Entrepreneurship Chapter 4 Prep

A letter that introduces and explains an accompanying documents or set of documents

• executive summary

• pro forma financial statement

• business plan

• cover letter

A financial statement based on projected revenues and expenses

• Executive summary

• pro forma financial statement

• business plan

• cover letter

A short restatement of a report

• executive summary

• pro forma financial statement

• business plan

• cover letter

A written document that describes all the steps necessary for opening and operating a successful business

• Executive summary

• pro forma financial statement

• business plan

• cover letter

A business plan is NOT intended for

• your competition

• potential investors

• your bank

• any of theses

Purposes of a business plan include which of the following?

• It explains your idea for a product or service

• it sets specific objectives and describes how they will be achieved

• it describes the backgrounds and experience of the people who will run the business

• all of these

A business plan is important for all of the following reasons EXCEPT

• It makes you think about all aspects of your business

• it helps you communicate your ideas to others

• It guarantees you will get financing for your business

• It can serve as a tool for managing your business

Which of the following is NOT a true statement regarding risks?

• Identifying the possible risks your business faces will alarm lenders and investors and cause them to withhold funds

• Potential investors and lenders want to know the risks your business faces and how you plan to deal with them

• Lenders will appreciate the fact that you know the risks you face and have a plan for dealing with them

• Lendors know that every business faces risks

The purpose of including supporting documents in a business plan is to

• make the plan lengthy

• provide additional information

• give the readers more information than you might need

• explain your business idea

Writing a business plan

• is a quick and easy process

• is quick but difficult

• requires patience, research, thought, and time

• none of these