Chapter 3 Review

A business plan is not intended for

• your competition

• potential investors

• your bank

• any of the above

Purposes of a business plan include which of the following?

• It explains our idea for a product or service

• It sets specific objectives and descrobes how they will be achieved

• It describes the backgrounds and experience of the people who will run the business

• all of the above

Which of the following is not a true statement regarding risks?

• Identifying the possible risks your business faces will alarmlenders and investors and cause them to withold funds.

• Potential investors and lenders want to know the risks your business faces and how you plan to deal with them.

• Lenders will appreciate the fact that you know the risks you face and have a plan for dealing with them.

• Lenders know that every business faces risks

The purpose of including supporting documents in a business plan is to

• make the plan lengthy

• provide additional information

• give the readers more information than they might need

• explain your business idea

A written document that describes all the steps necessary for opening and operating a successful business is

• a business plan

• a cover letter

• pro forma financial statements

A financial statement based on projected revenues and expenses

• business plan

• pro forma financial statement

• cover letter

A letter that introduces and explains an accompanying document or set of documents

• trade associations

• exit strattegy

• cover letter

A short restatement of a report

• executive summary

• cover letter

• pro forma financial statment

A brief explanation of why you are asking for a loan and what you plan to do with the money.

• exit stratgy

• executive summary

• statement of purpose

An independent agency of the federal government that was created to provide support to entrepreneurs and small businesses.

• SBA

• SBDC

• SCORE