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Entrepreneurship: Starting & Operating a Small Business, 4e (Mariotti)
Chapter 2 The Business Plan: Road Map to Success
1) A(n) ________ is a company's plan to generate revenue and make a profit from operations.
A) business plan
B) marketing plan
C) analysis
D) business model
Learning Object.: 2.1 Describe a feasibility analysis and choose when to create one.
AACSB Category: Analytical thinking
2) A feasibility analysis is a study to assist in making a go/no go decision based upon a close
examination of product/service, market, industry, and financial data in a sufficient degree of
detail to ensure confidence in the results.
Learning Object.: 2.1 Describe a feasibility analysis and choose when to create one.
AACSB Category: Analytical thinking
3) The Business Model Canvas has ________ core building blocks that are intended to supply
answers to critical questions.
A) 3
B) 9
C) 6
D) 8
Learning Object.: 2.2 Prepare a business model canvas.
AACSB Category: Application of knowledge
4) Bankers and other potential investors will often refuse to see an entrepreneur who does not
have a ________.
A) complete business plan
B) sales forecast
C) resumé
D) marketing plan
Learning Object.: 2.3 Identify primary business plan contents
AACSB Category: Analytical thinking
2
5) Writing a business plan can ensure that you ________.
A) achieve your expense projections
B) figure out how to make your business work
C) meet your target revenue goals
D) make a profit
Learning Object.: 2.3 Identify primary business plan contents
AACSB Category: Reflective thinking
6) A(n) ________ can be a front line of defense against a poor idea.
A) goal
B) mission
C) objective
D) business plan
Learning Object.: 2.4 Summarize the various purposes of a business plan and the audiences for
one.
AACSB Category: Reflective thinking
7) It is best to wait to write a business plan until you find lenders or investors.
Learning Object.: 2.4 Summarize the various purposes of a business plan and the audiences for
one.
AACSB Category: Reflective thinking
8) A business plan is the key to raising capital.
Learning Object.: 2.4 Summarize the various purposes of a business plan and the audiences for
one.
AACSB Category: Reflective thinking
9) Explain 3 reasons why a start-up organization would have a written business plan.
Learning Object.: 2.4 Summarize the various purposes of a business plan and the audiences for
one.
AACSB Category: Analytical thinking
3
10) Your business plan projections should be ________.
A) incredible and impossible to reach
B) optimistic and a bit of a stretch
C) practical and easy to reach
D) realistic and attainable
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
11) The ________ section of the business plan should be written last.
A) Cover Page
B) Mission, Vision, Culture
C) Executive Summary
D) Financial Statements
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
12) The Executive Summary contains the ________.
A) inspired enthusiasm for success
B) story of the business
C) funding request
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
13) Making the beliefs, values, and behavioral norms explicit and intentional builds the
________ of an organization.
A) culture
B) vision
C) mission
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
4
14) One section of the business plan that is often neglected is the ________.
A) Marketing Plan
B) Opportunity Analysis and Research
C) Executive Summary
D) Financial Projections
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
15) The ________ addresses the roles of the community, region, nation, and world in a business.
A) business analysis
B) environmental analysis
C) industry analysis
D) proof of market
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
16) Target market segments are defined by common factors such as ________.
A) psychographics
B) geography
C) demographics
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
17) A competitive analysis is an important component of ________.
A) a mission statement
B) opportunity analysis
C) a vision statement
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
5
18) The four factors that form marketing mix are ________.
A) product, price, promotion, and place
B) product, place, politics, and price
C) product, packaging, promotion, and price
D) product, price, promotion, and public opinion
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
19) Price should reflect the organization's ________.
A) policy
B) vision
C) strategy
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
20) Advertising is ________ promotion through media outlets.
A) paid
B) free
C) discounted
D) personal
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
21) Telemarketing is a form of ________.
A) advertising
B) publicity
C) direct marketing
D) None of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
6
22) Which of the following is not needed in all business management teams?
A) operations
B) outside directors
C) marketing
D) accounting
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
23) Resumes and position descriptions should be included in business plans for ________.
A) all employees
B) key managers
C) Both of these.
D) Neither of these.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
24) A factor to consider when selecting a physical location is ________.
A) nearby university
B) wage rates
C) work force availability
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
25) Cash flow ________ be negative before debt and equity infusions and ________ be negative
after them.
A) can, cannot
B) cannot, cannot
C) cannot, can
D) can, can
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
7
26) Income statement projections realistically ________ in the first few months of operations.
A) show losses
B) show profits
C) break even
D) show marginal profits
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
27) Ratio analysis can help business owners ________.
A) secure funding
B) manage operations
C) understand their performance relative to peers
D) All of the above.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
28) An IPO is a(n) ________ exit strategy for entrepreneurial ventures.
A) extinct
B) rare
C) common
D) alternative for a buyout plan
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
29) If a company does not have ________, it will fail.
A) property
B) cash
C) advertising
D) advanced technology
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
8
30) What a business owns is called ________.
A) liabilities
B) assets
C) net worth
D) owner's equity
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Reflective thinking
31) The marketing plan is based on the marketing mix of product, price, place, and packaging.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
32) Discuss the significance of the management section of the business plan and what it should
contain.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
33) Describe mission, vision and culture.
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
9
34) What are the types of financial information to include in a business plan and why are they
important?
Learning Object.: 2.5 Differentiate the components of a business plan.
AACSB Category: Analytical thinking
35) Which of the following is not a best practice?
A) Write for your audience.
B) Use technical language and jargon.
C) Show that you are emotionally, intellectually and financially invested in the business.
D) Explain why the business will be successful.
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Analytical thinking
36) A(n) ________ is a 30-second to a 2-minute summary of your business.
A) story
B) advertisement
C) elevator pitch
D) executive summary
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Analytical thinking
37) When you make an in-person presentation to prospective investors you should ________.
A) be prompt
B) establish rapport with the audience
C) use clear visual aids
D) All of the above.
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Analytical thinking
10
38) Business plan and venture competitions for students are held worldwide. Many of them
include ________.
A) oral presentations
B) prizes
C) travel
D) All of the above.
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Analytical thinking
39) In a business plan, it is important to demonstrate that you have "skin in the game."
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Reflective thinking
40) What is the importance of having a professional, polished business plan?
Learning Object.: 2.6 Recognize and demonstrate proper development and formatting of a
business plan.
AACSB Category: Analytical thinking
