Business Planning
Chapter Exam Questions
Course Introduction
Business Planning is a comprehensive course that introduces students to the process of developing, analyzing, and implementing business plans in a variety of organizational settings. The course covers key components such as market research, competitive analysis, marketing strategies, financial projections, and operational planning. Students will learn how to identify business opportunities, assess risks, and create actionable strategies for launching and managing new ventures or growing existing businesses. Through case studies, group projects, and hands-on exercises, participants will develop the critical thinking and analytical skills necessary for effective decision-making and successful business management.
Recommended Textbook Essentials of Entrepreneurship and Small Business Management 9th Edition by Norman M. Scarborough
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1957 Verified Questions
1957 Flashcards
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Chapter 1: The Foundations of Entrepreneurship
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Sample Questions
Q1) Not all family-owned businesses are small; in fact, approximately one-third of the Fortune 500 companies are family businesses.
A)True
B)False
Answer: True
Q2) ________ entrepreneurs are business builders who seek innovative solutions to some of society's most vexing problems.
A)Social
B)Opportunistic
C)Serial
D)Necessity
Answer: A
Q3) Which of the following is a characteristic of copreneurs?
A)Mutual respect
B)Complementary business skills
C)A clear division of roles and authority
D)All of the above
Answer: D
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Chapter 2: Ethics and Social Responsibility: Doing the Right Thing
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109 Verified Questions
109 Flashcards
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Sample Questions
Q1) Actions that are legal, however, may not be ________.
A)ethical
B)complex
C)profitable
D)doable
Answer: A
Q2) Entrepreneurs build the foundation for ethical decision making by understanding how their personal values come to life in business situations.
A)True
B)False
Answer: True
Q3) A company's culture can serve either to support or undermine its employees' concepts of what constitutes ethical behavior.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Creativity and Innovation: Keys to Entrepreneurial Success
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Sample Questions
Q1) Christine has the ability to evaluate several options and pick the best one to solve a problem. The reasoning ability that Christine has is called ________.
A)convergent
B)divergent
C)lateral
D)intuitive
Answer: A
Q2) Contrary to conventional wisdom, people can be taught to be creative.
A)True
B)False
Answer: True
Q3) Which of the following question(s)should you consider before entering a lawsuit to protect intellectual property?
A)Can you afford the loss of time, money, and privacy the lawsuit will bring?
B)Can the opponent afford to pay if you win?
C)Do you expect to get enough from the suit to pay for the costs of hiring an attorney?
D)All of the above
Answer: D
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Chapter 4: Conducting a Feasibility Analysis and Designing a Business Model
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Sample Questions
Q1) What are the four major elements to be included in a financial feasibility analysis?
Q2) Generally, an industry is more attractive when quality substitute products are not readily available, the prices of substitute products are higher, and buyers' costs of switching products is high.
A)True
B)False
Q3) Capital requirements, estimate earnings, and return on investment are three aspects of the financial feasibility analysis.
A)True
B)False
Q4) Ideally, a focus group should have ________ members.
A)2-3
B)16-20
C)8-12
D)5-7
Q5) The Business Model Canvas consists of six elements.
A)True
B)False
6
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Chapter 5: Crafting a Business Plan and Building a Solid Strategic Plan
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Sample Questions
Q1) Ideally, a business plan should be about ________ pages in length.
A)10 to 20
B)20 to 40
C)40 to 75
D)75 to 100
Q2) Gathering competitive intelligence, such as "dumpster diving" in a competitors' trash, may raise questions regarding ________.
A)the integrity of the data
B)the competitive profile matrix
C)a cost benefit analysis
D)ethical standards
Q3) The value proposition that sets a company apart from its competitors and gives it a unique position in the market, superior to its competition, is its ________.
A)mission statement
B)competitive advantage
C)competitive profile
D)strategic plan
Q4) What advice would you offer an entrepreneur on how to create a mission statement for her/his company?
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Chapter 6: Forms of Business Ownership
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Sample Questions
Q1) Corporations must obtain a federal charter before they can conduct any business.
A)True
B)False
Q2) Which form of ownership generally has the least ability to accumulate capital?
A)Partnership
B)Sole proprietorship
C)Corporation
D)S corporation
Q3) State law requires that individuals creating a partnership file the Articles of Partnership with the Secretary of State.
A)True
B)False
Q4) In a partnership, the ________ partner(s)has (have)unlimited liability for the partnership's debts.
A)limited
B)dormant
C)nominal
D)general
Q5) What is an S corporation? Explain the advantages and the disadvantages of an S corporation.
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Chapter 7: Buying an Existing Business
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Sample Questions
Q1) The letter of intent is a nonbinding document.
A)True
B)False
Q2) When evaluating the assets of an existing business, the inventory ________.
A)is always current and salable
B)usually appreciates over time, making the business a bargain
C)should be judged on the basis of its market value, not its book value
D)is usually stated honestly and does not need an independent audit
Q3) Bizbuysell.com and Bizquest are examples of Internet sites that provide access to
A)business brokers
B)franchises available for sale
C)the hidden market of companies for sale
D)All of the above
Q4) The primary focus of the self-audit is to identify the type of business that you will be happiest and most successful owning.
A)True
B)False
Q5) What is the market approach to business valuation?
Q6) What is an ESOP?
Page 9
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Chapter 8: Franchising and the Entrepreneur
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Sample Questions
Q1) Define franchising. Explain the three types of franchising. Which is the fastest-growing segment?
Q2) The principle of putting a franchise's products or services directly in the paths of potential customers with smaller, less expensive outlets is called ________.
A)cobranding
B)intercept marketing
C)area development
D)master franchise
Q3) Some franchisors offer ________ to give existing franchisees the right to exclusive distribution of brand name goods or services within a particular geographic area.
A)territorial protection
B)exclusive rights
C)guaranteed protection
D)exclusivity
Q4) A good method for evaluating a franchisor's reputation is to interview existing franchise owners about the operation.
A)True
B)False
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Chapter 9: Building a Powerful Bootstrap Marketing Plan
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117 Verified Questions
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Sample Questions
Q1) Bootstrap marketing is a marketing approach that takes an unconventional, low-cost and creative approach to marketing that can give ________ a competitive edge over ________ competitors.
A)small companies; larger
B)larger companies; smaller
C)small companies; entrepreneurial
D)entrepreneurs; small
Q2) A combination of news covered by the media that boosts sales without having to pay is best described by the term ________.
A)bootstrap marketing
B)entertailing
C)public relations
D)data mining
Q3) The marketing approach that is most effective today for a small business is ________.
A)mass marketing
B)market segmentation
C)niche marketing
D)individualized (one-to-one)marketing
Q4) How can Marvin develop "stellar" customer service?
Page 11
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Chapter 10: E-Commerce and the Entrepreneur
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142 Verified Questions
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Sample Questions
Q1) To minimize the likelihood of invasion by hackers, e-commerce companies rely on several tools, including ________.
A)virus detection software
B)intrusion detection software
C)firewalls
D)All of the above
Q2) A measurement of the cost a company incurs to generate each purchase or customer registration is the ________.
A)cost per acquisition (CPA)
B)bounce rate
C)conversion ratio
D)browser-to-buy ratio
Q3) Which of the following is not a common reason customers leave Web sites before checking out?
A)Total shipping charges were too high.
B)The privacy policy was not posted.
C)The shopping cart was too hard to find.
D)The site did not appear trustworthy.
Q4) Identify the benefits of selling on the Web.
Q5) How might a Web site benefit the youth club?
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Chapter 11: Pricing and Credit Strategies
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Sample Questions
Q1) Describe two situations - one where you consider dynamic pricing is ethical and the other where dynamic pricing is unethical.
Q2) The best way to survive a price war is to engage in the battle and emphasize the unique features, benefits, and value your company offers its customers.
A)True
B)False
Q3) A technique offering customers discounts if they purchase in quantity is referred to as ________.
A)optional product pricing
B)bundling
C)multiple-unit pricing
D)customized pricing
Q4) Price lining occurs when a small company raises the price of all of its goods by the same percentage to cover operating expenses.
A)True
B)False
Q5) Explain the different kinds of credit a small business can offer its customers and the impact each has on pricing.
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Chapter 12: Creating a Successful Financial Plan
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Sample Questions
Q1) Which of the following is not a liquidity ratio?
A)Current ratio
B)Total asset turnover ratio
C)Quick ratio
D)None of the above
Q2) The ________ ratio measures the percentage of total assets financed by a small company's creditors compared to its owners.
A)debt
B)times-interest-earned
C)net sales to total assets
D)total asset turnover
Q3) Help Jim compute the break-even point for his brake service.
Q4) ________ ratios measure the extent to which an entrepreneur relies on debt capital rather than equity capital to finance a business.
A)Liquidity
B)Leverage
C)Operating
D)Profitability
Q5) Were the bankers correct? Do you think Jim should expand the business?
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Chapter 13: Managing Cash Flow
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Sample Questions
Q1) Small business managers need not be concerned about investing surplus cash since small amounts of cash sitting around for a few days or weeks are not worth investing.
A)True
B)False
Q2) For cash planning purposes, it is better to underestimate cash disbursements than to overestimate them.
A)True B)False
Q3) For product-based businesses, ________ often represents their largest capital investment.
A)account receivables
B)inventory
C)plant and equipment
D)real estate
Q4) What are the basic steps in preparing a cash budget? Which forecast is the "heart" of the cash budget?
Q5) Why is cash a unique asset? What are the advantages of efficient cash management?
Q6) What steps can a small business owner take to minimize bad debt losses?
Page 15
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Chapter 14: Choosing the Right Location and Layout
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Sample Questions
Q1) Select six of the features that are important to a lean, efficient manufacturing layout and identify a potential benefit that they may offer the business.
Q2) The Lifestyle Market Analyst matches population demographics with age.
A)True
B)False
Q3) A ________ combines the drawing strength of a large regional mall with the convenience of a neighborhood shopping center.
A)power center
B)community shopping center
C)central business district
D)strip mall
Q4) Which of the following characteristics for selecting a city would be of greatest interest to a retail store selling fine china and collectibles?
A)Public services
B)Transportation
C)Zoning
D)Population characteristics
Q5) List and explain the main location criteria for retail and service businesses.
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Chapter 15: Sources of Financing: Equity and Debt
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Sample Questions
Q1) Corporate venture capital accounts for approximately 17 percent of all venture capital.
A)True
B)False
Q2) Which of the following represents capital?
A)Inventory
B)Equipment and machinery
C)Cash
D)All of the above
Q3) Only about half of the companies that attempt a public stock offering ever complete the process.
A)True
B)False
Q4) In asset-based borrowing, the ________ rate is the percentage of an asset's value that a lender will lend.
A)prime
B)margin
C)advance
D)discounted
Q5) What other sources of capital would you suggest that Christine explore?
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Chapter 16: Global Aspects of Entrepreneurship
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Sample Questions
Q1) Explain why it is important to "go global." What benefits can companies that take the plunge into global business expect?
Q2) What strategies for trade can businesses use when exporting to countries whose currencies are not convertible to other currencies? What are the disadvantages?
Q3) Small businesses contribute ________ percent of U.S. export sales.
A)20
B)25
C)33
D)40
Q4) The North American Free Trade Agreement (also known as NAFTA)served to
A)bring South America, Mexico, the U.S., and Canada together as one market
B)eliminate all tariffs among member nations, effective immediately, and raise them for nonmembers
C)mostly benefit the trading relationship between Canada and the United States
D)create a unified market of 465 million people and $18.1 trillion in goods and services
Q5) Identify and discuss the international barriers to trade.
Q6) Describe the other barriers to trade, including political, business, and cultural.
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Chapter 17: Building a New Venture Team and Planning for the Next Generation
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Sample Questions
Q1) Business owners must recognize that what they do before they start interviewing candidates for a position determines to a great extent how successful they will be in the hiring process.
A)True
B)False
Q2) Job enlargement is based on the premise that the best way to design a job is to break it down into its simplest form and to standardize each task.
A)True
B)False
Q3) The Dictionary of Occupational Titles, a listing of more than 20,000 job titles and descriptions, is a useful tool for getting a small business owner started when writing job descriptions.
A)True B)False
Q4) Effective leaders know that what they do is more important than what they say because they set the example for their employees.
A)True
B)False
Page 19
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