Entrprnur chapter 7

Lenders are considered the potential suppliers of business capital for a new venture. According to lenders, what are the requirements for a business plan? (Check all that apply).

It should indicate the amount of personal equity invested by an entrepreneur. It should mirror an entrepreneur's credit history. It should show the collateral or tangible assets being secured for a loan.

In an organizational context, the final part of a business plan's industry analysis section should place emphasis on _____.

the specific market

True or false: All businesses should create an operations plan as part of their business plan.

true

True or false: Potential investors regard a marketing plan described in a business plan as critical to the success of a new venture.

true

True or false: The significance of a feasibility study of the manufacturing operations by an entrepreneur of a new venture depends on the nature of the business.

true

Which of the following is an example of a poorly prepared business plan?

A business plan that lacks an establishment of customer needs for the proposed product or service

A written document prepared by an entrepreneur that describes all the relevant external and internal elements involved in starting a new venture is known as a(n)

Blank 1: business Blank 2: plan

Arrange the contents that should be included in the introductory page of a business plan for a new venture starting from the information that should appear at the beginning to the information that should appear at the end.

C N P A S

Match the environmental factors entrepreneurs analyze as part of a business plan for a new venture (in the left column) with their descriptions (in the right column).

Economy matches Choice, Trends in the GNP, unemployment by geographic area, disposable income, and so on Trends in the GNP, unemployment by geographic area, disposable income, and so on Culture matches Choice, Shifts in the population by demographics and shifts in attitudes Shifts in the population by demographics and shifts in attitudes Technology matches Choice, Powerful technological developments determined from resources committed by major industries or the U.S. government Powerful technological developments determined from resources committed by major industries or the U.S. government Legislation matches Choice, Any future restrictions that may affect the product or service, channel of distribution, price, or promotion strategy Any future restrictions that may affect the product or service, channel of distribution, price, or promotion strategy

Identify the true statements about the introductory page of a business plan for a new venture. (Check all that apply.)

It establishes the basic concept that an entrepreneur is trying to develop. It gives a brief summary of the business plan's contents.

Which of the following sections of a business plan for a new venture provides complete overview of its product(s), service(s), and operations?

The description of the venture

An entrepreneur should be prepared for sudden changes or disasters that can affect the implementation of a business plan. In this context, identify the issues that need to be addressed by an entrepreneur to have a contingency plan. (Check all that apply.)

The entrepreneur should ensure that the contingency plan includes details of who should be contacted and how in event of a disaster. The entrepreneur should make a list of any factors that can impact his or her venture.

Assessment of external uncontrollable variables that may impact a business plan of a new venture is known as a(n)

ea

True or false: In an organizational plan as part of a business plan for a new venture, it is important to detail the shares of stock authorized and share options if the venture is a partnership.

false

A(n) , which is part of a business plan for a new venture, details how the product(s) will be manufactured.

p

Arrange the steps that should be taken by an entrepreneur when creating the section named assessment of risk in a business plan for a new venture in the correct order of occurrence.

r h w

An entrepreneur should be prepared for sudden changes or disasters that can affect the implementation of a business plan. In this context, which of the following are true about contingency plans? (Check all that apply.)

A contingency plan should be implemented immediately if there is a crisis. A contingency plan should be a step-by-step plan.

Identify the reasons why a business plan for a new venture fails. (Check all that apply.)

An entrepreneur lacks sense of potential threats or weaknesses to the business. An entrepreneur sets unreasonable goals.

What are the perspectives an entrepreneur should consider in preparing a business plan for a new venture? (Check all that apply.)

An investor's perspective The marketing perspective His or her own perspective

In a business plan for a new venture, a section projects key financial data that determine economic feasibility and necessary financial investment commitment. This section is known as the

Blank 1: financial Blank 2: plan

As part of a business plan for a new venture, an entrepreneur reviews industry trends and competitive strategies. This is termed a(n)

Blank 1: industry Blank 2: analysis

A(n) , which is part of a business plan for a new venture, describes market conditions and strategy related to how the product(s) and service(s) will be distributed, priced, and promoted.

