Business Planning
Midterm Exam
Course Introduction
Business Planning is a comprehensive course that equips students with the skills and knowledge required to develop, evaluate, and implement effective business plans. Through theoretical frameworks and practical exercises, students explore key concepts such as market analysis, financial forecasting, competitive strategy, organizational structure, and risk management. By analyzing real-world case studies and engaging in hands-on projects, learners will master the process of transforming a business idea into a viable plan, ready to attract investment and guide organizational growth. The course emphasizes critical thinking, creative problem-solving, and the application of best practices in business planning across a range of industries.
Recommended Textbook
Entrepreneurship 10th Edition by Robert Hisrich
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15 Chapters
1220 Verified Questions
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Chapter 1: Entrepreneurship and the Entrepreneurial
Mind-Set
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52 Verified Questions
52 Flashcards
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Sample Questions
Q1) How Ewing Kauffman ran his business illustrates corporate entrepreneurship. A)True
B)False Answer: True
Q2) Research indicates that male entrepreneurs tend to start their first significant venture in their middle 30s,while women entrepreneurs tend to do so in their early 30s.
A)True
B)False Answer: False
Q3) Within the moral-support network,most entrepreneurs indicate that their _____ are their biggest supporters.
A)mentors
B)friends
C)parents
D)spouses
Answer: D
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Page 3
Chapter 2: Entrepreneurial Intentions and Corporate Entrepreneurship
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Sample Questions
Q1) Entrepreneurial endeavors consist of new business venturing,innovativeness,self-renewal,and reactiveness.
A)True
B)False
Answer: False
Q2) Entrepreneurially run firms are driven by controlled resources whereas traditionally managed firms are driven by perception of opportunity.
A)True
B)False
Answer: False
Q3) The first step in establishing corporate entrepreneurship in an organization is:
A)finding mid level managers to champion ideas
B)developing ways to get closer to customers
C)learn to be more productive with fewer resources
D)securing commitment from top management
Answer: D
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Chapter 3: Entrepreneurial Strategy: Generating and Exploiting New Entries
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97 Verified Questions
97 Flashcards
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Sample Questions
Q1) Using a broad scope strategy helps to reduce the risk of market uncertainty.
A)True
B)False Answer: True
Q2) Emerging industries are industries that have been around for years but are just starting to experience explosive growth.
A)True
B)False Answer: False
Q3) Which of the following statements is(are)true?
A)Knowledge is a valuable entrepreneurial resource that is gained through formal education.
B)Knowledge can be gained through highly experienced managers and/or firms.
C)Knowledge based on experience is unlikely to be learned in a classroom.
D)Research,more than knowledge,leads to the generation of new entries in markets and technologies.
Answer: C
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Page 5
Chapter 4: Creativity and the Business Idea
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Sample Questions
Q1) Which of the following statements is true?
A)Customers form the largest source of new ideas for entrepreneurs.
B)While members of the distribution channel may be willing to provide new ideas for entrepreneurs,they may not help market them.
C)The Federal Government is not a source of new ideas since the patent information they collect is confidential.
D)Potential entrepreneurs should establish a formal method for monitoring and evaluating competitive products and services on the market.
Q2) Using the big-dream approach,a new idea is developed through a list of related issues or suggestions.
A)True
B)False
Q3) In the concept stage,the refined idea is tested to determine consumer acceptance. A)True
B)False
Q4) Creative synthesis is closely connected to the technique of parameter analysis.
A)True
B)False
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6
Chapter 5: Identifying and Analyzing Domestic and International Opportunities
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Sample Questions
Q1) Define political risk analysis,and identify and briefly describe the three major types of political risk.
A.Operating risk - risk of interference with the operations of the venture
B.Transfer risk - risk in attempting to shift assets or other funds out of the country
C.Ownership risk - the largest potential risk,where the country takes over the venture's property and employees
Q2) A turn-key project is best defined as:
A)a method of doing business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners
B)giving a foreign manufacturer the right to use a patent in return for the payment of a royalty
C)a method in which an entrepreneur contracts his or her management techniques and skills to a (foreign)purchasing company
D)a form of direct foreign investment in which the investing entrepreneur holds a minority ownership position in the foreign venture
Q3) List the seven various aspects of culture.
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Page 7
Chapter 6: Intellectual Property and Other Legal Issues for the Entrepreneur
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Sample Questions
Q1) What type of agreement must always be in writing in order to be a legally binding contract?
A)Client
B)Distributor
C)Supplier
D)Real estate
Q2) A patent attorney hired as a specialist to help the entrepreneur obtain a patent would most likely be hire on a:
A)retainer fee
B)success fee
C)out-of-pocket reimbursement
D)one-time fee
Q3) An example of a business method patent is Amazon.com's single clicking feature used by a buyer to order products.
A)True
B)False
Q4) What are the main benefits of a registered trademark?
Q5) The most commonly issued type of patent is the plant patent. A)True
B)False
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Chapter 7: The Business Plan: Creating and Starting the Venture
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Sample Questions
Q1) Investors often place more emphasis on the entrepreneur's _________ than lenders do.
A)character
B)experience
C)financial records
D)personal viewpoint
Q2) In preparing the business plan,entrepreneurs can provide their own perspective and should consider the needs of external sources.
A)True
B)False
Q3) Identify the most common reasons why business plans fail.
A.Goals set by the entrepreneur are unreasonable.
B.Objectives are not measurable.
C.The entrepreneur has not made a total commitment to the business or to the family.
D.The entrepreneur has no experience in the planned business.
E.The entrepreneur has no sense of potential threats or weaknesses to the business.
F.No customer need was established for the proposed product or service.
Q4) List three sources of Financial and Industry Operating Ratios from the text.
