Skills Test Answers - Business Planning

True or False? It is acceptable to use business jargon or pop culture references in a business plan.

False
True



The use of exhibits are intended for:

All of these
Showing your graphing skills
Visual information that is easier to interpret than words
Breaking up the writing



Which should NOT be included in an executive summary?

Dates
Name of founders
Exhibits
Current investors



The 4Ps are also known as:

Marketing trends
Market demographics
Promotions
Marketing mix



Financial Projections are done before Market Analysis and objectives are set. True or False.

False
True



How long should a typical business plan project for?

6 months
3-5 years
8-10 years
12 months



Estimating capital requirements is important for the:

Product management
Product design
Break-even analysis
Marketing



A Business Plan should not include a section about regulatory issues since this is out of the business owners hands. True or False

True
False



What does the 'T' stand for in SWOT analysis?

Target
Technology
Trends
Threat



What does Market Share mean?

The portion of a market controlled by a particular company or product.
Ownership stake in a public company
Opportunities to share in greater market profits



What is the first section in a traditional business plan?

Executive summary
Financials
Marketing plan
Management profile



True or False? You should have concise bulleted lists in a business plan.

False
True



Answering which of the following questions does NOT help in understanding a niche?

Which areas are being ignored by competitors?
How will the Board of Directors help implement capital controls?
What are potential opportunities for the business?
Which areas are competitors already well-established?



Potential creditors will often be interested in gaining collateral before lending. True or False

True
False



The Purpose of the Company Description in the Business Plan is:

(all of these)
Describe the nature of your business and list the marketplace needs that you are trying to satisfy.
List the specific consumers, organizations or businesses that your company serves or will serve.
Explain how your products and services meet these needs.



One common method for selecting prices is called Cost Pricing Strategy. This means:

Estimating price consumers wish to pay
Comparing to market norms and adding/subtracting premium based on perceived quality
Calculating the Costs of Production/Service per unit and adding a per unit profit margin



In the financial forecasting, operating profit margin should be:

Negative
Positive
Unchanged



In a competitor analysis, what should you focus on?

Barriers to entry
Prime customer motivators
All of these
Component costs



True or False? A business plan should only focus on short term objectives

False
True



True or False: Narrowing the target for potential clients helps because it concentrates sales efforts to a selective group that is most likely to be most profitable.

True
False



New funds can be put toward which of the following?

All of the above
Working capital
Acquisitions
Debt retirement



What should organizational structures include?

All of these
Management résumés
Forms of ownership
Percentage of ownership



Who are the most important readers of a business plan?

Customers
Investors
Competitors
Employees



True or False: Start-up companies are almost always succesful in the first few years.

True
False



True or False: A partnership is normally run by one entreprenuer

True
False



Legal issues like non-disclosure agreements and patents are NOT important considerations for the business.

True
False



An appendix may include:

Letters of reference
All of these
Building permits
Résumés



It is common for creditors to want historial financial statements, True or False

True
False



Ratio and Trend Analysis can help to create a better picture of profitability and growth potential. True or False

False
True



True or False? A business plan should state a value proposition.

True
False



Which of these is an example of a competitive strategy?

Pricing
Distribution
All of these
Promotion



Sales targets should be:

Both specific and measurable
Measurable
Specific
Lofty



True or Fales: An Organization Chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.

True
False



What is ROI?

Return on Investment
Ratio of Intermediaries
Rapid Operation Inspection
Rate of Installation



What is the Executive Summary of a Business Plan?

Plan of Executive Orders
Summary Provided To Bank Executives
A snapshot of your business plan as a whole and touches on your company profile and goals.



SWOT Stands for

Simple While On Target
Strengths, Weakness, Origination, Targets
(none of these)
Strengths, Weaknesses, Opportunities, Threats



True or False: The Market Analysis of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions.

True
False



When requesting funding it's important to be clear on:

Timing of funds
Time period funding is for
All of these
Type of funding (Equity vs Debt)



What is not included in variable costs?

Direct sales
Technology
Packaging
Supplies



Market Penetration Strategy is one of the Strategies underlying Cost Control. True or False

True
False



International sales can be hampered by:

Language Barriers
Cultural Differences
Regulatory Issues
All of the above



What should the prospective financial data include?

All of these
Cash flow statements
Income statements
Balance sheets



A pricing strategy where you set your prices high for quick cash and little emphasis on market penetration is called:

Price skimming
Top shelf pricing
Luxury illusion
Market saturation



Marketing Strategies can be composed of:

Funding Allocations
Growth Strategy
Poison Pill
SWOT



In a business plan the Funding Requests portion should include:

All of the above
Strategic Financial Situations
Expected Employee Retention
Competitors Product Cycle



In the Competitive Analysis It's important to include:

SWOT Analysis
Financial Statements
Potential Barriers to the Market



A good way to analyze the external environment is with a(n):

PEST Analysis
SWOT Analysis
None of these
VRIO Framework



What is the post-money valuation for a $1.5 million round of investment when the equity stake offered is 25%?

$4.5 million
$1.5 million
$6 million
$375,000



What will a VRIO framework help distinguish?

Organizational structure
Financial potential
Competitive potential
Size of the target market



The first thing to assess in your market analysis is the:

Target market
Industry outlook
Competitive analysis
Size of primary target market



The section of your business plan that is similar to an "elevator pitch" is the:

Executive Summary
Company Description
Appendix
Market Analysis



For a typical executive summary, what is the maximum length?

1 page
3 pages
2 paragraphs
Half a page