Blank 1: marketing Blank 2: plan

What do lenders, as the potential suppliers of business capital for a new venture, typically focus on? (Check all that apply.)

Cash flow Character Collateral Equity contribution

Fatima, an entrepreneur, plans to start a retail store in her neighborhood. She plans to use an upside-down pyramid approach to gathering market information. Arrange the groups of trends that she needs to analyze as part of using this approach in the order in which they should be analyzed. (Place the group of trends that needs to be analyzed first at the top.)

GE NR LE LR LC

Which of the following make a business plan for a new venture difficult to control and implement? (Check all that apply.)

Goals and objectives that are too general Goals and objectives that are not feasible

Match the situations studied in a production plan as part of a business plan for a new venture (in the left column) with their descriptions (in the right column).

If some or all of the manufacturing process is to be subcontracted matches Choice, The plan should mention the subcontractor(s), including location, reasons for selection, costs, and any contracts that have been completed. The plan should mention the subcontractor(s), including location, reasons for selection, costs, and any contracts that have been completed. If the manufacturing is to be carried out in whole or in part by an entrepreneur matches Choice, The plan should explain the physical plant layout; the machinery and equipment needed to perform the manufacturing operations; raw materials and suppliers' names, addresses, and terms; costs of manufacturing; and any future capital equipment needs. The plan should explain the physical plant layout; the machinery and equipment needed to perform the manufacturing operations; raw materials and suppliers' names, addresses, and terms; costs of manufacturing; and any future capital equipment needs.

Identify the areas in which an entrepreneur requires information when conducting a feasibility study of the manufacturing operations of a new venture. (Check all that apply.)

Labor skills Location Raw materials Equipment

Which of the following are examples of information that should be included in the appendix of a business plan for a new venture? (Check all that apply.)

Secondary research data Letters from distributors

Which of the following is part of a business plan for a new venture that describes a venture's form of ownership—proprietorship, partnership, or corporation?

The organizational plan

Which of the following should be primarily covered in the final part of a business plan's industry analysis section? (Check all that apply.)

Who the customers are The condition of the business environment in the specific market

A true statement about a business plan for a new venture is that it is usually _____.

a combination of functional plans like marketing, finance, manufacturing, and human resources

Before preparing the financial section of a business plan for a new venture, an entrepreneur should _____.

create a budget including lists of possible expenditures in the first year and revenue sources

Liam plans to open a bakery in his town. He decides to use an upside-down pyramid approach to gathering market information. Arrange the steps that should be taken by Liam when using this approach in the correct order of occurrence. (Place the first step at the top).

g t e s

Before conducting a quick feasibility study of the business concept of a new venture, an entrepreneur should _____.

precisely state the goals and objectives of the business

The section of a business plan for a new venture named description of the venture should _____.

start with the mission statement or company mission

Match the sections included in the section of a business plan for a new venture named the financial plan (in the left column) with their descriptions (in the right column).

Summary of the forecasted sales and the appropriate expenses for at least the first three years matches Choice, Includes estimated sales, cost of goods sold, and the general and administrative expenses Includes estimated sales, cost of goods sold, and the general and administrative expenses Cash flow figures for at least three years matches Choice, Includes the demands on money on a monthly basis, especially in the first year Includes the demands on money on a monthly basis, especially in the first year Projected balance sheet matches Choice, Summarizes the assets of a business, its liabilities (what is owed), the investment of an entrepreneur and any partners, and retained earnings (or cumulative losses) Summarizes the assets of a business, its liabilities (what is owed), the investment of an entrepreneur and any partners, and retained earnings (or cumulative losses)

Which of the following sections of a business plan for a new venture contains backup material that is not necessary in the text of the document?

The appendix

Which of the following sections of a business plan for a new venture identifies potential hazards and alternative strategies to meet business plan goals and objectives?

The assessment of risk

Which of the following sections of a business plan for a new venture goes beyond the manufacturing process (when the venture involves manufacturing) and describes the flow of goods and services from production to the customer?

The operations plan

To prepare the actual budget as part of a business plan for a new venture, an entrepreneur should _____.

recognize benchmarks in the industry that can be used to form the final pro forma statements in the financial plan