Entrepreneurship and Small Business Management, 2e (Mariotti)
Chapter 4 The Business Plan: Road Map to Success
1) A ________ is a company’s plan to generate revenue and make a profit from operations.
A) Business plan
B) Feasibility plan
C) Business model
D) All of the above
E) None of the above
Learning Obj.: LO 2
AACSB: Analytical thinking
2) The four factors that form competitive advantage are ________.
A) Product, price, promotion, and place
B) Product, packaging, promotion, and price
C) Product, place, politics, and price
D) Product, place, politics, and persistence
E) Product, place, people, and price
Learning Obj.: LO 5
AACSB: Analytical thinking
3) Making the beliefs, values, and behavioral norms explicit and intentional builds the ________
of an organization.
A) Culture
B) Mission
C) Vision
D) Goals
E) All of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
4) One section of the business plan that is often neglected is the ________.
A) Opportunity Analysis and Research
B) Management and Operations
C) Financial Projections
D) Marketing Plan
E) Executive Summary
Learning Obj.: LO 5
AACSB: Analytical thinking
1
5) Resumes and position descriptions should be included in business plans for ________.
A) Key managers
B) All employees
C) Customers
D) Stockholders
E) Both A and B
Learning Obj.: LO 5
AACSB: Analytical thinking
6) A factor to consider when selecting a physical location is ________.
A) Work force availability
B) Wage rates
C) Nearby university
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
7) When you make an in-person presentation to prospective investors you should ________.
A) Engage the listeners’ interest
B) Introduce yourself
C) Use clear visual aids
D) All of the above
E) None of the above
Learning Obj.: LO 6
AACSB: Analytical thinking
8) A(n) ________ is a document that thoroughly explains a business idea and how it will be
carried out.
A) Business plan
B) Analysis
C) Resume
D) Marketing plan
E) Operations plan
Learning Obj.: LO 3
AACSB: Analytical thinking
2
9) Income statement projections realistically ________ in the first few months of operations.
A) Break even
B) Show medium profits
C) Show large profits
D) Show small profits
E) Show losses
Learning Obj.: LO 5
AACSB: Analytical thinking
10) Bankers and other potential investors will often refuse to see an entrepreneur who does not
have a ________.
A) Sales forecast
B) Marketing plan
C) Resume
D) Complete business plan
E) Penny
Learning Obj.: LO 4
AACSB: Analytical thinking
11) The ________ addresses the roles of the community, region, nation, and world in a business.
A) Environmental analysis
B) Business analysis
C) Industry analysis
D) Proof of market
E) Financial analysis
Learning Obj.: LO 5
AACSB: Analytical thinking
12) Indicating that you are assuming personal risk involves showing that ________.
A) You are emotionally invested in the business.
B) You are intellectually invested in the business.
C) You are financially invested in the business.
D) All of the above
E) None of the above
Learning Obj.: LO 6
AACSB: Analytical thinking
3
13) Telemarketing is a form of ________.
A) Advertising
B) Publicity
C) Direct marketing
D) Public relations
E) None of the above
Learning Obj.: LO 5
AACSB: Application of knowledge
14) Advertising is ________ promotion through media outlets.
A) Paid
B) Discounted
C) Free
D) Newsworthy
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
15) If a company does not have ________ it will fail.
A) Cash
B) A business plan
C) Advisors
D) Advertising
E) Property
Learning Obj.: LO 5
AACSB: Analytical thinking
16) Ratio analysis can help business owners ________.
A) Secure funding
B) Manage operations
C) Understand their performance relative to peers
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
4
17) The ________ section of the business plan should be written last.
A) Executive Summary
B) Mission, Vision, Culture
C) Cover Page
D) Financial Statements
E) Company Description
Learning Obj.: LO 5
AACSB: Analytical thinking
18) Cash flow ________ be negative before debt and equity infusions and ________ be negative
after them.
A) Cannot, can
B) Cannot, cannot
C) Can, cannot
D) Can, can
E) Must, must
Learning Obj.: LO 5
AACSB: Analytical thinking
19) A business plan can help a company ________.
A) Operate more effectively
B) Raise capital
C) Define its core mission
D) All of the above
E) None of the above
Learning Obj.: LO 4
AACSB: Analytical thinking
20) Writing a business plan can ensure that you ________.
A) Achieve your expense projection
B) Make a profit
C) Figure out how to make your business work
D) Meet your target revenue goals
E) Have no chance of failure
Learning Obj.: LO 4
AACSB: Analytical thinking
5
21) The Executive Summary contains the ________.
A) Management strengths
B) Funding request
C) Story of the business
D) Competition details
E) All of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
22) Business plan and venture competitions for students are held worldwide. Virtually all of them
include ________.
A) Prizes
B) Teams
C) Oral presentations
D) Business plans
E) All of the above
Learning Obj.: LO 6
AACSB: Application of knowledge
23) Target market segments are defined by common factors such as ________.
A) Psychographics
B) Demographics
C) Geography
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
24) Price should reflect the organization’s ________.
A) Strategy
B) Policy
C) Vision
D) All of the above
E) None of the above
Learning Obj.: LO 5
AACSB: Analytical thinking
6