ENT 396 CH.12

The pro forma balance sheet is used in the critical risk segment of the business plan.

False

There are only two viewpoints from which a business plan should be written, the entrepreneur's and the financial source.

False

Provides a budget

Financial Segment

Provides balance sheet and income statement

Financial Segment

An indicator of the planning pitfall of "failure to anticipate roadblocks" is

making no admission of possible flaws in the plan

Which of the following questions should an entrepreneur ask when a business plan is turned down?

"If you were in my position, how would you proceed?"

What is the significance of a harvest strategy segment in a business plan?

It is important for the entrepreneur to designate how the business will recruit new talent to the enterprise

Which one of the following is not a benefit of a business plan to the entrepreneur?

Provides a comprehensive product-launch timetable

The business plan is the entrepreneur's road map for a successful enterprise.

True

Which of the following statements may be the most important in new venture creation?

the cash flow statement

Provides industry background

Business description Segment

Describes the potential of the new venture

Business description segment

Discusses price-cutting by the competition

Critical Risk Segment

Which of the following statements is not part of the "five-minute reading" by venture capitalists?

Determine the strengths and weaknesses of the entrepreneur

Most crucial part of the plan

Executive Summary

Should be written after the business plan is completed

Executive Summary

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

False

The entrepreneur should expect to encounter a friendly and supportive audience when presenting the business plan to potential financial sources.

False

Provides strategy for an initial public offering

Harvest Strategy Segment

Describes legal structure of the venture

Management Segment

Discusses the advantages of location

Operations Segment

Explains proximity to suppliers

Operations Segment

Which of the following statements would not be an appropriate guideline for successful business plan development?

Orient the plan to the present

Competitive analysis, advertising plan, and pricing policy are all part of the

marketing segment

Which of the following is a critical factor to be considered in the management segment?

organizational structure

The comprehensive business plan should be the result of

reflections on the direction of the venture

Provides résumés of all key personnel

Management Segment

Discusses pricing strategy

Marketing Segment

Identifies target markets

Marketing Segment

Describes any prototypes developed

Milestone Schedule Segment

Sets forth timetables for completion of major phases of the venture

Milestone Schedule Segment

Shows the relationship between events and deadlines for accomplishment

Milestone Schedule Segment

A "niche" is a homogeneous group with common characteristics (i.e., all the people who have a need for a newly proposed product or service).

True

An entrepreneur is much better off preparing his or her own business plan rather than hiring someone else, even if more experienced, to prepare it.

True

The ten major segments of a business plan are below. Identify the order in which each segment will appear in the plan by placing a 1 next to the first part, a 2 next to the second part, and so on (through 10).

1. Summary 2. Business description segment 3. Marketing segment 4. Operations segment 5. Management segment 6. Financial segment 7. Critical-risks segment 8. Harvest strategy segment 9. Milestone schedule segment 10. Appendix

Contains support material such as blueprints and diagrams

Appendix

Explains costs involved in testing

Research and Development Segment

Which of the following describes advantages of the business plan for financial sources?

The plan identifies critical risks

The completed business plan provides the entrepreneur with

a tool for communicating with financial sources

A business plan iS

a written document that details the proposed venture

A business plan must illustrate the current status of the venture but not the projected results.

False

After delivering a pitch, it is not acceptable to question venture capitalists who turn down a funding opportunity.

False

The financial segment includes

the pro forma balance sheet

An important guideline in putting the plan together is

to identify the target market

Analyzes case if any sales projections are not attained

Marketing Segment

Factors that must be addressed when planning a new venture include setting realistic goals, determining milestones, making a commitment, and having flexibility.

True