question

The chapter takes the view that the self-examination required to develop a tight, well written business plan is more important than the plan itself.

answer

True

question

The business plan must establish that there is an opportunity worth exploiting and must detail how to take advantage of it

answer

True

question

Business planning, in a literal sense, begins when you start to look for external funds

answer

False

question

It's a common misperception that a business plan is primarily used for raising capital

answer

True

question

Since the executive summary is the most important part of the finished plan, an entrepreneur should write that section first, in order to frame the rest of the plan.

answer

False

question

An important end result of the business planning process is that it allows the entrepreneur to articulate the business opportunity to various stakeholders in the most effective manner.

answer

True

question

Market analysis looks at current trends in the market; anticipating future trends is reserved for later steps in the business planning process

answer

false

question

Both positive and negative trends will help shape the businesses.

answer

True

question

The biggest risk any new venture faces is dilution of equity

answer

False

question

As mentioned in earlier chapters and reiterated in this chapter, "cost plus" pricing is the best strategy, because it wastes the least amount of time.

answer

False

question

Your distribution strategy can define your company's fortune as much as the product itself.

answer

True

question

Examining how customers currently acquire similar products is a poor use of time for an entrepreneur launching an innovative, new product.

answer

False

question

Detailed financial investigation of comparable companies, because the results can lead to deceptive conclusions.

answer

...

question

It is appropriate to discuss the geographic location of production facilities and how this enhances your firm's competitive advantage.

answer

True

question

The Scope of Operations section should discuss partnerships with vendors, suppliers, and partners.

answer

True

question

A development strategy includes a schedule that highlights major milestones for the venture.

answer

False

question

An 'A' entrepreneur with a 'B' idea is better than a 'B' entrepreneur with an 'A' idea."

answer

True

question

A simple, flat organization chart is often useful to visualize what roles you have filled and what gaps remain.

answer

True

question

The Board of Directors' primary role is to oversee the company on behalf of the employees, and to that end the board has the power to replace top executives if it feels doing so would be in the best interests of the staff.

answer

False

question

Strategic partners are required by law to be offered seats on your Board of Directors

answer

False

question

It is important to explain why the team's compensation is appropriate

answer

True

question

Entrepreneurs often enter markets and find, to their surprise, either that direct competition does not exist, or that it is complacent and slow to react.

answer

False

question

The appendices of a business plan can include anything and everything that you think adds further validation to your concept, but does not fit in the main parts of the plan.

answer

True

question

A three-ring binder filled with initial intelligence can be a good starting point in the business planning process.

answer

True

question

The biggest difference between an internal operation plan and the one that you might present to a potential investor is the level of detail, which tends to be greater in the disclosure to the investor.

answer

False

question

1) Which of the following is a reason that business planning can help entrepreneurs to articulate the business opportunity to stakeholders? A. The plan provides background information that enables the entrepreneur to communicate the upside potential to investors. B. It provides the validation needed to convince potential employees to leave their current jobs for the uncertain future of a new venture. C. It can help secure a strategic partner, D. It can help secure a key customer, or supplier. E. All of the above.

answer

E

question

2) A proper organization is critical to making a business plan easy to read. Thus, it should include which of the following? A. Major sections B. Sub-sections C. Exhibits D. Appendices E. All of the above

answer

E

question

3) Which of the following is the most important part of the business plan? A. Executive Summary B. Operations C. Team D. Critical Risks E. Financial Plan

answer

A

question

4) Which of the following subsections is traditionally NOT placed in the executive summary? A. Description of opportunity B. Industry overview C. Critical risks D. Competitive advantage E. Team and offering

answer

C

question

5) When an entrepreneur understands who his customers are, he can assess _____: A. what compels them to make purchases. B. how his company can sell to them. C. the cost of sales. D. how his company can retain customers. E. All of the above.

