34.
The process of planning is very convenient and does not consume much time.
35.
Strategic planning consists of two parts: a firm’s mission and objectives and its strategies.
36.
Selecting the type of business to enter is an example of operational planning.
37.
SWOT analysis is a useful tool to aid the process of strategic planning and can be
organized into the form of a matrix.
38.
In a SWOT analysis, strengths and weaknesses of a company are part of its external
environment.
39.
Legal objectives are included in the operational planning process during the setting up of
a business plan.
40.
The mission statement of a business corporation should be revised frequently.
41.
Setting up the human resource management (HRM) objectives of a company is an activity
that falls under strategic planning.
42.
Objectives are the goals that give shorter-term direction to a business and serve as
benchmarks for measuring performance.
43.
External environmental elements do not affect the operation of a small business.
44.
Internal environmental factors of a business include clients, technology, and competition.
45.
A competitive edge is a particular characteristic that makes a firm more attractive to
customers than are its rivals.
46.
Strategies are general statements that serve as short-term guides to managerial decision
making.
47.
In the context of a business setting, operational planning involves developing strategies to
meet competition.
48.
Methods and procedures provide employees with standing instructions for performing
their jobs.
49.
The more amount of time a small business owner devotes to the business, the more
important it is to have capable employees.
50.
Simple startup businesses do not need records and information systems.
51.
Income from sales is termed revenue.
52.
Net profit is defined as the total amount of revenue generated.
53.
Variable expenses remain stagnant in relation to volume of output.
54.
Expenses such as depreciation on buildings are known as variable expenses.
55.
A business plan serves as a tool for attracting people and money.
56.
In developing a business plan, one should consider the firm’s origin and background to
attract investors.
57.
If a business is to be organized and run by more than one person, preparing the business
plan should be an individual effort.
6-33
58.
The executive summary of a business plan outlines the entire plan, its major objectives,
how these objectives will be accomplished, and the expected results.
59.
One important purpose of a business plan is to indicate the expected financial results from
operations.
60.
A business plan should be delivered from the entrepreneur’s perspective and not the
investor’s perspective.
Essay Questions
61.
Why is planning so important for a small business?
62.
State three examples of strategic planning for a small business owner.
63.
What is a SWOT analysis, and how is it used?
64.
Explain the purpose and the use of a business’s mission statement.
65.
Why are setting objectives important to a small business? Give an example.
66.
What are the two important considerations in creating the mission and defining objectives
for a small business? Explain how each gives a competitive edge to a small business.
67.
How can strategies help a small business reach its mission?
68.
What are the three types of planning that can help a small business owner improve his or
her chances for success?
69.
Describe operational planning.
70.
Explain the purpose of a business plan, and enlist the key components of a written
business plan.
A business plan is a formal plan prepared to serve as a tool for attracting the other
components of the business formation package, including people and money. The
business plan provides a detailed blueprint for the activities needed to finance the
business, develop the product, market it, and otherwise manage the new business.
Because the business plan is such an important document, it should be arranged logically
and presented clearly to save the reader time and effort as well to ensure understanding.
Any plan should include at least the following elements: