WorksheetsBusiness Plan Quiz 4
Total questions: 70
Worksheet time: 35mins
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
Which of the following is not an individual, group or institution that normally reads a company's business plan?
Board of directors
potential alliance partners and major customers
state and local government officials
key recruits for jobs with the new firm
rank-and-file employees
Which of the following is not a recommended guideline for writing a business plan?
To make the best impression, a business plan should follow an unconventional structure and stand out in some dramatic way.
A business plan needs to project a sense of anticipation and excitement about the possibilities that surround a new venture.
For most plans, 20 to 30 pages is sufficient.
A business plan should look sharp, but not a lot of money should be spent on the physical appearance of the plan.
Shy away from using a lot of boldfaced type, italics, clip art, and different font sizes and colors when preparing a business plan.
Which of the following is not one of the 'red flags' listed in the textbook that raises questions about one or more aspects of a company's business plan?
founders with none of their own money at risk
defining the market size too narrowly
a poorly cited plan
sloppiness in any area
overly aggressive financials
Which of the following is one of the 'red flags' listed in the textbook that raises questions about one or more aspects of a company's business plan?
takes several days or weeks to complete
founders that have their own money at risk
defining the market size too broadly
less than 29 pages long
directed towards both an external and an internal audience
Which of the following statements is incorrect regarding business plans?
A firm's business plan is typically the first aspect of a proposed venture that will be seen by an investor.
To make the best impression, a business plan should follow an unconventional structure, so it will stand out.
A business plan has both an external and an internal audience.
A company's business plan is typically written by its founders.
Potential investors are typically keenly interested in a company's business plan.
For most business plans, how many pages are sufficient?
40 to 50
30 to 40
15 to 20
25 to 35
5 to 10
There are three types of business plans:
functional business plan, full business plan, feasibility plan
summary business plan, contingency plan, full business plan
functional business plan, contingency plan, full business plan
opportunity plan, feasibility plan, full business plan
summary business plan, full business plan, operational business plan
Zachery Mays is in the very early stages of putting together a business startup, and is thinking about writing a business plan to request funds to conduct a feasibility analysis and write a more complete business plan. What type of business plan should Zachery write at this point?
full business plan
tactical business plan
summary business plan
operational business plan
strategic business plan
A(n) _____, which is typically 25 to 35 pages long, works best for new ventures who are at the point where they need funding or financing
tactical business plan
strategic business plan
summary business plan
full business plan
operational business plan
A(n) _____, which is intended to be a blueprint for a company's operations, is 40-100 pages long and is meant primarily for an internal audience.
operational business plan
full business plan
deliberate business plan
summary business plan
tactical business plan
Edward Andrews has decided to write a business plan that is intended to be read primarily by his staff, which will present a blueprint for his company's entire operation and will provide guidance to operational managers. Edward should write a:
operational business plan
tactical business plan
strategic business plan
summary business plan
functional business plan
Match the business plan with its appropriate length:
operational business plan, 10-15 pages
full business plan, 25-35 pages
summary business plan, 25-35 pages
full fusiness plan, 40 to 100 pages
operational business plan, 25-35 pages
Match the business plan with its appropriate emphasis:
Summary business plan, works best for companies who are at the point where they need funding or financing; serves as a "blueprint" for the company's operations.
Operational business plan, works best for companies in the early stages of development that want to "test the waters" to see if investors are interested in their idea.
Full business plan, works best for companies in the early stages of development that want to "test the waters" to see if investors are interested in the idea.
Summary business plan, is meant primarily for an internal audience; works best as a tool for creating a blueprint for a company's operations and providing guidance to operational managers.
Summary business plan, works best for companies in the early stages of development that want to "test the waters" to see if investors are interested in their idea.
The Savvy Entrepreneurial Firm feature for Chapter 4 focuses on three companies: Box.net, Pixability, and Groupon. The overarching point of the feature is:
most business plans require major changes after the business is launched and the founders start getting customer feedback
the degree to which business plans pan out as their founders envisioned varies
most business plans require only minor changes after the business is launched and the founders start getting customer feedback
the most effective business plans take four to eight weeks to complete
most business plans are quickly discarded after the business is launched
The _______ is a short overview of the entire business plan.
summary statement
executive summary
managerial review
founder's introduction
abstract
Which of the following statements is incorrect regarding the executive summary of a business plan?
It is a short overview of the entire business plan.
In many instances, an investor will first ask for a copy of a firm's executive summary and will request a copy of the full business plan only if the executive summary is sufficiently convincing.
It is arguably the most important section of the business plan.
It should not exceed two single-spaced pages.
The executive summary is the first thing that should be written in preparing a business plan.
Paul Hempken just spoke to an investor, who is interested in his business idea. Paul offered to send the investor a copy of his full business plan, but the investor asked for a short overview of the business plan instead. What portion of his business plan should Paul send the investor?
marketing plan
executive summary
elevator pitch
company description
operations plan
According to the textbook, in many instances an investor will first ask for a copy of a firm's _____ and will request a copy of the full business plan only if that portion of the plan is sufficiently convincing.
appendix
industry analysis
operations plan
financial plan
executive summary
Which of the following statements is incorrect regarding the industry analysis portion of a firm's business plan?
It is important to focus simultaneously on a business's industry and its target market.
Industry structure refers to how concentrated or fragmented an industry is.
Most industries have 5 to 19 key success factors that should be reported in the industry analysis.
Industry trends should be discussed, which include both environmental and business trends.
The industry analysis should conclude with a brief statement of your beliefs regarding the long-term prospects for the industry.
A company's mission statement should be placed in the ______ section of its business plan.
marketing plan
management team and company structure
company description
market analysis
industry analysis
Industry structure refers to how:
concentrated or fragmented an industry is
traditional or progressive an industry is
innovative or conservative an industry is
hierarchical or flat an industry is
large or small an industry is
A(n) _______ describes why a company exists and what it aspires to become.
tactical statement
values statement
mission statement
operations statement
strategic statement
A(n) _______ in a business plan context, is a noteworthy event in the past or future development of a business.
aspiration
intention
signpost
milestone
target
The _______ section of a business plan breaks the industry into segments and zeroes in on the specific segment (or target market) to which the firm will try to appeal.
competitive analysis
current status
market analysis
marketing plan
operations plan
A competitor analysis should be included in the _______ section of a business plan.
market analysis
industry analysis
company description
management team and company structure
operations plan
The Partnering for Success feature in Chapter 4 focuses on the types of partnerships that are common in business plans. According to the feature, businesses often make partnering an essential part of their business plans because they:
want to obtain a key customer
want to increase their visibility
want to reduce risk
want to appear legitimate
have limited resources
What section of the business plan addresses the basic logic of how profits are earned in the business?
Economics of the Business
Operations Plan
Executive Summary
Design and Development plan
Market Analysis
Operating leverage is highest in companies that have:
a service rather than a manufacturing emphasis
virtually no fixed costs
equal variable costs and fixed costs
a high proportion of variable costs relative to their fixed costs
a high proportion of fixed costs relative to their variable costs
Which of the following statements is incorrect regarding the marketing plan section of a business plan?
The marketing plan focuses on how the business will market and sell its product or service.
The two most important items to include in a marketing plan are (1) overall marketing strategy and (2) the nuts and bolts of marketing a firm's product in terms of product, price, promotion, and place.
The best way to describe a company's marketing plan is to begin by talking about its competitors.
A firm's marketing strategy refers to its overall approach for marketing its products and services.
A firm's overall approach to marketing typically boils down to how it positions itself in its market and how it differentiates itself from its competitors.
A computer-generated image of an invention that displays the invention as a 3D model that can be viewed from all sides and rotated 360 degrees is called a:
virtual prototype
concept visualization
abstract prototype
virtual design
usability test
A prototype is:
a form of opportunity recognition
a tool for evaluating the industry a new firm plans to enter
a financial model
the first physical depiction of a new product
a tool for evaluating the organizational prowess of a new firm
What section of the business plan deals with the day-to-day operations of a company?
financial plan
marketing plan
operations plan
industry analysis
executive summary
The facilities and equipment that a business needs should be described in the _______ section of its business plan.
marketing plan
management team and company structure
company description
market analysis
operations plan
According to the textbook, many investors and others who read business plans look first at the executive summary and then go directly to the __________ section of the business plan to make their preliminary assessment.
management team and company structure
product or service design and development plan
industry analysis
marketing plan
operations plan
A(n) _______ is a graphic representation of how authority and responsibility are distributed within a company.
organizational chart
personnel chart
human resources chart
administrative chart
directional chart
The document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for is referred to as a:
sources and uses of funds statement
assumptions sheet
pro forma financial statement
credit and debit statement
capital and operational budgeting statement
Kate Payne was reading the business plan for New Venture Fitness Drinks, and noticed that prior to its financial statements, New Venture Fitness Drinks placed an explanation of the sources of the numbers for the statements and the assumptions used to generate them. This explanation is called a(n):
estimate sheet
hypothesis sheet
assumptions sheet
forecast sheet
forecast hypothesis
According to the textbook, the _______ are the heart of the financial section of a business plan.
financial ratios
pro forma financial statements
budgets
sources and uses of funds statements
break-even analyses
Most business plan writers interpret or make sense of a firm's historical and/or pro forma financial statements through:
ratio analysis
assumptions analysis
scenario analysis
proportion analysis
relative analysis
According to the textbook, the first rule in making an oral presentation is to:
follow instructions
be creative
emphasize all the positive aspects of a business venture
appear confident
do something out of the ordinary
A commercialization plan is a written narrative that describes what a new business plans to accomplish and how it plans to accomplish it.
True
False
According to a Wells Fargo/Gallup Small Business Study cited in the book, a large percentage of entrepreneurs write business plans for their ventures.
True
False
For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm.
True
False
A business plan can usually be completed in one to three days
True
False
There are two primary audiences for a firm's business plan: the firm's employees and investors, as well as other external stakeholders.
True
False
To make the best impression, a business plan should follow a conventional structure.
True
False
For most business plans, 25 to 35 pages are sufficient.
True
False
According to the textbook, the executive summary is arguably the most important section of the business plan.
True
False
The executive summary is a lengthy overview of the entire business plan.
True
False
A company's industry analysis and target market analysis are usually included in the same section of its business plan.
True
False
Fragmented industries are more receptive to new entrants than industries that are dominated by a handful of large firms.
True
False
A tagline is a phrase that a business uses to reinforce its position in the marketplace.
True
False
A competitor analysis, which is a detailed analysis of a firm's competitors, should be included in the market analysis section of its business plan.
True
False
The major revenue drivers, which are the ways a business earns money, should be first identified in "The Economics of the Business" section of the business plan.
True
False
A firm's operating leverage is an analysis of its debt versus its equity.
True
False
The management team and company structure section of a business plan is one of the lesser read sections.
True
False
An organizational chart is a graphic representation of how authority and responsibility are distributed within a company.
True
False
A sources and uses of funds statement is a document that lays out specifically how much money a firm needs, where the money will come from, and what the money will be used for.
True
False
The pro forma financial statements are the heart of the operations section of a business plan.
True
False
The first rule in making oral presentation is to follow instructions.
True
False
