Chapter 1: The Plan

Question 1

What are the top reasons businesses fail?

Answer 1

1. Poor Sales
2. Competitive Weakness
3. High Operating Expenses
4. Difficulty collecting on invoices
5. Inventory Problems
6. Too many fixed assets
7. Poor location
8. Fraud

Poor planning and management are overriding factors in business failure

Question 2

What is an entrepreneur?

Answer 2

A person engaged in strategic activies that involve the initiation and development of a new business, created to build long-term value

Question 3

Qualities of a successful business plan include:

Answer 3

A business plan should be a living document that changes as your business and the market changes.

Question 4

What are the 3 key functions of a business plan?

Answer 4

1. Planning tool
2. Loan or Investor document
3. Benchmarking tool

Question 5

What are the key elements of a business plan?

Answer 5

1. Cover page
2. Executive Summary (highlights)
3. Company SUmmary (vision, legal structure)
4. Products/Services
5. Market Analysis
6. Marketing Strategy (uniqueness/competitive advantages)
7. Financial Plan

Question 6

What are some guidelines to follow within a business plan to avoid pitfalls?

Answer 6

• Assumptions are realistic
• Keep language simple
• Cover the risks and opportunities
• Analyze competition thoroughly