Chapter 3 1-3 entrepreneurship

A handwritten business plan is acceptable if it is neat, well organized, and inviting to read. True or False?

False

Entrepreneurs can hire experts from trade associations to help them prepare business plans. True or False?

False

Never reveal your competitors' strengths in your business plan—focus only on what they have done wrong. True or False?

False

Not all new businesses need a business plan. True or False?

False

Once your business is up and running, you will rarely use your business plan. True or False?

False

Only corporations need to include a section detailing the form of ownership in a business plan. True or False?

False

The Internet is not a trusted source of information on how to develop a business plan. True or False?

False

The executive summary appears after the body of the business plan. True or False?

False

The only person who should read a business plan is the owner and potential investors. True or False?

False

Writing a business plan is one of the easiest things you will do as an entrepreneur. True or False?

False

A business plan provides detailed financial information that shows how your business will succeed in earning a profit. True or False?

True

A good business plan should describe what products or services will be introduced over the next five years. True or False?

True

A local chamber of commerce can provide information on trends affecting local businesses, local resources, and zoning and licensing information. True or False?

True

An undefined target market can ruin a business plan. True or False?

True

Lenders require a business plan before they will consider financing a business. True or False?

True

Regardless of the business, all business plans serve the same basic purposes. True or False?

True

SCORE is cosponsored by the SBA. True or False?

True

The Small Business Administration (SBA) has at least one office in every U.S. state. True or False?

True

The backgrounds and experience of the leadership team of your company help lenders make financing decisions. True or false?

True

The financial management section of your business plan should state how much money you need to borrow and how you plan to use the money. True or False?

True

The marketing section of your business plan should describe the location of your business. True or False?

True

A business plan's title page includes all of the following except a. a brief description of the business. b. the date. c. the owner's name. d. the name of the company.

A

An executive summary a. states how much you want to borrow. b. includes supporting documents that back up statements made in the body of the report. c. should be written before the business plan is completed. d. should be no longer than one or two paragraphs.

A

In the financial management section of its business plan, a new business must include a. projected financial statements. b. copies of all rental agreements. c. current financial statements. d. all of these

A

Information about necessary equipment for your business is included in a business plan's a. operations section. b. marketing section. c. financial management section. d. concluding statement.

A

Online business resources a. can be found via search engines. b. are not as reliable as print resources. c. are not available from the SBA. d. should not be used in a business plan.

A

Small Business Development Centers (SBDCs) a. are often located at community and state colleges. b. are made up of working and retired business professionals. c. provide real-world advice and know-how for a small fee. d. all of these

A

The introduction section of a business plan contains all of the following except a. an identification of risks. b. the legal structure of the business. c. a description of the nature of the business. d. the advantages your business has over your competitors.

A

Which of the following is not an element of the financial management section of your plan? a. Distribution of profits and losses b. Financial statements c. Identification of risks d. Funding request and return on investment

A

Before they will consider financing a business, lenders require a. an organizational chart that lists all of your employees. b. a business plan. c. the history and background of your product. d. all of these

B

Financial projections in a business plan should a. not be included if you could not locate reliable financial information. b. be based on solid evidence. c. be very optimistic so that investors will be impressed. d. based on your best guess.

B

A business plan is important for all of the following reasons except a. it can help you secure financing for your business. b. it helps you communicate your ideas to others. c. it helps you decide what to sell. d. it makes you think about all aspects of your business.

C

Before lenders will loan money to a new business, a. they will want to interview all potential employees. b. the new business must have at least two years' worth of work already lined up. c. they need to be convinced that the leadership team of the business have the skills and characteristics necessary to succeed. d. all of these

C

Trade associations provide all of the following to entrepreneurs except a. education. b. valuable information. c. small loans. d. networking opportunities.

C

Which of the following is not a purpose of a business plan? a. To explain the idea behind your business b. To explain how you expect to achieve specific objectives c. To describe the backgrounds and experience of your suppliers d. To describe the backgrounds and experience of the leadership team of the business

C

A business plan explains how your product or service a. will be produced. b. will be sold. c. is either new or better than existing products or services. d. all of these

D

A business plan should a. explain who will supply your business with goods. b. show how your business will win over customers from competitors. c. explain who will run your business. d. all of these

D

Long-term sales projections are a. for ten years in the future. b. not included in a business plan. c. for two to four years after startup. d. for five years in the future.

D

SCORE is a. a for-profit association. b. an independent agency of the federal government. c. cosponsored by the federal government. d. made up of working and retired business professionals.

D

The SBA a. is an independent agency of the federal government. b. provides loans and loan guarantees to entrepreneurs and small businesses. c. has at least one office in every U.S. state. d. all of these

D

The appendix of a business plan might include a. tax returns of the business owner. b. letters of recommendation. c. a copy of required licenses. d. all of these

D

The marketing section of your plan explains a. how you plan to enter the market. b. who your prospective customers are. c. how you plan to deal with competition. d. all of these

D

Which of the following is least likely to be a helpful resource for your business plan? a. Entrepreneur magazine b. SBA publications c. books on entrepreneurship d. National Geographic

D

Working on a business plan helps you a. think through business strategies. b. identify problems that you may encounter. c. recognize limits. d. all of these

D

Your business plan must a. clearly define your market. b. never overlook the competition. c. be consistent. d. all of these

D

A brief explanation of why you are asking for a loan and what you plan to do with the money is called an executive summary. True or False?

False

A financial statement based on projected revenues and expenses is called an informal financial statement. True or False?

False

To convince investors that the idea is solid, you will need a completely new product or service or one that is less expensive than products or services that already exist. True or False?

True

To convince readers that you have come up with a practical business idea, you must include information and data from objective sources. True or False?

True