MGT 241 Ball State Quiz 5

Which test of a business plan involves proving to potential lenders and investors that the proposed business offers a high probability of repayment or an attractive rate of return on investment.

value

When creating projected financial statements for a business​ plan, an entrepreneur should not​:

"fudge the​ numbers" to make them look better than the entrepreneur actually expects them to be because most lenders and investors discount forecasted revenues and inflate forecasted expenditures when they review them.

Entrepreneurs who write business plans early on are​ _______ times as likely to actually start their businesses than those who do not.

2.5

​__________, one of the​ "five Cs of​ credit", is a synonym for cash flow.

Capacity

The most common reason banks give for rejecting small business loan applications​ is:

undercapitalization or too much debt.

​________ are negative internal factors that inhibit a​ company's ability to accomplish its​ mission, goals, and objectives.

Weaknesses

Which of the following statements about creating a business plan is false​?

Entrepreneurs who create business plans and realize that the business just​ won't work have wasted valuable time and resources.

Which of the following statements concerning making a business plan presentation is false​?

The amount of time an entrepreneur has to present his or her plan usually is at least 40 minutes to an hour.

Which of the following statements about writing a mission statement is false?

The best way to create a mission statement is for the entrepreneur to delegate the task to a team of employees.

Scott Frank is passionate about using technology to drive positive environmental and social changes. Working with Catlin Powers, he co-founded One Earth Designs, a company that sells a solar-powered cooker that also produces heat and electricity and can purify water, to organizations that serve villages in rural western China. The company's goal is to provide clean energy and to eliminate the 500,000 deaths that occur each year in rural China from indoor air pollution and carbon monoxide poisoning. What is the primary source of One Earth Designs' competitive advantage?

The values to which its founders and employees are committed.

Which of the following statements concerning a business plan preparation is false​?

When making a business plan presentation, an entrepreneur should begin with a thorough, detailed, and highly technical explanation of the technology on which the product or service is based.

Which of the "five Cs of credit" includes the owners' investment in the start-up company?

capital

Which one of the​ "five Cs of​ credit" includes assets that an entrepreneur pledges as security for repayment of a​ loan?

collateral

The value proposition that sets a small business apart from its competitors and gives it a unique position in the market that is superior to its rivals is​ its:

competitive advantage

When potential lenders and investors consider this component of the​ "five Cs of​ credit", they are evaluating factors that are beyond the​ entrepreneur's control, such as the overall condition of the​ economy, the intensity of competition the business​ faces, and other factors.

conditions

The unique set of capabilities that a company develops in key​ areas, such as superior​ quality, customer​ service, innovation,​ responsiveness, and​ others, that allow it to vault past competitors is known as the​ company's:

core competencies

The Ice Hotel in Sweden is unlike any other hotel in the world. Everything in the​ hotel, including the​ walls, the​ decorations, the​ glasses, and even the​ beds, is made out of ice. Despite​ below-freezing temperatures, thousands of guests pay up to​ 11,305 Swedish Kroner​ (about $1,350) for the adventure of staying there. The Ice Hotel is pursuing which type of competitive​ strategy?

differentiation

Which component of intellectual capital consists of the​ talents, creativity,​ skills, and abilities of a​ company's work force and shows up in the innovative​ strategies, plans, and processes the people of the organization develop and​ pursue?

human

In a business​ plan, the​ ____________ is the broadest expression of a​ company's purpose, defines the direction in which the company will​ move, and serves as a thesis statement for the entire business plan by answering the​ question, "What business am I​ in?"

mission statement

Which test of a business plan involves proving that a market for the product or service really does exist and that the company can produce the product or provide the service at a reasonable​ cost?

reality

Mike owns a shop that specializes in​ submarine-style sandwiches,​ fries, and side​ items, including salads. Across the street is a​ quick-service franchise affiliated with a national chain that sells burgers and​ fries, but its menu also includes chicken​ sandwiches, fish​ sandwiches, and onion rings. To​ Mike, the franchise represents a​ _________ competitor.

significant

Which of the following statements about a business plan presentation is false​?

Explain the business opportunity and company's business model in great detail at the outset.

Which of the following statements about writing a business plan is true​?

In addition to providing all of the relevant facts and analysis of a business​ opportunity, the best business plans also include a compelling story.

​_________ are factors that vary from one industry to another and determine a​ company's ability to compete successfully in the marketplace.

Key success factors

Which of the following elements is not recommended as part of an​ entrepreneur's elevator​ pitch?

Profit ​ - The amount of profit the company expects to earn in its first year of operation.

A​ ________ is a descriptive fact about a product or​ service; a​ _________ is what the customer gains from the product or service feature.

feature; benefit.

Shere Vincente operates a travel service that specializes in arranging trips for​ women, giving special attention to their needs and preferences from security and comfort to activities and events designed to appeal to her target customers. Vincente is pursuing which type of competitive​ strategy?

focus

The Intuit Future of Small Business Report forecasts increasingly fragmented markets and​ customers' growing demand for customized products. Small companies pursuing which of the following strategies are most likely to benefit from this​ scenario?

focus

Mike owns a shop that specializes in​ submarine-style sandwiches,​ fries, and side​ items, including salads. Less than a mile away is a submarine sandwich shop affiliated with a national chain whose product line is very similar to​ Mike's. To​ Mike, this nearby franchise represents a​ _________ competitor.

direct

Which section of the business plan equates to a written version of the​ entrepreneur's elevator​ pitch?

executive summary