Chapter 9: Preparing a Business Plan and Financial Request

1. Which of the following items does not need to be included in a business plan?
2. An assessment of the current market opportunity
3. A statement of business strategy
4. Historical information on financial performance
5. Detailed information on failed ventures

1. When an entrepreneur is seeking funding, it is first necessary for him to complete several tasks. Which of the following is not one?
2. Making a critical self-evaluation of the idea
3. Formulate a business plan
4. Deny any risks that may exist
5. Evaluate the business team

1. Which of the following is not a necessary section of a business plan?
2. Manufacturing Plan
3. Detailed information on all aspects of product design
4. Market Opportunity Analysis
5. Financial Plan

1. Which scenario would a venture capitalist prefer?
2. A grade C manager with a grade A idea
3. A grade A manager with a grade B idea
4. A grade B manager with a grade A idea
5. A grade A manager with a grade C idea

1. Which are the various areas that should be contained in a Market Opportunity Analysis?
2. Market Profile, Channel Profile, Key Competitor Profile, Historical Profile
3. Channel Profile, Customer Profile, Historical Profile, Market Profile
4. Market Profile, Customer Profile, Profile, Key Competitor Profile, Historical Profile
5. Channel Profile, Key Competitor Profile, Customer Profile, Market Profile

1. The Product Line portion of the Business Plan should not answer which of the following questions?
2. What is the product?
3. In what way is this product unique?
4. Where was the product designed?
5. Is there a natural extension of this product?

1. When presenting a business plan, which of the following is essential to success?
2. Avoiding answering questions and not being vague
3. Being rigid in pricing
4. Not hiding significant problems
5. Pressing for an immediate decision

1. When determining the pricing of an item, it is important to consider many different factors. Which of the following is not one of them?
2. Consider the business risk associated with the business to determine the rate of return that might be expected by the venture capitalist
3. Multiply the earnings estimate by the P/E ratio
4. Estimate the P/E ratio from your personal opinion
5. Estimate the earnings at some time in the future

1. The best thought out product can fail if it is not distributed effectively. Which of the following distribution ideas is not critical to the success of the venture?
2. What geographic markets do you want to enter?
3. How many salespeople do you need to assign to each segment?
4. What mode of transportation will be most effective?
5. How will you pay the sales force?

1. Which of the following is not a common reason cited by venture capitalists for rejecting investment proposals?
2. Lack of confidence in management
3. Lack of a well defined business plan
4. Familiarity with the products, processes or markets
5. Unsatisfactory risk/reward ratios

1. More than anything else, a business plan is a(n):
2. Financial document
3. Manufacturing document
4. Selling document
5. Accounting document

1. Any person investing in a new business venture is a:
2. Capital Venturist
3. Virtual capitalist
4. Venture capitalist
5. Equity bondholder

13. A(n) ___________ is an overall evaluation that expresses how much we like or dislike an object, issue, person, or action.

1. belief
2. attitude
3. cognition
4. affect
5. view

1. According to Chapter 9, ____________________ of ventures contacting venture capital firms receive financing from them.
   1. 2-4%
   2. 1-3%
   3. 6-9%
   4. 7-12%

1. Which is NOT one of Gladstone's 5 suggestions for making a presentation and dealing with Venture Capitalists?
2. Do not be rigid in pricing
3. Do not avoid answering questions and do not give vague answers
4. Do not press for an immediate decision
5. Do not divulge significant problems

16. Utilizing the "Field of Dreams" approach-if you build it they will come-is a most

efficient and effective strategy for new ventures.

1. True
2. False

17. According to Chapter 9, entrepreneurs should keep two points in mind above all else

when considering the competition. These are:

1. their products are the best and they have the most innovation
2. they know the customer and can offer the desired good or service
3. competition has no effect on marketability and pricing
4. never assume that competition is not a threat and must ensure their analysis and
5. assessment of competition is comprehensive and realistic

18. Which is a false statement of what questions you should ask in selecting your channel of distribution?

1. How do end users normally seek out and purchase similar products?
2. How do you circumvent intermediaries?
3. How is the product usually sold?
4. What is required to motivate and an intermediary to carry and promote a new product?
5. What tasks and duties do intermediaries perform and how are they compensated?

19. The purpose of research and development (R&D) is to identify sustainable

competitive advantages such as product quality, brand prestige, product reliability,

service, distribution and/or low cost.

1. True
2. False

20. A media plan to promote your product should be laid out for ____________ months and include type of media, frequency and cost for each promotion activity.

1. 6-12
2. 3-6
3. 18-24
4. 12-24