Building Your Dream Canadian 10th Edition By Good - Test Bank

Building Your Dream Canadian 10th Edition By Good – Test Bank

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Sample Questions Are Posted Below

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Another term used to describe a business plan is:
A) A progress plan
B) A feasibility plan
C) A financial plan
D) A game plan
Answer: D
2) The business planning process focuses on the:
A) Customers
B) Future
C) Present
D) Past
Answer: B
3) The ________ lays out the “super goal” that you would like your business to achieve.
A) Financial statement
B) Vision statement
C) Concept statement
D) Mission statement
Answer: B
4) The ________ defines the “super strategy” of your business.
A) Vision statement
B) Financial statement
C) Concept statement
D) Mission statement
Answer: D
5) The length and detail of your business plan will depend on all of the following, except:
A) The type of business
B) The expectations of stakeholders
C) The expectations of your financial institution
D) The expectations of competitors
Answer: D
6) At the heart of the capital-raising process is:
A) Your feasibility study
B) Your business plan
C) Your statement of cash flows
D) Your income statement
Answer: B
7) Rather than using page count as a way to measure the length of a business plan, expert Tim Berry recommends
that you measure a plan based on:
A) Readability and summarization
B) Readability and grammar
C) Sentence structure and summarization
D) Sentence structure and grammar
Answer: A
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8) According to Tim Berry, business planning has become:
A) Long-winded and overly formal
B) Lengthy and complex
C) Short and lacking in depth
D) Leaner and more agile
Answer: D
9) Which of the following components of a business plan will answer the question, “is there a need and demand?”?
A) Detailed financials
B) Market opportunity and competitive advantage
C) Executive summary
D) Goals and business strategy
Answer: B
10) Financial institutions are likely to read the executive summary of your business plan, and then skip directly to
the section pertaining to:
A) Incorporation
B) The competition
C) Financials
D) Competitive advantage
Answer: C
11) Many financial institutions will accept a ________ for use by early-stage businesses in applying for a bank loan.
A) Consultant’s perspective
B) Feasibility study
C) Cash flow statement
D) Summary business plan
Answer: D
12) A ________ gives the title of the plan or the name of your business, and outlines the major features of your plan
that may be of interest.
A) Letter of Expression
B) Letter of Transmittal
C) Letter of Purpose
D) Letter of Intent
Answer: B
13) Which part of the business plan should capture the attention of the reader, stimulate interest, and get the reader
to keep on reading?
A) Letter of Transmittal
B) Executive Summary
C) Title Page
D) Table of Contents
Answer: B
14) All of the following websites offer outlines, instructions, and templates for developing a business plan, except:
A) Business Development Bank of Canada
B) Industry Canada
C) Canadian Bank Association
D) Canada Business Network
Answer: B
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15) Which part of the business plan will include information about the goals and objectives of the business?
A) Body of the plan under “Company and the Industry”
B) Body of the plan under “Market Analysis”
C) Letter of transmittal
D) Executive summary
Answer: A
16) Which part of the business plan will describe the profile of your principal target customers?
A) Body of the plan under “Your Development Plan”
B) Body of the plan under “Company and the Industry”
C) Body of the plan under “Market Analysis”
D) Body of the plan under “Product/Service Offering”
Answer: C
17) Letters of reference and copies of legal documents can be found in which component of a business plan?
A) Executive summary
B) Body of the plan under “Company and the Industry”
C) Appendices
D) Letter of transmittal
Answer: C
18) In which part of the business plan will information about outstanding regulatory, testing, or other requirements
be found?
A) Body of the plan under “Market Analysis”
B) Body of the plan under “Product/Service Offering”
C) Body of the plan under “Company and the Industry”
D) Body of the plan under “Your Development Plan”
Answer: D
19) Which part of the business plan will contain estimates pertaining to sales and market share?
A) Body of the plan under “Product/Service Offering”
B) Body of the plan under “Company and the Industry”
C) Body of the plan under “Market Analysis”
D) Body of the plan under “Your Marketing Plan”
Answer: C
20) Which part of the business plan will contain information about the name, address, and contact numbers as well
as key company contacts?
A) Table of Contents
B) Letter of Transmittal
C) Executive Summary
D) Title Page
Answer: D
21) All of the following should be included in the marketing plan section of the business plan, except:
A) Proprietary issues
B) Service and warranty
C) Sales and distribution
D) Pricing
Answer: A
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22) Which of the following is most likely found under the development plan section of the business plan?
