Entrepreneur Midterm

The content of all business plans is the same, no matter the size or type of business.

False

The executive summary should be written before you write the business plan.

False

The statement of purpose in a business plan should be at least two pages.

False

You can set up a meeting with a SCORE volunteer for a low fee of just $25.

False

You should never reveal any financial information in a business plan, in case the plan falls into the wrong hands.

False

Your business plan should never--under any circumstances--list any risks or potential problems your new business could face.

False

Which of the following is a resource for information on a business plan?

Internet government documents magazines

Identify the five elements of the main body of a business plan. Briefly explain what is included in each section.

Introduction-The introduction section of a business plan contains many important details about the proposed business idea. Marketing-The marketing section of your business plan should describe the products and/or services you will offer, the market, the industry and your location. Financial Management-The financial section of your business plan will help determine your financial needs Operations-explain how the business will be managed on the day-to-day basis and discuss hiring in personnel's procedures Concluding Statement-summarize the goals and objectives you have for your business

trade associations

Organizations made up of professionals in a specific industry are called _____.

Describe the function of Small Business Development Centers (SBDCs).

Provide technical assistance to small business and prospective entrepreneurs

appendix

The personal financial statement of the owner would be included in the _____ to the business plan.

Identify three types of information your local chamber of commerce provides that is helpful to entrepreneurs.

Trade Association Professional Consultants Financial Institutions

A business plan makes you think about all aspects of your business.

True

Business plans should never be handwritten.

True

Information about insurance and rental or lease agreements should be included in the operations section of your business plan.

True

Lenders and investors require a business plan before they will consider financing a business.

True

Lenders want to know where your business will be located because the location of a business is often a critical factor to its success.

True

The introduction section of the business plan includes a description of the business and goals, the ownership and legal structure, the skills and experience you have, and your advantages over competitors.

True

Trade associations exist to provide information, education, and networking opportunities to individuals in their industry.

True

Your business plan needs to convince readers that you have come up with a practical business idea.

True

Identify the three basic components of a business plan.

introductory materials, the main body, & the appendix

Which of the following is NOT one of the main purposes of a business plan?

it includes sales goals for at least 10-12 years into the future

Which of the following is included in the introductory elements of a business plan?

ownership and legal structure

Identify at least three possible harvest strategies an entrepreneur might choose

selling the business, passing the business on to family and merging with another company

What kinds of sales forecasts or goals should be included in a business plan?

short term, medium term, & long term

Which part of the business plan includes supporting documents that back up statements made in the body of the report?

the appendix

Within the main body of the business plan, which section contains information about the ownership structure of the business?

the introduction section

Which of the following is a good resource when preparing your business plan?

the local chamber of commerce professional business consultant trade association

It is against state and federal law for bankers to assist entrepreneurs in the preparation of a business plan.

False

Explain the difference between a statement of purpose and an executive summary.

-Statement of Purpose: a brief explanation of why you are asking for a loan and what you plan to do with the money -Executive Summary: a short restatement of your business plan

pro forma

A financial statement based on projected revenues and expenses is called a(n) _____ financial statement.

cover letter

A letter that introduces and explains an accompanying document or set of documents is called a(n) _____

executive summary

A(n) _____ is a short restatement of your business plan.

business plan

A(n) _____ is a written document that describes all the steps necessary for opening and operating a successful business.

Harvest Strategy

A(n) _____ strategy, or exit strategy, is the way an entrepreneur intends to extract his or her money from a business after it is operating successfully.

Why is the research process so important to writers of a business plan?

Business plans must include information and data from objective sources to show that the ideas are founded on solid evidence. Such information can come only from solid research.

Small Business Administration

The U.S. _____ is an independent agency of the federal government that was created to help Americans start, build, and grow businesses.

Service Corps of Retired Executives (SCORE)

The _____ is made up of thousands of retired executives who volunteer their time to provide entrepreneurs with real-world advice and know-how.

marketing

The _____ section of your business plan should describe your products and services, the market, the industry, and your location.

What kind of information should you provide about your business's leadership team in your business plan? Why should you include this information?

The form of ownership to be used for the business for example sole proprietorship, partnership, and corporation. lenders will look for this when they review a business plan.

Which of the following is NOT a common mistake entrepreneurs make in their business plans?

identifying the competition

A business plan

can serve as a tool for managing your business once it is up and running

Identify three risks often faced by new businesses.

competitors cutting prices, costs exceeding projections, and demand for your product or service declining over time

The title page of your business plan includes

he name of your company the date the name and title of the owner