Chapter 3 Business Management

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A business plan is necessary only if you need to secure financing for your business

false

A financial statement based on projected revenues is called an informal financial state

false

A handwritten business plan is acceptable if it is neat, well organized and inviting to read

false

All business plans have different purposes, so they do not have the same basic elements

false

How a business plans to keep customers is NOT part of a business plan

false

The first 3 pages of a business plan should be the statement of purpose, executive summary and the table of contents

false

The form of ownership section is included only if you plan to organize as a partnership or corporation

false

The main body of your plan may be long because it should include all available info and supporting documents

false

The marketing section of your business plan should describe the location of your business

false

You should identify risks and explain how you plan to deal with them in:

financial section

All business plans:

have 7 basic elements have the same purpose are not alike

Who is a business plan written for?

They are written for potential investors, suppliers and the owner itself so they can use it as a guide while running the business

Which of the following is NOT a purpose of a business plan?

To describe the background/experience of your suppliers

Long-term sales projections are for:

5 years in the future

Your business plan should have a cover sheet that includes:

A brief description of the business

The introductory elements of a business plan include all the following except:

An introduction

Why is an executive summary important to a business plan?

Because it captures the interest of the reader and summarizes your plan to make it more clear for readers. It can capture the interest because if you have this long business plan, investors may not be able to understand what you are trying to achieve and with the executive summary you may be able to do so

Why do you think it would be helpful to speak with members of SCORE before you write your business plan?

Because people in SCORE are retired business owners so they have past experience that might give you knowledge on how to run the business. They may also be able to address any risk that might come up and help you problem solve each risk.

The history and background section of a business plan:

Describes how you came up with the idea for your business

A business plan is important for all of the following reasons except:

Helps decide what product to sell

The marketing section of your business plan explains:

How you plan to enter the market Who your prospective customers are Your advantages over the competition

One purpose of a business plan is to:

Show how your business will keep customers

Why should you include management and staffing issues in your business plan?

Show that the people who will be working for you are experienced, mature and have a sense on how to run a business. Also, it is important for investors so they can see who is working/running the business.

Why is it so important to identify risk your business may face in your business plan?

So you know how to handle the problem when it occurs. It also shows investors that you clearly thought out your business plan.

A business that needs a license should include a legal issues section in its business plan

true

Copies of resumes help show that owners are qualified

true

Lenders require a business plan before they will consider financing a business

true

The backgrounds/experience of people who will run the business help investors make financial decisions

true

The cover letter briefly describes your business, it's potential for success and the amount of capital you need

true

The executive summary is a short restatement of your plan and should be no longer than 1-2 pages

true


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