answer

E

question

6) A company's sales channels can include all of the following except: A. Internal sales stream B. Retail C. Internet D. Cost reduction E. Direct mail

answer

D

question

7) If business planning predicts that your gross margins will be 5%, you would be best advised to: A. redesign your concept or abandon your concept. B. keep your business small so that you can manage costs. C. focus on guerilla marketing to target a niche. D. All of the above E. None of the above

answer

A

question

8) What are the two methods of forecasting future revenues, as stated in the chapter? A. The comparable method and the build-up method; B. The comparable method and the distributed method; C. The distributed method and the precise method; D. The random method and the precise method; E. None of the above

answer

A

question

9) Which of the following is NOT a common category in the critical risks section? A. Market Interest and Growth Potential B. Competitor Actions and Retaliation C. Time and Cost of Development D. Operating Expenses E. Offering of Financing

answer

E

question

10) Which of the following is the key to creating visual catch-points in a business plan? A. Write long, descriptive paragraphs B. Use clearly marked headers and sub-headers throughout the document. C. Maintain 1 inch margins on the sides and top and ½ inch on bottom. Single spaced text. D. None of the above. E. All of the above

answer

B

question

11) When writing a business plan it is best to: A. Use a creative format to capture the investor's attention. B. Lead the plan with the TEAM section because investors often focus on the team members, rather than the idea. C. Follow a common outline because it helps spot reading. D. Avoid appendices because nobody reads them. E. All of the above.

answer

C

question

12) Which of the following is not a standard subsection of a marketing plan? A. Product strategy; B. Market strategy of the competitors; C. Pricing strategy; D. Distribution strategy; E. Sales strategy.

answer

B

question

13) Which of the following is a common subsection of an Operations plan? A. Operations strategy; B. Scope of operations; C. Ongoing operations; D. All of the above; E. None of the above.

answer

D

question

14) In the development plan, which issue should be the focus? A. Development strategy; B. Development timeline; C. Development segments; D. Both A and B; E. None of the above.

answer

D

question

15) How can entrepreneurs minimize risk? A. Market research; B. Focus groups; C. Beta testing; D. All of the above; E. None of the above.

answer

D

question

16) Considering competitor actions and reactions, which of the following would be dangerous for entrepreneurs? A. Assuming that competitors will be the same tomorrow as they are today. B. Identifying future competitors that might enter the market. C. Considering when and how your technology might become obsolete. D. None of the above; E. All of the above.

answer

A

question

17) Which of the following is not a goal of business planning? A. To attract various stakeholders; B. To help entrepreneurs gain a deeper understanding of the opportunity; C. To convince stakeholders of the business potential; D. To inform competitors of your intentions E. To convince potential employees to join.

answer

D

question

18) The best way to develop a winning business plan is to: A. Have an accountant develop your financials; B. Hire your professor to write the plan; C. Go through several iterations to refine the strategy and business model; D. Don't bother writing a plan, it is not an efficient use of time; E. All of the above.

answer

C

question

19) Which of the following is NOT in the operations plan? A. Locations B. Insurance C. Employees D. Suppliers E. Customers.

answer

B

question

20) Which of the following is not in the contents of marketing plan? A. Marketing communications; B. Growth strategy. C. Product mix D. Pricing; E. Customer analysis.

answer

B

question

21) Many of the big names in retail revolutionized and unified fragmented markets. Which of the following should NOT be on such a list? A. Microsoft; B. Walmart; C. Staples; D. Home Depot; E. All should be on the list

answer

A

question

22) To truly understand your customers, you MUST ___ A. tell them why they need your product.B. hire the best marketing research firm available. C. listen carefully and adapt based upon what they say. D. advertise in multiple media forms, like the Internet. E. All of the above

answer

C

question

23) Entrepreneurs should focus on the key success factors that often lead a customer to buy one product over another, such as___. A. Price B. Quality C. Speed D. All of the above; E. None of the above.

