1. If your research uncovers a surprising growth trend in your industry, you’ll have to revise the _______ section of your business plan. A. market profile C. operating plant B. demographics D. processes
2. Sarah and Stephanie are determined to make their business plan look as professional as possible. In order to make sure it’s organized and presented correctly, they’ve decided to A. hire a reliable attorney to look it over. B. do extra research on their target market. C. buy a software program made for the purpose. D. focus on their anticipated profit margin.
3. What is meant by the phrase “charging whatever the market will bear”? A. Your price can’t be more than customers are willing to pay. B. You have to undercut your competition. C. You should keep raising prices until business drops off. D. Customers believe that higher prices mean better quality.
4. Lindsey Birch is planning a van service to transport large or unmanageable pets to their veterinarians. In the Business Information section of her business plan, she writes that she believes her service will succeed because A. her competition is clueless. B. it will solve a problem. C. it’s a creative idea. D. cats are generally difficult creatures.
5. After you set a price for your product, you discover that your competitors are selling the same thing at a significantly lower price. One reasonable option you have is to A. use the cost plus model. B. lower your price, but add a service charge. C. raise your profit margin. D. find a way to lower your costs.
6. Charles Zimmerman owns an acre of swampy land just off the interstate. He would like to pave the surface and build a gas station and truck stop on the lot. While doing research for his business plan, he will want to pay special attention to A. oil company advertising. C. management issues. B. legal and regulatory requirements. D. Commerce Business Daily.
7. The main purpose of writing a business plan is to A. have a document to file with your incorporation papers. B. meet a state requirement for new businesses. C. inform employees of your business philosophy. D. prepare a “blueprint” for the development of your business.
8. You’ve designed the floor plan of your restaurant and an efficient traffic pattern for patrons, servers, and other staff. In your business plan, these actions are called A. industry standards. C. staff evaluations. B. performance measures. D. processes.
9. Before setting your prices, it’s wise to A. ignore your competitors’ prices. B. subtract your profit margin from your costs. C. research industry standards. D. memorize the formula for cost plus.
10. Caroline’s Jewelry and Gifts is located between a hardware store and a sports bar. While her target market is adult women of medium income, who would be a logical secondary target market? A. Men who want to buy a gift C. Grandparents B. Women with very high incomes D. The general public
11. Rachel plans to set up a beautifully furnished office for her interior decorating business. She will describe it in her business plan under the heading A. Current Trends. C. Processes. B. Inventory. D. Plant and Equipment.
12. Dan’s plant will require two shifts of skilled workers, seven days a week. As he does his research, he will pay particular attention to A. performance measures. C. his target market. B. the labor market. D. regulatory restrictions.
13. John would like to contact several trade associations, but he’s not sure where to look for information. What is the most efficient way for John to find the information he wants? A. Ask a librarian. C. Contact the SBA. B. Search the D&B Database. D. Check out hoovers.com.
14. It’s important for business owners to develop values and a philosophy of doing business. These viewpoints will be expressed in your A. Overview. C. mission statement. B. background information. D. Processes section.
15. You’ve begun a Web search for information on several suppliers you’re considering for your business.Which of the following do you expect will have the most accessible information for your research? A. A small, family-owned company C. A local business B. A publicly held company D. A sole proprietorship
16. Because of its importance in summarizing your strategy, the Introduction and Overview of your business plan should be A. written before you begin your research. C. written last. B. repeated in a cover letter. D. lengthy and detailed.
17. When XXXXX XXXXX started his excavating service, his business plan mentioned his only competitor as “a kid with an old dump truck.” Three years later, Jack was in financial trouble and the “kid” bought him out, proving the importance of A. taking your competition seriously. C. forming a corporation. B. planning for bankruptcy. D. choosing the right location.
18. Calvin and Liz have summarized several lengthy research items for their business plan. In case an investor wants more details on the research, they’ve also included A. autobiographies and résumés. B. their business goals. C. their mission statement. D. a file of price quotes and survey results.
19. Before you decide whether to use the cost plus model, it’s important to thoroughly research A. competitors’ operating processes. B. profit margins in neighboring states. C. buying behavior in similar industries. D. your industry’s going rate.
20. Lawrence Masters submitted his business plan to a potential investor, but was disappointed when he was quickly turned down. Chances are, Lawrence failed to capture the investor’s attention because of a poorly written A. business outline. C. overview. B. financial plan. D. profit projection.