A) Costs
B) Service and warranty
C) Facilities and equipment
D) Sales and distribution
Answer: A
23) Under which section of the business plan are environmental issues most likely to be described?
A) Production/Operations Plan
B) Development Plan
C) Marketing Plan
D) Market Analysis
Answer: A
24) Under which section of the business plan is the profile of the principal target customers described?
A) Production/Operations Plan
B) Development Plan
C) Market Analysis
D) Marketing Plan
Answer: C
25) Eric Ries is the author of:
A) Canvas Modelling Tool
B) The Lean Startup
C) The Business Model Canvas
D) The Summary Plan
Answer: B
26) In the Lean Startup, author Eric Ries says that rather than wasting time creating elaborate business plans:
A) Businesses should be testing their vision continuously
B) Businesses should rely on potential stakeholders to collaborate on a business plan.
C) Businesses should create a prototype to market their concept to investors.
D) Businesses should test market their concept internationally.
Answer: A
27) All of the following are included in the nine elements of the Business Model Canvas, except:
A) Conduct Codes
B) Key Partnerships
C) Value Propositions
D) Cost Structure
Answer: A
28) A small, one person business can easily use the________, while larger, multiple employee companies are more
likely to use the ________.
A) Lean Model Canvas; Summary Business Plan
B) Lean Model Canvas ; Business Model Canvas
C) Summary Business Plan; Operational Business Plan
D) Business Model Canvas; Lean Model Canvas
Answer: B
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29) Your mission statement should be short (a sentence or two). It should also be easy to understand and easy to
remember.
A) True
B) False
Answer: B
30) The typical business plan is roughly 20 pages in length.
A) True
B) False
Answer: B
31) Your business plan should lay out the details so that everyone can see precisely where you are now, where you
are going, and how you plan to get there.
A) True
B) False
Answer: A
32) The operational business plan is typically over 40 pages in length and is the most frequently used form of
business plan.
A) True
B) False
Answer: B
33) A budget is generally included in the full business plan.
A) True
B) False
Answer: A
34) Contingency plans are not described in a business plan.
A) True
B) False
Answer: B
35) If you have used professional advisers, such as lawyers, accountants, insurance brokers, etc., you should
provide their names and contact information in your business plan under the heading “Management team”.
A) True
B) False
Answer: A
36) It is not necessary to mention whether employees of your potential business will be unionized or not.
A) True
B) False
Answer: B
37) Patents and trademark information should be described in the Production/Operations Plan.
A) True
B) False
Answer: B
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38) The characteristics of your location in relation to market size, traffic flows, local and regional growth rates,
income levels, and similar market-related factors is presented as part of the production/operations plan.
A) True
B) False
Answer: A
39) Although your operations plan should indicate your planned facilities, it is not necessary to detail the
machinery and equipment that is required for your manufacturing process.
A) True
B) False
Answer: B
40) The Lean Startup has been an international phenomenon however it is only used by small scale companies.
A) True
B) False
Answer: B
41) Successful new ventures do not go to market with their first idea; instead, the product/ service usually goes
through several iterations before arriving at the final version.
A) True
B) False
Answer: A
ESSAY. Write your answer in the space provided or on a separate sheet of paper.
42) Outline the key components of the vision statement.
Answer: The key components of your vision statement will be:
• Name of your planned business venture
• Product/service offering you plan to provide
• Target market(s) you intend to serve
43) Outline the key components of the mission statement.
Answer: The key components of your mission statement will describe:
• What your business will do
• Its market focus, niche, or particular image
• Your planned location and the geographic market served
• How you plan to grow the business
• Your sustainable uniqueness, or what will distinguish your business from others and will continue to
do so on a long-term basis
44) In what ways can an effective business plan serve you externally, or outside of the immediate
internal planning function.
Answer: Externally, your business plan can serve as an effective sales document and is considered by many experts
to be the heart of the capital-raising process. Financial institutions and investors will expect you to be
professional in your approach, fully prepared, and armed with a thoroughly researched, well-written
business plan when seeking their support.
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45) Compare a Summary Business Plan to an Operational Business Plan.
Answer: Summary business plans commonly run about 10 pages. A summary plan is a more “to the point” plan.
This plan can be used for all types of business. A summary business plan may be sufficient to whet the
appetite of friends, relatives, and other private investors who might subsequently request a copy of the
full plan if they are sufficiently interested. The operational business plan will usually exceed 40 pages in
length but is used only infrequently, such as when a business is planning to grow very rapidly and must
try to anticipate a wide variety of issues.
46) Why is the executive summary thought to be the most important part of a business plan?
