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Try to answer these 20+ Business Plan MCQs and check your understanding of the Business Plan subject. Scroll down and let's begin!

1: Balance sheet is a financial document that shows the _____ for a business.

A.   Assets

B.   Liabilities

C.   Owner’s equity

D.   All of them

2: Business plan is a document describing a business that is used to test the _____ of a business idea, to raise capital, and to serve as a road map for future operations.

A.   Feasibility

B.   Impossibility

C.   Impracticability

3: Business plan is a document describing a business that is used to test the feasibility of a business idea _____ as a road map for future operations.

A.   To raise capital, and to serve

B.   To decrease capital, and to serve

C.   To demote capital, and to serve

D.   Both b and c

4: Cash flow statement is a financial document that shows :

A.   Amount of money on hand

B.   Receipts coming into the business

C.   Money going out of the business

5: _____ is a financial document that shows the amount of money a business has on hand at the beginning of a time period.

A.   Cash flow Statement

B.   Profit-and-Loss Statement

C.   Disclosure Statements

D.   None of them

6: Executive summary is a condensed abstract of a business plan used to ?

A.   Spark reader’s interest

B.   Highlight crucial information

C.   Purpose of report

7: Feasibility Study is a tool for assessing parts of the business plan and determining if the idea will work.

A.   Business plans

B.   Determining if the idea works

C.   Scheduling considerations

8: _____ is a financial document that shows sales revenues, expenses, and net profit or loss.

9: profit-and-loss statement is a financial document that shows .

A.   Sales revenues

B.   Expenses

C.   Net profit or loss

D.   All of the above

10: Sources and uses of funds is a _____ used by start-up businesses that shows where capital comes from and what it will be used for.

A.   Financial document

B.   Transactionals documents

C.   Public documents

D.   Consumer documents

11: In the business model canvas, a value proposition identifies ______.

A.   Who the most important customers are

B.   A customer problem and solution for the business

C.   The key resources needed for the business

D.   Valuable partners for the business

12: What is the purpose of the business model canvas?

A.   To test hypotheses about a new business idea

B.   To create a feedback loop with the customer

C.   To develop a preliminary cash flow statement

D.   To market test the new business idea

13: When an investor reviews a management team, what are they typically looking for?

A.   A group of entrepreneurs with very similar backgrounds.

B.   A team of people who gets along well.

C.   A team with complementary skills and experience.

D.   A team of good financial managers.

14: What statement best describes the lean start-up approach to starting a business?

A.   Make do with as little resources as possible in order to minimize debt.

B.   Produce a product as quickly as possible and get customer feedback in order to redesign the product.

C.   Get the business up and running as quickly as possible in order to start generating revenues.

D.   Try to reach profitability as quickly as possible with as few products as possible.

15: Which statement best describes why entrepreneurs conduct a feasibility analysis?

A.   To gather competitive intelligence for the new business

B.   To match the customer needs and the new business product

C.   To match the customer needs and the new business product

D.   To decide whether the new business is viable

16: An investor can determine ______ from the cash flow statement.

A.   The timing for when the business collects payment

B.   How long it takes the products to sell

C.   How many customers the business has

D.   The amount of total debt the business has

17: What impression does an investor get from a business plan that is overly optimistic?

A.   That the business cannot fail

B.   That the entrepreneur did not do his/her homework

C.   That the assumptions are correct

D.   There are no risks to backing this business

18: A business model identifies ______.

A.   Sources of revenues

B.   Capital requirements

C.   Customer segments

D.   Potential investors

19: Who is the executive summary directed towards?

A.   Potential customers

B.   Potential investors

C.   Potential employees

D.   Potential consultants

20: What critical information does the break-even analysis provide?

A.   The price of your product you should charge to cover the costs.

B.   The price of your product you should charge to cover the costs.

C.   Whether there is a demand for your product.

D.   The cost structure of developing and manufacturing your product.

21: What makes a business pitch compelling?

A.   Selling that you are the right person with the right idea.

B.   Focusing on the innovativeness of the product.

C.   Having a set format for you pitch.

D.   Explaining in detail the financials of the business.

22: A(n) ______ is a two-sentence summary that explains your business quickly.

A.   Executive summary

B.   Cover page

C.   Abstract

D.   Elevator pitch

23: An investor can determine ______ from the profit-and-loss statement.

A.   The gross margin of the products

B.   The amount of debt the business has

C.   The capital needed for start-up

D.   The amount of cash on hand at the end of the month

24: What is the purpose of a business plan?

A.   To calculate the cash flow of the business

B.   To help find customers for the business

C.   To test the feasibility of the business

D.   To assess the competition of the business

25: What financial information is in a balance sheet?

A.   Assets and liabilities of the business

B.   Start-up costs of the business

C.   Information about capital and how it will be used

D.   Money that enters and exits a business

26: Process choice is _________ driven.

A.   Demand

B.   Operations

C.   Marketing

D.   Process

E.   Capacity

27: Product design and process selection are examples of _______ decisions.

A.   Financial

B.   Tactical

C.   System design

D.   System operation

E.   Forecasting

28: Production creates _______ utility.

