?
A)Lenders and investors are familiar with industry cost structures.
B)A lender's main consideration in granting a loan is the reassurance that the applicant will repay.
C)An investor's major concern is earning a satisfactory rate of return.
D)All of the above

Accepted Answer

All three statements are correct. Lenders and investors are familiar with industry cost structures, as they need to assess the financial viability of the borrowing or investment opportunity. A lender's main consideration is the reassurance that the applicant will repay, as they are taking on the risk of lending money. An investor's major concern is earning a satisfactory rate of return, as they are looking to invest their money to generate a profit.

Question 14

The phrase,"avoid the off-the-shelf,'cookie-cutter' approach that produces look-alike plans" means:
A)avoiding a business plan that looks ordinary.
B)that every business plan is unique.
C)the business plan should reflect the excitement of the entrepreneur.
D)All of the above

Accepted Answer

The phrase suggests that one should avoid generic, standardized approaches in creating business plans, implying that each plan should be unique, reflect the entrepreneur's excitement, and not look ordinary.

Question 15

Your cash budget and an explanation of how much money you need to make your company and product a long-term success are the subject matter of the:
A)financial plan.
B)strategic plan.
C)business strategic plan.
D)strategic action plan.

Accepted Answer

The cash budget, which outlines the expected inflows and outflows of cash for a given period, is part of the financial plan. The financial plan is a component of the overall business plan, which may also include a strategic plan and a strategic action plan. The financial plan is crucial for determining the amount of money needed to make the company and its products a long-term success.

Question 16

A great source that profiles a variety of industries and offers projections for the future trends is:
A)the Handbook.
B)an encyclopedia.
C)the Beige Book.
D)the Blue Book.

Accepted Answer

The Beige Book is a report published by the Federal Reserve that provides information on current economic conditions across various industries and regions, offering insights into future trends.

Question 17

Proving that a profitable market exists involves:
A)showing customer interest.
B)documenting market claims.
C)Both A and B
D)Neither A nor B

Accepted Answer

To prove that a profitable market exists, both showing customer interest (A) and documenting market claims (B) are important. Demonstrating that customers are interested in the product or service is crucial as it indicates potential demand. Documenting market claims involves providing evidence that the market size, growth rate, competition, and other relevant factors support the viability of the market. Only by combining both aspects can an entrepreneur convince investors or other stakeholders that there is a reasonable chance of success.

Question 18

A business plan presentation should cover:
A)the company's background and its products or services with a market analysis and a description of the opportunities it presents.
B)the company's competitive edge and the marketing strategies it will use to promote that edge.
C)the management team and its members' qualifications and experience.
D)All of the above

Accepted Answer

A business plan presentation should cover all of the above areas to provide a comprehensive overview of the company, its products/services, the market opportunities, the competitive edge, marketing strategies, and the management team's qualifications and experience. A well-rounded business plan can impress potential investors and stakeholders, helping the company to secure financial support and gain momentum in the market.

Question 19

You should identify your key people,explain their backgrounds and what they bring to the business,in:
A)the executive summary.
B)the description of the management team.
C)the strategic plan.
D)the business strategy.

Accepted Answer

The description of the management team is the most appropriate section to provide detailed information about key people and their backgrounds. This section should highlight the management team's strengths and experience, and explain how they will contribute to the success of the business. The executive summary is a brief overview of the business, and should only include the most important information. The strategic plan and business strategy may also mention key people, but they usually focus on the overall goals and direction of the business.

Question 20

An executive summary should be:
A)a snapshot of the entire plan.
B)3 to 5 pages.
C)written first.
D)All of the above

Accepted Answer

An executive summary is a snapshot of the entire plan, providing a brief overview of the most critical components of the document it summarizes. It is not necessarily 3 to 5 pages long, as the length can vary depending on the overall document size and complexity. Additionally, it is typically written last, even though it appears first in the final document, to ensure it accurately reflects the content.

Quiz 8: New Business Planning Process: Feasibility Analysis,business Modeling,

An executive summary should:

A ________ is what a customer gains from the product or service feature.

What is the competitive test?

The executive summary should contain which of the following information?

The C of the five Cs that relates to the circumstances relating to the business,such as potential growth in the market,form of ownership,location,etc. ,is called:

A ________ is a descriptive fact about a product or service.

One technique involves ________,in which entrepreneurs test their business models on a small scale before committing serious resources to a business that might not work.

The form of ownership in your company should be explained in the ________ portion of the business plan.

A description of the key factors that will dictate the success of your business quality,price competitiveness,etc.should be contained in the ________ section of the business plan.

What is the synonym for capacity?

Any assets pledged to the bank as security for repayment of the loan are the ________ of the five Cs.

The intangible C that lenders examine in evaluating the business plan is that of:

Which statement is correct?

The phrase,"avoid the off-the-shelf,'cookie-cutter' approach that produces look-alike plans" means:

Your cash budget and an explanation of how much money you need to make your company and product a long-term success are the subject matter of the:

A great source that profiles a variety of industries and offers projections for the future trends is:

Proving that a profitable market exists involves:

A business plan presentation should cover:

You should identify your key people,explain their backgrounds and what they bring to the business,in:

An executive summary should be: