EEE 2023 - Chapter 6

A __________ is a written narrative, typically between 25 and 35 pages long, that describes what a new business intends to accomplish and how it intends to accomplish it.

business plan

Which of the following is NOT a redflag in a business plan? a) a poorly cited plan b) overly aggressive financials c) a lack of sloppiness in any area d) defining the market size too broadly e) founders with none of their own money at risk

c) a lack of sloppiness in any area

Investors and potential business partners are _______.

external stakeholders

Writing a Business Plan: Internal Reason -

forces the founders to systematically think through every aspect of its new venture

A(n) ______ business plan is intended primarily for an internal audience.

operational

A business plan is a ___________ document.

selling

Pablo's shopping app start-up is in the very early stage of its development. It requires funding to analyze further his business opportunity. A(n) _______ business plan works best for Pablo.

summary

A clearly written business plan is important for both the management team ______.

the rank-and-file employees

Defining the market size too broadly is ___________ in a business plan.

an example of a red flag

Of the primary reasons to write a business plan, the fact that writing it forces the founding team to systematically think through aspects of its new venture is _________ reason.

an internal

A 2015 Wells Fargo/Gallup Small business Index Survey found that only ________ percent of business owners have a formal business plan.

33

Operational Business Plan

40-100 pages; tool for creating a blueprint for new ventures operations and guidance for operational managers

____________ refers to the process investors go through after they tentatively commit to an investment

due diligence

Content of the Business Plan

- gives clear and concise information on all the important aspects of the proposed new venture

Why right a business plan?

- internal reason - external reason

Structure of the Business Plan

- must be conventional and allow others to easily find critical information - protect a sense of anticipation and excitement about the possibility surrounding a new venture - best accomplished by those creating the business

Main Audiences a Business Plan is aimed at:

1) A Firm's Employees 2) Investors and Other External Stakeholders

3 Types of Business Plans:

1) Summary Business Plan 2) Full Business Plan 3) Operational Business Plan

Summary Business Plan

10-15 pages; best for companies that are very early in developing

A business plan should be close to _______ pages in length.

25

The typical length of a business plan is ________ pages.

25-33

For most business plans, ________ pages for sufficient.

25-35

Full Business Plan

25-35 pages; new ventures at the stage of needing funding or financing

Writing a Business Plan: External Reason -

communicates the merits of a new venture to outsiders (investors and bankers)

Which of the following is NOT a primary audience for a firm's business plan? a) potential business partners b) rank-and-file employees c) key employees d) customers e) investors

d) customers