A.   Place

B.   Time

C.   Form

D.   Possession

29: Products that are returned make up what is called the __________.

A.   Reorder fulfillment.

B.   Return logistics.

C.   Backflow

D.   Reverse supply chain

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, how often should a business plan be updated, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

A business plan is a document that details a company's goals and how it intends to achieve them. Business plans can be of benefit to both startups and well-established companies. For startups, a business plan can be essential for winning over potential lenders and investors. Established businesses can find one useful for staying on track and not losing sight of their goals. This article explains what an effective business plan needs to include and how to write one.

Key Takeaways

• A business plan is a document describing a company's business activities and how it plans to achieve its goals.
• Startup companies use business plans to get off the ground and attract outside investors.
• For established companies, a business plan can help keep the executive team focused on and working toward the company's short- and long-term objectives.
• There is no single format that a business plan must follow, but there are certain key elements that most companies will want to include.

Investopedia / Ryan Oakley

Any new business should have a business plan in place prior to beginning operations. In fact, banks and venture capital firms often want to see a business plan before they'll consider making a loan or providing capital to new businesses.

Even if a business isn't looking to raise additional money, a business plan can help it focus on its goals. A 2017 Harvard Business Review article reported that, "Entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs."

Ideally, a business plan should be reviewed and updated periodically to reflect any goals that have been achieved or that may have changed. An established business that has decided to move in a new direction might create an entirely new business plan for itself.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. These include being able to think through ideas before investing too much money in them and highlighting any potential obstacles to success. A company might also share its business plan with trusted outsiders to get their objective feedback. In addition, a business plan can help keep a company's executive team on the same page about strategic action items and priorities.

Business plans, even among competitors in the same industry, are rarely identical. However, they often have some of the same basic elements, as we describe below.

While it's a good idea to provide as much detail as necessary, it's also important that a business plan be concise enough to hold a reader's attention to the end.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, it's best to fit the basic information into a 15- to 25-page document. Other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and attached as appendices.

These are some of the most common elements in many business plans:

• Executive summary: This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services: Here, the company should describe the products and services it offers or plans to introduce. That might include details on pricing, product lifespan, and unique benefits to the consumer. Other factors that could go into this section include production and manufacturing processes, any relevant patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
• Market analysis: A company needs to have a good handle on the current state of its industry and the existing competition. This section should explain where the company fits in, what types of customers it plans to target, and how easy or difficult it may be to take market share from incumbents.
• Marketing strategy: This section can describe how the company plans to attract and keep customers, including any anticipated advertising and marketing campaigns. It should also describe the distribution channel or channels it will use to get its products or services to consumers.
• Financial plans and projections: Established businesses can include financial statements, balance sheets, and other relevant financial information. New businesses can provide financial targets and estimates for the first few years. Your plan might also include any funding requests you're making.

The best business plans aren't generic ones created from easily accessed templates. A company should aim to entice readers with a plan that demonstrates its uniqueness and potential for success.

2 Types of Business Plans

Business plans can take many forms, but they are sometimes divided into two basic categories: traditional and lean startup. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These plans tend to be much longer than lean startup plans and contain considerably more detail. As a result they require more work on the part of the business, but they can also be more persuasive (and reassuring) to potential investors.
• Lean startup business plans : These use an abbreviated structure that highlights key elements. These business plans are short—as short as one page—and provide only the most basic detail. If a company wants to use this kind of plan, it should be prepared to provide more detail if an investor or a lender requests it.

Why Do Business Plans Fail?

A business plan is not a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections to begin with. Markets and the overall economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All of this calls for building some flexibility into your plan, so you can pivot to a new course if needed.

How frequently a business plan needs to be revised will depend on the nature of the business. A well-established business might want to review its plan once a year and make changes if necessary. A new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is an option when a company prefers to give a quick explanation of its business. For example, a brand-new company may feel that it doesn't have a lot of information to provide yet.

Sections can include: a value proposition ; the company's major activities and advantages; resources such as staff, intellectual property, and capital; a list of partnerships; customer segments; and revenue sources.

A business plan can be useful to companies of all kinds. But as a company grows and the world around it changes, so too should its business plan. So don't think of your business plan as carved in granite but as a living document designed to evolve with your business.

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

U.S. Small Business Administration. " Write Your Business Plan ."