Answer: The executive summary is the most important part of your business plan. It must capture the attention of
the reader, stimulate interest, and get the reader to keep on reading the rest of your plan. In two or three
pages or less, the summary should concisely explain your business’s current status; describe its products
or services and their benefits to your customers; provide an overview of your venture’s objectives, market
prospects, and financial forecasts; and, if you are using the plan to raise external financing, indicate the
amount of financing needed, how the money is to be used, and the benefits to the prospective lender or
investor. The summary has to make the reader comfortable that the entrepreneur knows what they are
doing.
47) If your potential business is a manufacturing business, what items should be addressed in the
production/operations plan?
Answer: Your production/operations plan outlines the operating side of your business. It should describe your
plant location, the kind of facilities needed, space requirements, capital equipment needed, and your
labour requirements. If your plan is for a manufacturing business, you should also discuss such areas as
your purchasing policy, quality control program, inventory control system, production cost breakdown,
and whether you plan to manufacture all subcomponents of the product yourself or have some of them
produced for you by someone else.
48) Provide examples of the kind of material that might be contained within the appendix of your business plan.
Answer: Answers may vary. Examples include:
1. Product specifications and photographs
2. Detailed résumés of the management team
3. Lists of prospective customers
4. Names of possible suppliers
5. Job descriptions for the management team
6. Consulting reports and market surveys
7. Copies of legal documents such as leases, franchise and licensing agreements, contracts, licences,
patent or trademark registrations, and articles of incorporation
8. Letters of reference
9. Relevant magazine, trade journal, and newspaper articles
49) Identify and describe three of the “seven deadly sins for business plans”.
Answer: Answers will vary. Among the answers should be three of the following sins: Sin #1: The plan is poorly
prepared and has an unprofessional look; Sin #2: The plan is far too slick; Sin #3: The executive summary
is too long and ramblingit doesn’t get right to the point; Sin #4: It’s not clear where the product is in
terms of developmentdoes it exist or not? Can it be readily manufactured?; Sin #5: No clear answer is
provided to the question: “Why would anyone ever want to buy one?”; Sin #6: It gives no clear statement
of the qualifications of the management team; Sin #7: Financial projections are largely an exercise in
wishful thinking.
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50) Outline the nine elements of the Business Model Canvas.
Answer: 1. Customer Segments: Who are the customers? What do they think? See? Feel? Do?
2. Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
3. Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
4. Customer Relationships: How do you interact with the customer through their ‘journey’?
5. Revenue Streams: How does the business earn revenue from the value propositions?
6. Key Activities: What uniquely strategic things does the business do to deliver its proposition?
7. Key Resources: What unique strategic assets must the business have to compete?
8. Key Partnerships: What can the company not do so it can focus on its Key Activities?
9. Cost Structure: What are the business’ major cost drivers? How are they linked to revenue?
51) What three things does the Business Model Canvas fundamentally deliver, according to Alexander Cowan?
Answer: Focus: Stripping away the 40+ pages of ‘stuff’ in a traditional business plan, I’ve seen users of the BMC
improve their clarity and focus on what’s driving the business (and what’s non-core and getting in the
way).
Flexibility: It’s much easier to tweak the model and try things (from a planning perspective) with
something that’s sitting on a single page.
Transparency: Your team will have a much easier time understanding your business model and be much
more likely to buy in to your vision when it’s laid out on a single page.
52) Compare the business model canvas to the lean model canvas based on the elements of target, focus and
customers.
Answer:
Element Business Model Canvas Lean Model Canvas
Target New and existing businesses Startup businesses purely
Focus
Customers, Investors, Entrepreneurs,
Consultants, Advisors Entrepreneurs purely
Customers
Lays emphasis on customer
segments, channels and customer
relationships for all businesses
Does not lay much emphasis on
customer segments because startups
have no known or tested products to
sell
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53) Compare the business model canvas to the lean model canvas based on the elements of approach, competition,
and application.
Answer:
Element Business Model Canvas Lean Model Canvas
Approach
It lays down the infrastructure, lists
the nature and sources of financing
and the anticipated revenue streams
of the business
It begins with the problem, a
proposed solution, the channels to
achieving the solution, costs
involved and the anticipated
revenue streams
Competition
It focuses on value proposition in
quantitative and qualitative terms as
way to stay smart in the market
It as sesses whether the business has
an unfair advantage over the rest
and how to capitalize on it for better
grounding
Application
It fosters candid understanding,
creativity, discussion and
constructive analysis
It is a simple problem-solution
oriented approach which enables
the entrepreneur to develop
step-by-step
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