entrepreneurship chapter 3 pretest

which of the following is included in the introductory elements of a business plan? marketing plan, financial statements, owner and legal structure, executive summary

Financial statements

Identify three types of information your local Chamber of Commerce provides that is helpful to entrepreneurs

It can provide information on trends affecting local businesses, local resources, and zoning and licensing information.

Identify at least two possible harvest strategies an entrepreneur might choose

Plans for harvest could include selling the business to someone else or to another company, passing the business onto other family members, merging with another company, going public by selling shares of stock in the company to new investors, or closing the business and selling the assets such as the building and equipment.

Within the main body of the business plan, which section contains information about the ownership structure of the business? (The introduction section, the marketing section, the operations section, financial management section)

The operation section

identify the three basic components of a business plan

The three basic components of a business plan are the introductory materials, the main body, and the appendix

Identify three risks often faced by new businesses

Three risks often faced by new businesses include competitors cutting prices, costs exceeding projections, and demand for the product/service declining over time.

The __________ section of your business plan she described products and services, the market, the industry, and your location.

marketing

An existing business... need not include any financial statements in its business plan needs to include only pro forma financial statements in its business plan must include current as well as projected financial statements in its business plan should include only current financial statements in its business plan

must include current as well as projected financial statements in its business plan

A financial statement based on projected revenues and expenses is called a ____ _______ financial statement

pro forma

Which of the following is NOT one of the main purposes of a business plan? it includes sales goals for at least 10-12 years into the future, it explains the idea behind a business, it sets specific business objectives, it describes the backgrounds and experience of the business's leadership team

t includes sales goals for at least 10-12 years into the future

Which part of the business plan includes supporting documents that back up statements made in the body of the report? the statement of purpose the concluding statement the appendix the executive summary

the appendix

Information about insurance and rental or lease agreements should be included in the operations section of your business plan. (true or false)

true

The introduction section of the business plan includes a description of the business and goals, the ownership and legal structure, the skills and experience you have, and your advantages over competitors. (true or false)

true

if you intend to borrow 20% of the 56,000 you need to start a business how much of your own funds are you investing?

$44,800

joaquin Needed 20,000 start his new business. He plan to provide 40% of the start up money from his own savings. His parents offered to invest 2500 and the business. What amount would he need to borrow from the bank??

$9,500

explain the difference between a statement of purpose and an executive summary

. A statement of purpose is a brief explanation of why you are asking for a loan and what you plan to do with the money. An executive summary is a short restatement of your business plan.

you need 120,000 to start your business. You plan to invest 54,000 in the business and obtain financing from outside investors for the remainder. what will be your percentage of ownership?

45%

What kinds of sales forecast or a goal should be included in a business plan

A good business plan includes sales projections for the short term (the first year), the medium term (two to five years after startup), and the long term (five years into the future).

Why is a research processor important to writers of a business plan?

Business plans must include information and data from objective sources to show that the ideas are founded on solid evidence. Such information can come only from solid research.

The USA _____ is an independent agency of the federal government that was created to how American start, build, and grove versus

SBA

describe the function of small business development centers(SBDC)

Small Business Development Centers (SBDCs), co-sponsored by the U.S. Small Business Administration, provide technical assistance to small businesses and prospective entrepreneurs. SBDC advisors provide a variety of low-cost training and free business consultations in the areas of business plan development, financial projections, market research, manufacturing assistance, and many others.

identify the five elements of the main body of a business plan. Briefly explain what is included in each section

The five elements of the main body of a business plan are: introduction, marketing, financial management, operations, and concluding statement.The introduction section of a business plan should contain (1) a detailed description of the business and its goals; (2) the ownership of the business and the legal structure; (3) the skills and experience you bring to the business; and (4) the advantages you and your business have over your competitors. The marketing section should describe the products/services you will offer, the market, the industry, and your location. The financial section identifies risks, includes financial statements, and indicates the amount of funding you need and what investors can expect to earn on their investment. The operations section explains how the business will be managed on a day-to-day basis and discusses hiring and personnel procedures. The concluding statement summarizes the goals and objectives you have for your business and emphasizes your commitment to your business's success.

what kind of information should you provide about your businesses leadership team in your business plan? Why should you include this information?

Your business plan should describe the backgrounds and experience of your business's leadership team. Banks and investors make financing decisions based on how well they think a company can meet its objectives. If you provide good information on the background and experience of the leadership team of your company, the bank or investor will be more likely to provide funding for your business.

Which of the following is a good resource when preparing your business plan? the local chamber of commerce, professional business consultant, all of the above, trade association

all of the above

The personal financial statement of the owner would be included in the _______ to the business plan

appendix

It is against state and federal law for bankers to assist entrepreneurs in the preparation of a business plan. (true or false)

false

The content of all business plans is the same, no matter the size or type of business. (true or false)

false

The statement of purpose in a business plan should be at least two pages. (true or false)

false

You can set up a meeting with a SCORE volunteer for a low fee of just $25. (true or false)

false

You should never reveal any financial information in a business plan, in case the plan falls into the wrong hands. (true or false)

false

Your business plan should never-under any circumstances-list any risks or potential problems your new business could face. (true or false)

false