Deck 12: Developing an Effective Business Plan

Question 1

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

Answer 1

False

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.

Answer 2

A

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).

Answer 3

True

Question 4

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

Question 5

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

Question 6

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

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.

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

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

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.

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.

Question 12

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

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.

Question 14

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

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.

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.

Question 17

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

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.

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.

Question 21

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

A)the pro forma balance sheet
B)the income statement
C)the cash flow statement
D)the profit statement

Question 22

How does a business plan benefit the entrepreneur?

Question 23

Competitive analysis,advertising plan,and pricing policy are all part of the

A)research, design, and development segment.
B)marketing segment.
C)milestone schedule segment.
D)financial plan segment.

Question 24

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

Question 25

The financial segment includes

A)the pro forma balance sheet.
B)the profit statement.
C)the cost statement.
D)the R & D statement.

Question 26

What is the significance of a harvest strategy segment in a business plan?

A)It is important for the entrepreneur to plan for a liquidity event as an exit strategy.
B)It is important for the entrepreneur to know how to buy up troubled companies.
C)It is important for the entrepreneur to indicate how the business will increase in value.
D)It is important for the entrepreneur to designate how the business will recruit new talent to the enterprise.

Question 27

Which of the following questions should an entrepreneur ask when a business plan is turned down?

A)"That means you do not know how to evaluate a good plan?"
B)"Can you identify friends who would like this kind of deal?"
C)"If you were in my position, how would you proceed?"
D)none of the above

Question 28

Should an entrepreneur attempt to make a business plan sound too good for an investor to turn down?

Question 29

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

Question 30

What is the basic structure of a business plan?