Ch. 12

Loan proposal

Sometimes a business plan is referred to as a(n) Select one: a. novelization. b. loan proposal. c. encyclopedia. d. receivables exchange.

The name of the company

Surprisingly, entrepreneurs frequently forget to include _____ in the business plan. Select one: a. a customer endorsement b. the return address or phone number c. the name of the company d. the month and year the plan is issued

The plan identifies critical risk

Which of the following is an advantage of the business plan for financial sources? Select one: a. The plan identifies critical risks. b. The plan helps assess the entrepreneur's market niche. c. The plan helps investors learn about the future fixed and variable costs. d. The plan identifies sources of capital.

Inpressing with excessive detail

The text discusses all of the following important guidelines to follow when putting the plan together except Select one: a. avoiding exaggeration. b. impressing with excessive detail. c. highlighting critical risks. d. keeping the plan respectably short

False

Planning is not essential to the success of an undertaking. Select one: True False

may help an entrepreneur avoid a project that is "doomed" from the start.

A business plan Select one: a. provides a foolproof "blueprint" for a small business. b. may help an entrepreneur avoid a project that is "doomed" from the start. c. is a loan application. d. forces the venture capitalist to prepare an effective strategy to use in case of trouble.

True

A business plan is the written document that details the proposed venture. Select one: True False

False

A business plan must illustrate the current status of the venture, not the projected results. Select one: True False

True

A common mistake in business planning is using acronyms and technical jargon without clearly explaining them early in the business plan. Select one: True False

the venture's ability to service debt or provide an adequate return on equity

A financial source that reads a business plan derives which of the following beneficial information? Select one: a. favorable lease terms b. opinions about proposed business regulations c. the venture's ability to service debt or provide an adequate return on equity d. probability of future employment with the business

False

After delivering a pitch, it is not acceptable to question venture capitalists who turn down a funding opportunity. Select one: True False

Priorities

According to the textbook author, a pitfall to avoid in planning is lack of Select one: a. future vision. b. priorities. c. illustrations. d. profit orientation.

spiral bound

It is recommended that the final copy of the business plan be Select one: a. stapled. b. paper clipped. c. professionally typeset and bound. d. spiral bound.

False

The easiest way to avoid the pitfall of no commitment or dedication is to designate that the venture is a hobby or a whim. Select one: True False

False

The pro forma balance sheet is used in the critical risk segment of the business plan. Select one: True False

No interest in researching the idea

An indicator of the planning pitfall of "no commitment or dedication" is Select one: a. no experience in the business. b. no interest in researching the idea. c. not understanding the industry. d. no recognition of future problems.

Lack of timetable to accomplish things

An indicator of the planning pitfall of "no realistic goals" is Select one: a. missed appointments. b. lack of desire to invest personal money. c. lack of timetable to accomplish things. d. excessive procrastination.

True

Because of the competition for funding, an entrepreneur's business plan needs to capture the reader's interest right away by stating the uniqueness of the venture. Select one: True False

Marketing

Competitive analysis, advertising plan, and pricing policy are all part of the _____ segment. Select one: a. milestone schedule b. marketing c. research, design, and development d. financial plan

About 25 pages

The recommended length of a business plan is Select one: a. about 100 pages. b. about 25 pages. c. no more than 150 pages. d. 10 pages, at the maximum

Thorough reading of each section

Which of the following is not one of the steps in reading a business plan? Select one: a. brief review of the history of the company b. thorough reading of each section c. reading of the latest balance sheet d. establishment of the unique feature in this venture

Management team vitae

Which of the following would be appropriate to include in an appendix to a business plan? Select one: a. capital funding requirements b. niche market analysis Incorrect c. projected first-year sales d. management team vitae

True

The executive summary gives a brief overview of what is to follow, helps put all of the information into perspective, and should be no longer than three pages. Select one: True False

Memorize the presentation

Which of the following is something an entrepreneur should not do when preparing for the oral presentation of a business plan? Select one: a. Organize the presentation. b. Develop an outline of the plan. c. Memorize the presentation. d. Practice the presentation.

Entrepreneur

The most common viewpoint in business plans is viewpoint of the Select one: a. competitor. b. financial source. c. entrepreneur. d. marketplace.

True

A market niche is a homogeneous group with common characteristics (i.e., all the people who have a need for a newly proposed product or service). Select one: True False

. plan for a liquidity event as an exit strategy.

It is important for the entrepreneur to have a harvest strategy segment in a business plan in order to Select one: a. know how to buy up troubled companies. b. designate how the business will recruit new talent to the enterprise. c. indicate how the business will increase in value. d. plan for a liquidity event as an exit strategy.

True

Lack of any time frame to accomplish things is an indicator of the pitfall known as no realistic goals. Select one: True False

False

Question text The entrepreneur's professionalism and how well he or she handles the venture capitalist is far more important than being well organized and prepared. Select one: True False

practice the complete presentation by moving through each slide.

The day before the presentation, the entrepreneur should Select one: a. have snacks delivered to attendees. b. practice the complete presentation by moving through each slide. c. read the paper to relieve nervousness. d. arrange to have breakfast and coffee catered in.