answer

D

question

24) One of the most pressing challenges for entrepreneurs is to maintain adequate levels of cash. Which of the following is the best way to ensure that a lack of cash does not bankrupt your startup? A. Raise initial capital. B. Give your customers, both businesses and individuals, generous credit terms. C. Carefully monitor your burn rate. D. Avoid accepting too much early capital in exchange for diluting your equity. E. Answers A and B

answer

C

question

25) If you are thinking about venturing into a market and cannot find any competitors, what should you do as an entrepreneur? A. Begin raising capital. B. Examine additional opportunities within the same competitive arena. C. Focus on product quality. D. Expand your definition of the market. E. None of the above.

answer

D

question

1) Inexperienced entrepreneurs often believe the misconception that a business plan is solely designed as a brochure for investors. The financial benefits of using a business plan to raise capital are well known. What are some additional benefits?

answer

It helps to shape their original vision into a better opportunity, it helps provide the validation needed to convince potential employees to leave their current jobs, it can also help secure a strategic partner, supplier, or customer.

question

2) Generally speaking, what is the greatest benefit of the business planning process?

answer

The business planning process provides the entrepreneur with the deep understanding she needs to answer the critical questions these various stakeholders will ask. Completing a well-founded business plan gives the entrepreneur credibility in the eyes of each group. Subsequently, the entrepreneur understands the business and the opportunity more thoroughly and is able to better articulate both to various stakeholders. a) First, the plan provides background information that enables the entrepreneur to communicate the upside potential to investors. b) Second, it provides the validation needed to convince potential employees to leave their current jobs for the uncertain future of a new venture. c) Finally, it can also help secure a strategic partner, key customer, or supplier

question

3) What factors should be kept in mind when we are preparing the cover of the business plan?

answer

The cover should include the following information: company name, tagline, contact person, address, phone, fax, email, date, disclaimer, and copy number. it should contain a disclaimer controlling distribution, It should also have a line stating which number copy it is.

question

4) What kind of information in a business plan do entrepreneurs need to provide?

answer

A hook to capture the reader's attention Description of Opportunity Business Concept Industry Overview Target Market Financials Appendices Critical risks Competitive Advantage Business Model and Economics Team and Offering

question

5) What are the key issues in the Industry Section?

answer

Current market size, how much you expect it to grow in the future, what kind of market you are facing, industry economics. Describe your overall market in terms of revenues, growth, and future trends that are pertinent.

question

6) How should entrepreneurs introduce the basic details of their company, before moving on to a more detailed analysis of the marketing and operations plans?

answer

Provide a brief overview of the concept for the company, and then highlight what the company has achieved to date. b) Take some time to communicate the product and its differentiating features. c) Identify market entry and growth strategies. d) Finally, sell the entrepreneur's vision for the company's long term growth potential.

question

7) What are the critical risks entrepreneurs need to identify in the business plan?

answer

Market interest and growth potential, competitor actions and retaliation, time and cost of development, operating expenses, availability and timing of financing

question

8) What slides are useful in oral presentations of your business?

answer

1. Cover page showing product picture, company name, and contact information, 2.opportunity description emphasizing customer problem or need that you hope to solve, 3. Illustration of how your product or service solves the customer's problem 4. Some details (as needed) to better describe your product, 5. competition overview, 6. Entry and growth strategy showing how you get into the market and then grow 7. Overview of your business model- how you will make money and how much it will cost to support those sales, 8. Team description, 9. current status with time line, 10. Summary including how much money you need and how it will be used

question

9) Why should entrepreneurs go out and interview potential customers, especially in the early conceptualization stages?

answer

This process helps you create a better product that is more likely to gain customer acceptance than if you boldly and blindly charge ahead with your initial concept.

question

10) What are the primary components of marketing plan section in a business plan? Describe them.

answer

Target market strategy, product/service strategy, pricing strategy, distribution strategy, marketing communications strategy, sales strategy, sales and marketing forcasts

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