Business Plan Outline Quiz
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Questions and Answers

Which of the following is NOT a phase of the customer journey outlined?

  • Retention
  • Consideration
  • Awareness
  • Purchase (correct)

    • Customers need to be aware of your company before they consider making a purchase.

    True

    What is one marketing channel that can help create awareness among potential customers?

    Social media sites

    In the consideration phase, customers evaluate ________ before making a purchase decision.

    <p>competitors</p> Signup and view all the answers

    Match the marketing channels with their corresponding characteristics:

    <p>Search engines = Useful for targeted advertising based on searches Billboards = Visual advertising in high-traffic areas Email = Direct communication with potential customers Podcasts = Audio content for engagement with listeners</p> Signup and view all the answers

    What is crucial in the consideration phase?

    <p>Distinguishing your brand</p> Signup and view all the answers

    All marketing channels are equally effective for every target audience.

    <p>False</p> Signup and view all the answers

    What should a communications strategy outline during the consideration phase?

    <p>Important talking points to distinguish from competitors</p> Signup and view all the answers

    What is the primary market in a business context?

    <p>Customers who are most likely to buy frequently or in high volume</p> Signup and view all the answers

    Identifying secondary markets is irrelevant for a business growth strategy.

    <p>False</p> Signup and view all the answers

    What should be considered when estimating the size of target markets?

    <p>The number of potential customers and their likely spending in a given year.</p> Signup and view all the answers

    A competitive landscape includes both direct and __________ competitors.

    <p>indirect</p> Signup and view all the answers

    Which element is NOT highlighted when describing ideal customers?

    <p>Income level</p> Signup and view all the answers

    Match the following market types to their descriptions:

    <p>Primary Market = Group of customers likely to buy at high volume Secondary Market = Group of customers likely to buy occasionally Ideal Customer = Customer that best fits the purchasing profile Competitive Landscape = Overview of direct and indirect competitors</p> Signup and view all the answers

    Trade associations play no role in supporting business products or services.

    <p>False</p> Signup and view all the answers

    What should a business do in relation to opportunities and threats in their industry?

    <p>Capitalize on opportunities and handle threats.</p> Signup and view all the answers

    What is the purpose of a break-even analysis?

    <p>To identify sales goals needed to make a profit</p> Signup and view all the answers

    Fixed costs change significantly from month to month.

    <p>False</p> Signup and view all the answers

    What are the three pieces of information required to perform a break-even analysis?

    <p>Fixed costs per month, variable costs per unit, average price per unit.</p> Signup and view all the answers

    The _____ statement is more detailed than cash flow projections, breaking down costs into various categories.

    <p>Profit and Loss (P&amp;L)</p> Signup and view all the answers

    Match the following terms with their definitions:

    <p>Fixed costs = Costs that remain stable each month Variable costs = Costs that fluctuate with production volume Average price per unit = The typical amount a customer pays for one unit Cash flow projections = Estimates of future cash inflows and outflows</p> Signup and view all the answers

    Which costs are included in variable costs?

    <p>Inventory and shipping</p> Signup and view all the answers

    Monthly sales must be above the break-even quantity to avoid losing money.

    <p>True</p> Signup and view all the answers

    What should you compare to demonstrate profitability?

    <p>Estimated sales revenue and estimated operating costs.</p> Signup and view all the answers

    What does the break-even quantity (BEQ) represent for a business?

    <p>The number of units needed to cover costs</p> Signup and view all the answers

    P&L statements are unnecessary for businesses that are not yet operational.

    <p>False</p> Signup and view all the answers

    What should be included in the section regarding prior financing?

    <p>Detailed information about existing debt, equity, and other financial arrangements.</p> Signup and view all the answers

    The financial need section should outline how much money is needed to __________ or expand the business.

    <p>launch</p> Signup and view all the answers

    What is the main purpose of creating a commercialization strategy for a new product?

    <p>To outline the current status and timeline for marketability</p> Signup and view all the answers

    Match the following financial activities with their descriptions:

    <p>Equity = Funds raised through ownership shares Debt = Funds borrowed that require repayment Investment = Contributions in exchange for returns Loans = Borrowed capital with interest and repayment terms</p> Signup and view all the answers

    Startup costs should be itemized and detailed in the financials section of a business plan.

    <p>True</p> Signup and view all the answers

    What formula is used to calculate the break-even quantity (BEQ)?

    <p>BEQ = FC / (AP - VC)</p> Signup and view all the answers

    What is a crucial component of the exit strategy?

    <p>How profits will be used after exiting</p> Signup and view all the answers

    Any amount of monthly sales above your BEQ should turn into _____ .

    <p>profits</p> Signup and view all the answers

    An appendix is used to include supporting documentation relevant to the business plan.

    <p>True</p> Signup and view all the answers

    What factors need to be explained when discussing how finances will be obtained?

    <p>Sources of finances, personal contributions, investor compensation, loan terms, and conditions.</p> Signup and view all the answers

    Match the financial terms with their definitions:

    <p>Startup Costs = Costs associated with launching a business Monthly Costs = Costs needed to operate a business each month Fixed Costs = Costs that do not change with the level of production Variable Costs = Costs that vary with the level of output</p> Signup and view all the answers

    Which of the following is NOT a consideration when setting financial objectives?

