Business Plan Quiz 4

Lincoln & Lexi, the company profiled in the opening feature for Chapter 4, was founded to:

• sell consulting services to e-commerce sites

• provide nanny and tutoring services

• sell jewelry online

• sell iPhone apps for casual gamers

• sell children's clothing through home parties and baby showers

Martin Nelson is thinking about launching a small business consulting company. To get advice on how to proceed, he stopped by his local Small Business Administration (SBA) office. The SBA advisor told Martin that one of the first things he needs to do is to sit down and write a:

• tactical plan

• marketing plan

• operations plan

• business plan

• feasibility analysis

Which of the following is the main purpose for writing a business plan?

• The plan helps the company develop a roadmap to follow.

• The plan introduces potential investors and other stakeholders to the business opportunity.

• Both A and B are equally important.

• Neither A nor B captures the true purpose of a business plan.

• Reason A is the most important for experienced entrepreneurs and reason B is the most important for inexperienced entrepreneurs.

According to the text, a business plan is best described as a:

• narrative description of a new business

• contract

• budget

• agreement

• marketing initiative

According to the text, only ___ of the 99 entrepreneurs that participated in a recent Wells Fargo/ Gallup Small Business Study indicated that they had started their venture with a business plan.

• 1% percent

• 31 percent

• 49 percent

• 69 percent

• 74 percent

A business plan is important for two reasons: it forces the founding team to systematically think through every aspect of their new venture and:

• it is a budget

• it is a public relations document that can be used to promote the firm

• it is a contract that is signed by the founders of the firm

• it is a financial analysis

• it communicates the merits of a new venture to outsiders, such as investors and bankers

Which of the following statement is incorrect about business plans?

• Writing a business plan forces a firm's founders to systematically think through each aspect of their new venture.

• For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm.

• A business plan is typically 20 to 30 pages long.

• A large percentage of entrepreneurs do not write business plans for their new ventures.

• The business plan should be written while the feasibility analysis is being completed.

The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the:

• business plan

• feasibility analysis

• opportunity analysis

• industry analysis

• marketing plan

There are two primary audiences for a business plan:

• a firm's employees and officials with the SEC

• a firm's customers and its competitors

• investors and other external stakeholders and public relations firms

• officials with the SEC and public relations firms

• a firm's employees and investors and other external stakeholders

There are two primary audiences for a business plan: investors and other external stakeholders and:

• officials with the SEC

• a firm's employees

• a firm's competitors

• a firm's customers

• public relations firms