review chap 5

What is a business plan?

• • Written document that only outlines the business practices of the new business.

• • Written document that describes the financial aspects of the business.

• • Written document that only describes the ownership of the business.

• • Written document describing all

    relevant internal and external elements and strategies for starting a new venture

Why do you need a business plan ?

• • To explain your idea

• • The ability to get financing

• • To help reduce the risk of business failure.

• • It's a road map that sets objectives and goals for the business.

• • All of the above.

What is one of the initial pieces of information an entrepreneur needs to determine when assessing market potential for a product or service?

• • The best locations for production facilities

• • The size of the market by defining the target market

• • The projected financial profits for the first year

• • The most effective advertising channels

What should an entrepreneur include when preparing the financial section of a business plan?

• A list of potential investors

• A list of all possible expenditures in the first year and all revenue sources

• A detailed marketing strategy

• A timeline for business expansion

Which of the following information is NOT mentioned as necessary for a feasibility study of manufacturing operations?

• Location and its accessibility to customers, suppliers, and distributors

• Identification of basic machine and assembly operations

• Detailed marketing strategy for product launch

• List of raw materials and their suppliers

• Cost and acquisition method for equipment