    <p>Choosing a marketing strategy</p> Signup and view all the answers

    Additional financing is often needed to grow a business.

    <p>True</p> Signup and view all the answers

    What can businesses monitor to avoid difficulties associated with growth?

    <p>Important milestones</p> Signup and view all the answers

    What should be emphasized in a business plan if investors are the audience?

    <p>Strong financial highlights</p> Signup and view all the answers

    The table of contents in a business plan does not need to follow the exact sections included in the document.

    <p>False</p> Signup and view all the answers

    Name two components that should be included in the financial section of a business plan.

    <p>Startup Costs, Cashflow Projections</p> Signup and view all the answers

    A business plan should contain an ______ that summarizes the essential components of the plan.

    <p>Executive Summary</p> Signup and view all the answers

    Match the sections of a business plan with their descriptions:

    <p>Market Analysis = Study of target market and competition Financials = Detailed breakdown of financial needs and projections Management and Operations = Overview of team structure and business processes Marketing and Sales Plan = Strategies for acquiring and retaining customers</p> Signup and view all the answers

    Which financial document outlines expected revenues and expenses?

    <p>Profit and Loss Statements</p> Signup and view all the answers

    SBDC consultants can provide business plan support at no cost.

    <p>True</p> Signup and view all the answers

    The ______ outlines the anticipated growth and future direction of the business.

    <p>Growth and Development</p> Signup and view all the answers

    Study Notes

    Business Plan Outline

    • A business plan tells a compelling story about the business, goals, market, and funding needs.
    • Plan sections should be interesting to the reader, especially if the plan is for funding.
    • Create a cover sheet and table of contents after drafting the major sections.
    • Every plan should include the following major sections:

    Section 1: Company Introduction and Description

    • Introduce and describe the company, answering questions like:
      • How and why was the company formed?
      • How long has the company been operating?
      • Where is the company located?
      • What is the company's legal structure?
    • Include elements like:
      • Company capabilities
      • Location and operating hours
      • Product/service description
      • Development status (if applicable)
      • Mission, vision, and values
      • Intellectual property (patents, copyrights, etc.)
      • Commercialization strategies (if applicable)
      • SWOT analysis (strengths, weaknesses, opportunities, threats)

    Section 2: Market Analysis

    • Include a wide range of information gathered in earlier planning stages.
    • Consider breaking down the analysis into sections like:

    Industry

    • Describe the industry, explaining how your company will take advantage of opportunities.
    • Demonstrate realistic sales projections by showing industry growth, sales figures, customer numbers, and profit trends.
    • Analyze if any industry segments are growing faster than others and how your company can leverage that.

    Market

    • Describe the primary and secondary markets.
    • Primary market: customers who frequently purchase at high volumes
    • Secondary market: customers who purchase less frequently.
    • Describe the primary markets in terms of attributes, demographics, and buying behavior.
    • Explain how the product/service addresses their needs/problems.
    • Estimate the size of target markets (number of customers and spending potential), and predict growth rates.

    Customers

    • Describe the ideal customer, including attributes and demographics.
    • Explain how the selling approach will appeal to those customer segments.

    Competition

    • Describe the competitive landscape (direct and indirect competitors).
    • Answer questions like:
      • How much of the market do competitors hold?
      • Who has the largest market share, and what are their strengths and weaknesses?
      • What gives the company a competitive advantage?
    • Include competitor analysis (strengths, weaknesses, market share).

    Section 3: Management and Operations

    • Focus on how the business will be operated.
    • Include details about:
      • Customer satisfaction
      • Staff roles and responsibilities
      • Company growth strategy
    • Key areas within the management and operations plan include:
      • Human resources
      • Operations, including processes, decision-making procedures, and customer satisfaction.
      • Growth and development plans.

    Section 4: Financials

    • Outline the financial goals, projections, and funding sources.
    • Include:
      • Startup costs, monthly operating expenses.
      • Sales estimates and revenue projections.
      • Break-even analysis to determine required sales for profitability.
      • Monthly cash flow projections (for 3-5 years).
      • Financial assumptions and explanations.
      • Profit and loss statements (if applicable).
    • Provide prior financing information (if applicable).
    • Describe financial need and how to meet those needs (loans, investments, personal contributions).
    • Outline exit strategy.

    Section 5: Appendices

    • Include supporting documents not fitting neatly into other sections.
    • Examples:
      • Resumes of individuals mentioned
      • Owner information
      • Income tax forms
      • Letters of recommendation
      • Purchase orders
      • Market research
      • Site plans
      • Contracts
      • Other supporting documents.

    Final Touches:

    • Include financial goals, projections, and funding sources (monthly costs, fixed vs. variable).
    • Detail how many products/services need to be sold to break even or make a profit.
    • Include a cover page with business details (name, contact info, logo, website).
    • Include an executive summary that provides a high-level overview of the plan, including the primary purpose.
    • Include a table of contents with page numbers for easy navigation.

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    Michigan SBDC Business Plan Outline PDF

    Description

    Test your knowledge on crafting a business plan with this quiz. It covers essential sections like company introduction, market analysis, and funding strategies. Perfect for aspiring entrepreneurs and business students alike!

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