Page 9
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Chapter 8: The Marketing Plan
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Sample Questions
Q1) The management team and the venture's company mission are examples of external environmental factors.
A)True
B)False
Q2) If the entrepreneur is constantly faced with significant changes in the marketing strategy,then it is likely that:
A)there is insufficient monitoring of the plan.
B)the plan was not prepared properly.
C)the business marketing effort does not support the strategy.
D)there have been too many external factors that were difficult to predict.
Q3) Give examples of what types of goals should be set in the goals and objectives section.
Q4) The marketing system identifies the major interacting components,both internal and external to the firm.
A)True
B)False
Q5) Focus groups should be led by the entrepreneur.
A)True
B)False
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Chapter 9: The Organizational Plan
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Sample Questions
Q1) The standard term of a limited liability company is 30 years.
A)True
B)False
Q2) Which type of ownership is the most expensive to start?
A)Corporation
B)General partnership
C)Limited partner
D)Sole proprietorship
Q3) Sole proprietorships:
A)have no time limit on how long they may exist.
B)are perpetual.
C)continue even upon the death of the owner.
D)allow a member of the deceased partner's family take over as a partner.
Q4) S corporation status means:
A)shareholders do not have limited liability.
B)the corporation is subject to a minimum tax of 34 percent.
C)consent by a majority of shareholders is required for the election of this form of business.
D)the corporation pays no tax.
Q5) What are the main characteristics of an LLC?
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Chapter 10: The Financial Plan
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Sample Questions
Q1) To satisfy outside investors,the financial plan will need three years of projected financial data.
A)True
B)False
Q2) Fixed operating expenses include all of the following except:
A)Rent
B)Utilities
C)Raw Materials
D)Depreciation
Q3) The basic balance sheet relationship is:
A)assets plus owner's equity equal liabilities.
B)assets equal liabilities plus owner's equity.
C)assets plus liabilities equal owner's equity.
D)assets equal owner's equity minus liabilities.
Q4) When developing operating and capital budgets,the entrepreneur can seek advice from experts,but should retain the final say so.
A)True
B)False
Q5) Define capital budgeting.
Q6) Define the contribution margin and its importance.
Page 12
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Chapter 11: Sources of Capital
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Sample Questions
Q1) When using private placement funding the entrepreneur must disclose all information as accurately as possible.
A)True
B)False
Q2) An entrepreneur contributing his or her own capital would be an example of internally generated funds.
A)True
B)False
Q3) Any patent rights on technology developed in SBIR grants are the property of the federal government.
A)True
B)False
Q4) During Phase II of an SBIR grant up to _______ can be awarded.
A)$100,000
B)$500,000
C)$750,000
D)$1,000,000
Q5) The funds for a SBA guaranteed loan are provided by the federal government. A)True
B)False
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Chapter 12: Informal Risk Capital, Venture Capital, and Going Public
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Sample Questions
Q1) Under the ________,reporting requirements are increased and due dates of reports to the SEC are accelerated.
A)Sarbanes-Oxley Act
B)Blue sky laws
C)Securities Regulation Act
D)Social Security Act
Q2) The current ratio is used to measure the long-term solvency of the venture and its ability to meet short-term debts.
A)True
B)False
Q3) Identify the main advantages and disadvantages of going public.
A.Advantages - ability to obtain equity capital,enhanced ability to borrow,enhanced ability to raise equity,liquidity and valuation,prestige,personal wealth.
B.Disadvantages - Increased risk of liability,expense,regulation of corporate governance policies and procedures,disclosure of information,pressures to maintain growth pattern,loss of control.
Q4) List three reasons why a Business Angel may reject a proposal.
Q5) What are the three types of risk capital markets?
Page 14
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Chapter 13: Strategies for Growth and Managing the Implication of Growth
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Sample Questions
Q1) Which of the following would NOT be a recommended diversification strategy?
A)Backward integration.
B)Horizontal integration.
C)Forward integration.
D)Integration into markets unrelated to existing products.
Q2) An increase in supplier prices may require:
A)raising the price of products/services.
B)purchase of lesser inventory.
C)an increase in the purchasing budget.
D)reviewing all other expenses and perhaps institute tighter controls.
Q3) The principle of teamwork states that an entrepreneur spends too much time with employees and should try to become less accessible to them in order to increase their efficiency.
A)True
B)False
Q4) Which of the following is not a benefit of time management?
A)Improvement of esprit de corps.
B)Decreased job satisfaction.
C)Increased productivity.
D)Less anxiety and tension.
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Chapter 14: Accessing Resources for Growth From External
Sources
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Sample Questions
Q1) The reservation price is the price at which the entrepreneur is ready to accept the agreement.
A)True
B)False
Q2) The two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets or the bootstrap purchase of these assets.
A)True
B)False
Q3) The best way to "increase the size of the pie" in negotiation is to use a conflict resolution approach.
A)True
B)False
Q4) The __________ is the price at which the entrepreneur is indifferent about whether to accept the agreement or choose an alternative.
A)break even price
B)franchise price
C)bargaining zone
D)reservation price
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Chapter 15: Succession Planning and Strategies for
Harvesting and Ending the Venture
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Sample Questions
Q1) One advantage of an ESOP is that it is easy to establish.
A)True
B)False
Q2) When the debt is prorated to the creditors as a settlement in Chapter 11 this is called:
A)Substitution.
B)Evolution.
C)Extension.
D)Composition settlement.
Q3) When a venture is in trouble and facing bankruptcy,the entrepreneur should first sit down with his or her spouse and explain what is happening.
A)True
B)False
Q4) This occurs when two or more of the largest creditors agree to postpone any claims,acting as stimulus for smaller creditors to also agree to the plan.
A)Extension.
B)Evolution.
C)Substitution.
D)Composition settlement.
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