Business Plans Ch.6 Exam Questions Skinner

CHAPTER 6: BUSINESS PLANS

TEST BANK

A) MULTIPLE CHOICE

Select the "most correct" option:

1. Written business plans are typically required by

a. formal business lenders.

b. investors.

c. both of the above.

d. none of the above.

2. Writing a business plan motivates the entrepreneur by:

a. acting as a checklist.

b. producing something tangible.

c. communicating the plan

d. The business plan does not function as a motivator.

3. Compared to the past, business plans today tend to be:

a. more concise.

b. longer.

c. a minimum of 100 pages.

d. less than 10 pages.

4. The model for a basic start-up business plan used by the textbook has:

a. 3 sections.

b. 5 sections.

c. 10 sections.

d. 18 sections.

5. Professional business plans should be written in:

a. the first person.

b. the second person.

c. the third person.

d. any of the above.

6. “Looping back to change previous decisions” describes the business plan as:

a. a process.

b. a consulting tool.

c. a teaching tool.

d. a research tool.

7. The section of the business plan most likely to require revision of previous sections is:

a. Finances.

b. Marketing.

c. Operations.

d. Finances.

8. For the consultant, the business plan outline represents:

a. a logical series of decisions for planning.

b. a logical series of questions to ask a business owner.

c. a logical series of steps for start-up.

d. none of the above.

9. Credit policies and cash flow are more likely to be emphasized in the business plan for:

a. a service firm.

b. a retailer.

c. a wholesaler.

d. Emphasis will be equal for all three.

10. The departmental business plan will be unlikely to include:

a. goals and objectives.

b. organization and management.

c. operations.

d. financial statements.

B) TRUE OR FALSE

1. T F A common error in writing business plans is vague bragging about service

quality.

2. T F If using an online proofreading service for your business plan, it is better to use

one based in Canada.

3. T F The maximum reasonable length for a business plan is 75 pages.

4. T F The process of setting up a business is usually a simple series of linear steps.

5. T F For established firms, the business plan is a process of renewal.

6. T F The best renewal strategy for a business is to add new products and services while

improving efficiency at the same time.

7. T F Arranging the finances is usually the last step in the business planning process.

8. T F In the business planning process, “organinzing the operations” usually comes

before “creating a marketing strategy.”

9. T F Knowing the structure of a business plan provides students with a system of

classifying information.

10. T F The business plan for a non-profit organization includes an analysis of the

competition.

C) FILL IN THE BLANKS

1. An outline or pattern for a business plan is called a business plan

.

2. The basic categories for business “type” are , ,

, and .

3. In a business context, the letters SBU stand for

.

4. The attempt to make departments of large firms function as if they were small businesses

is referred to as .

5. The use of business practices to achieve goals that are of public benefit is known as

,

6. ________________________ outlines the strengths, weaknesses, opportunities and threats related to a business environment.

7. ______________________is an approach to running a large organization that encourages managing each department as if it were an independent innovative, risk-taking entity.

D) SHORT ANSWER

1. Briefly explain the difference between "business plan templates” and “interactive plan

writers. (1/3 page max)

2. Explain how the maintenance department of a large business would describe its customers

and its competition in a departmental business plan. (1/2 page max)

3. Compare four varieties of business plans

E) ESSAY

1. Name the five major sections for a basic start-up business plan and briefly discuss what each covers. (1 page max)

2. Explain five ways in which non-profit organizations are similar to businesses. How are they different? Why do non-profits need business plans? (1 page max)