Q&A Hero

Q: Identify 5 of the 9 skill areas an entrepreneur should review in order to determine whether or not they need help writing parts of the business plan.

Q: Which of the following is not a common reason why business plans fail? A.objectives are not measurable B.no customer need was established C.the entrepreneur has no experience in the planned business D.the promotional strategy was not taken seriously

Q: ______ control compares the cost figures estimated in the business plan with actual day-to-day operations costs. A.Production B.Sales C.Inventory D.Costs

Q: By controlling __________, the firm can ensure maximum service to the customer. A.production B.sales C.costs D.inventory

Q: The tendency among many entrepreneurs is to: A.avoid planning. B.not take initiative. C.not market their product or services. D.lose focus on the business plan.

Q: The business plan is designed to guide the entrepreneur: A.through the distribution process. B.through the first year of operations. C.in the financing process. D.in case of a change in ownership.

Q: Which of the following documents is not usually included in the Financial Plan? A.Statement of cash flows B.Income statement C.Price lists from suppliers D.Projected balance sheet

Q: _______ identifies potential hazards and alternative strategies to meet business plan goals and objectives. A.Assessment of risk B.Financial planning C.Alternative planning analysis D.The financial plan

Q: The organization plan describes the business': A.physical plant and machinery layout. B.location as well as its plant(s). C.system of distribution. D.form of ownership.

Q: Distribution, pricing, and promotion of the product are discussed in which section of the plan? A.Marketing B.Production C.Merchandising D.Organization

Q: If the new venture is not a manufacturing operation, but a retail store or service, a new section of the business plan is required which is called the: A.organizational plan. B.operational plan. C.production plan. D.executive summary.

Q: Which of the following is not true about the operations plan portion of the business plan? A.Only service businesses need an operations plan. B.An operations plan describes the flow of goods and services from production to customer. C.The role of technology in the business transaction process is discussed. D.The shipping process and inventory control process can be discussed in this section.

Q: If the new venture is a manufacturing operation a(n) __________ in the business plan is necessary. A.ownership plan B.quality control plan C.production plan D.partnership agreement

Q: All of the following would be considering part of the description of the venture section of the business plan except: A.the business location. B.the history of the business. C.what equipment will be purchased. D.the projected statement of cash flows for the first year.

Q: The part of the plan that describes the location and size of the business, the personnel and office equipment that will be needed, and the history of the venture is called the: A.organizational plan. B.description of the venture. C.production plan. D.executive summary.

Q: All of the following are questions that should be considered in the environmental and industry analysis section of the business plan except: A.What are total industry sales over the past five years? B.Who are the nearest competitors? C.What is my promotional strategy? D.What is anticipated growth in this industry?

Q: An assessment of external uncontrollable variables that may impact the business plan is known as: A.an environmental analysis. B.a description of the venture. C.a trend analysis. D.an executive summary.

Q: The section of the business plan in which the entrepreneur identifies changes occurring on the national and international level is the: A.merchandising plan. B.description of the venture. C.executive summary. D.environmental and industry analysis.

Q: The executive summary section should: A.be prepared before the total plan is written. B.be about two to three pages in length. C.highlight key financial milestones that have been achieved. D.try to summarize every section of the plan.

Q: Which of the following is not a part of the introductory page? A.the name and address of the company B.statement of confidentiality C.amount of financing needed D.the names and addresses of all managers

Q: The usefulness of the title or introductory page is: A.that it provides information about the company. B.such that it requires several pages. C.questionable, especially to investors. D.that it contains backup data.

Q: To assess the potential profitability of a venture, the entrepreneur needs to ascertain expected sales and expense figures for the first: A.month. B.year. C.quarter. D.three years.

Q: When collecting marketing information the entrepreneur should: A.not include general environmental information. B.start with narrow-based data and work down to a more broader scope of information. C.identify competitors. D.not aim to define a specific market.

Q: All of the following would be an operations information need except: A.raw materials. B.break even numbers. C.equipment. D.labor skills.

Q: Which source of financial information is a compilation of 276,000 financial statements of banking customers with ratios and benchmarks? A.RMA eStatement Studies B.Market Share Reporter C.U.S. Census Statistical Abstracts D.Encyclopedia for American Industries and Mintel Reports

Q: Which U.S. Census publication provides information about production and shipments on a wide range of products? A.Service Annual Survey B.Current Industrial Report C.County Business Patterns D.Annual Survey of Manufacturers

Q: Which U.S. Census publication gives statistics such as industry outputs, inputs, and operating data on manufacturing activity, by industry groups? A.Service Annual Survey B.Current Industrial Report C.County Business Patterns D.Annual Survey of Manufacturers

Q: _____________ are good sources of information for financial and industry operating ratios. A.RMA eStatement Studies and BizMiner B.Market Share Reporter and the SBA report C.U.S. Census Statistical Abstracts and MarketLine D.Encyclopedia for American Industries and Mintel Reports

Q: Before beginning the business plan, the entrepreneur should define the venture's goals and objectives. These goals should be: A.general and broad. B.feasible. C.guaranteed. D.unique.

Q: The business plan presentation for potential investors: A.should be presented only in writing. B.should contain no negative projections. C.should enable the entrepreneur to "sell" his or her business concept in a designated period of time. D.should provide the entrepreneur's own perspective.

Q: Investors often place more emphasis on the entrepreneur's _________ than lenders do. A.character B.experience C.financial records D.personal viewpoint

Q: When evaluating business plans _________ are primarily concerned with the four Cs of credit. A.investors B.employees C.vendors D.lenders

Q: While preparing the first draft of the business plan, the entrepreneur should not: A.prepare it from his or her personal viewpoint. B.take into consideration the constituencies that will ultimately read and evaluate the plan's feasibility. C.prepare it with an aim to identify possible barriers to success. D.try to define the goals and objectives of the venture.

Q: ___________ is not one of the main perspectives an entrepreneur should consider when writing the business plan. A.The employee's perspective B.The marketing perspective C.The investor's perspective D.The entrepreneurs own perspective

Q: The depth and detail of a business plan depend on: A.the target audience. B.the size and scope of the new venture. C.the experience of the entrepreneur. D.the amount of capital needed.

Q: When determining how much help is needed to write the business plan an entrepreneur should conduct a self-assessment. In this self-assessment which skill set would not be considered? A.product design B.organizing C.venture capital D.people management

Q: Which of the following interested parties should not have access to the venture's business plan? A.Competitors B.Lenders C.Investors D.Suppliers

Q: Which of the following statements is(are) true? A.The business plan describes both internal and external elements. B.The preliminary business plan should be prepared by a lawyer. C.Most business plan resources on the Internet are too complex and expensive to be of use to the new venture. D.Once made, a business plan should not be changed.

Q: Which of the following is not true about Steve Hafner featured in the opening profile of chapter 7? A.Graduated from Dartmouth College B.Founded Expedia early in his career C.Worked for Boston Consulting Group after completing his Masters Degree D.Founded Kayak Corporation

Q: Typically business plan projections are made in a 36-month schedule.

Q: Bankers agree that most business failures are due to the entrepreneur's inability to obtain financing.

Q: Letters from customers, distributors, or subcontractors are examples of information that should be included in the executive summary of a business plan.

Q: Since bills have to be paid at different times of the year, cash flow projections should be presented weekly.

Q: The organizational plan section of the business plan should describe the venture's form of ownership.

Q: If a venture is not a manufacturing firm, an operations plan is not necessary.

Q: Discussing an exit strategy in the executive summary is not a good idea under any circumstances.

Q: The entrepreneur need not concentrate on environmental analysis since most of the external factors are generally uncontrollable.

Q: The executive summary section is only meant to highlight key factors and motivate the person holding the plan to read it in its entirety.

Q: An evaluation of cultural changes is irrelevant to the venture and should not be included in the business plan.

Q: The introductory page of the business plan should contain the amount of financing needed.

Q: The executive summary section of the business plan should be written first, before other sections are developed.

Q: Facebook is a good source of market information on competitors.

Q: The Internet is a useful tool to access information but is generally not a good vehicle for marketing goods and services.

Q: European online retail sales are expected to continue to grow by about 10% each year until 2018.

Q: In 2012 online retail sales increased by 15% over sales in 2011.

Q: Revenue sources such as sales and any externally available funds should be included in the budget.

Q: Pro forma financial statements should be prepared semi-monthly for the first year of the venture.

Q: To determine the figures in the budget, the entrepreneur should identify benchmarks or norms in the industry.

Q: When gathering financial information, the entrepreneur should develop a budget that includes expected sales and expense figures for the first year.

Q: Standard & Poor's and Bloomberg are good sources of industry and market data.

Q: Most entrepreneurs have little difficulty with gathering market information.

Q: In building a marketing plan, the entrepreneur should use a process designed as a pyramid, starting with narrow data and working down to broader-based information.

Q: It is recommended that an entrepreneur avoid using the Internet as a resource for finding information to write a business plan because the information found there is often incorrect and unreliable.

Q: A quick feasibility study should be conducted before preparing the business plan to uncover possible barriers to success.

Q: In preparing the business plan, entrepreneurs can provide their own perspective and should consider the needs of external sources.

Q: Venture capitalists demand high rates of return for their investment in the new venture.

Q: Investors often spend a lot of time conducting background checks.

Q: The four Cs of credit are computers, capital, compromise, and collateral.

Q: The business plan does not help an entrepreneur to obtain financing.

Q: The best way to address the concerns of all potential audiences when writing the business plan is to rely exclusively on a computer software package.

Q: The process of writing the business plan provides a self-assessment for the entrepreneur.

Q: In the business plan the entrepreneur should address the needs of the entrepreneur and the needs of the market; the investor's perspective is not important.

Q: The business plan is a private document and should not be read by employees and customers.

Q: The depth and detail in the business plan depend on the size and scope of the proposed new venture.

Q: In writing the business plan an entrepreneur should consider four perspectives: the investor, the customer, the employees and themselves.

Q: Before writing the business plan an entrepreneur should conduct an objective self-assessment of his or her abilities which includes areas such as planning and sales skills.

Q: To maintain objectivity, the business plan should not be written by the entrepreneur.

Q: The business plan addresses only short term decision making.

Q: Planning the new venture is a process that never ends.

Q: Steve Hafner founded Orbitz travel before founding Kayak a company that allows the user to view opportunities from multiple travel sites such as Orbitz, Expedia, and Priceline.