• How to Start a Business: A Comprehensive Guide and Essential Steps 1 of 25
• How to Do Market Research, Types, and Example 2 of 25
• Marketing Strategy: What It Is, How It Works, and How to Create One 3 of 25
• Marketing in Business: Strategies and Types Explained 4 of 25
• What Is a Marketing Plan? Types and How to Write One 5 of 25
• Business Development: Definition, Strategies, Steps & Skills 6 of 25
• Business Plan: What It Is, What's Included, and How to Write One 7 of 25
• Small Business Development Center (SBDC): Meaning, Types, Impact 8 of 25
• How to Write a Business Plan for a Loan 9 of 25
• Business Startup Costs: It’s in the Details 10 of 25
• Startup Capital Definition, Types, and Risks 11 of 25
• Bootstrapping Definition, Strategies, and Pros/Cons 12 of 25
• Crowdfunding: What It Is, How It Works, and Popular Websites 13 of 25
• Starting a Business with No Money: How to Begin 14 of 25
• A Comprehensive Guide to Establishing Business Credit 15 of 25
• Equity Financing: What It Is, How It Works, Pros and Cons 16 of 25
• Best Startup Business Loans 17 of 25
• Sole Proprietorship: What It Is, Pros and Cons, and Differences From an LLC 18 of 25
• Partnership: Definition, How It Works, Taxation, and Types 19 of 25
• What Is an LLC? Limited Liability Company Structure and Benefits Defined 20 of 25
• Corporation: What It Is and How to Form One 21 of 25
• Starting a Small Business: Your Complete How-to Guide 22 of 25
• Starting an Online Business: A Step-by-Step Guide 23 of 25
• How to Start Your Own Bookkeeping Business: Essential Tips 24 of 25
• How to Start a Successful Dropshipping Business: A Comprehensive Guide 25 of 25

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11.4 The Business Plan

Learning objectives.

By the end of this section, you will be able to:

• Describe the different purposes of a business plan
• Describe and develop the components of a brief business plan
• Describe and develop the components of a full business plan

Unlike the brief or lean formats introduced so far, the business plan is a formal document used for the long-range planning of a company’s operation. It typically includes background information, financial information, and a summary of the business. Investors nearly always request a formal business plan because it is an integral part of their evaluation of whether to invest in a company. Although nothing in business is permanent, a business plan typically has components that are more “set in stone” than a business model canvas , which is more commonly used as a first step in the planning process and throughout the early stages of a nascent business. A business plan is likely to describe the business and industry, market strategies, sales potential, and competitive analysis, as well as the company’s long-term goals and objectives. An in-depth formal business plan would follow at later stages after various iterations to business model canvases. The business plan usually projects financial data over a three-year period and is typically required by banks or other investors to secure funding. The business plan is a roadmap for the company to follow over multiple years.

Some entrepreneurs prefer to use the canvas process instead of the business plan, whereas others use a shorter version of the business plan, submitting it to investors after several iterations. There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup . 48 His version is basically an extension of a napkin sketch without the detail of a full business plan. As you progress, you can also consider a brief business plan (about two pages)—if you want to support a rapid business launch—and/or a standard business plan.

As with many aspects of entrepreneurship, there are no clear hard and fast rules to achieving entrepreneurial success. You may encounter different people who want different things (canvas, summary, full business plan), and you also have flexibility in following whatever tool works best for you. Like the canvas, the various versions of the business plan are tools that will aid you in your entrepreneurial endeavor.

Business Plan Overview

Most business plans have several distinct sections ( Figure 11.16 ). The business plan can range from a few pages to twenty-five pages or more, depending on the purpose and the intended audience. For our discussion, we’ll describe a brief business plan and a standard business plan. If you are able to successfully design a business model canvas, then you will have the structure for developing a clear business plan that you can submit for financial consideration.

Both types of business plans aim at providing a picture and roadmap to follow from conception to creation. If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept.

The full business plan is aimed at executing the vision concept, dealing with the proverbial devil in the details. Developing a full business plan will assist those of you who need a more detailed and structured roadmap, or those of you with little to no background in business. The business planning process includes the business model, a feasibility analysis, and a full business plan, which we will discuss later in this section. Next, we explore how a business plan can meet several different needs.

Purposes of a Business Plan

A business plan can serve many different purposes—some internal, others external. As we discussed previously, you can use a business plan as an internal early planning device, an extension of a napkin sketch, and as a follow-up to one of the canvas tools. A business plan can be an organizational roadmap , that is, an internal planning tool and working plan that you can apply to your business in order to reach your desired goals over the course of several years. The business plan should be written by the owners of the venture, since it forces a firsthand examination of the business operations and allows them to focus on areas that need improvement.

Refer to the business venture throughout the document. Generally speaking, a business plan should not be written in the first person.

A major external purpose for the business plan is as an investment tool that outlines financial projections, becoming a document designed to attract investors. In many instances, a business plan can complement a formal investor’s pitch. In this context, the business plan is a presentation plan, intended for an outside audience that may or may not be familiar with your industry, your business, and your competitors.

You can also use your business plan as a contingency plan by outlining some “what-if” scenarios and exploring how you might respond if these scenarios unfold. Pretty Young Professional launched in November 2010 as an online resource to guide an emerging generation of female leaders. The site focused on recent female college graduates and current students searching for professional roles and those in their first professional roles. It was founded by four friends who were coworkers at the global consultancy firm McKinsey. But after positions and equity were decided among them, fundamental differences of opinion about the direction of the business emerged between two factions, according to the cofounder and former CEO Kathryn Minshew . “I think, naively, we assumed that if we kicked the can down the road on some of those things, we’d be able to sort them out,” Minshew said. Minshew went on to found a different professional site, The Muse , and took much of the editorial team of Pretty Young Professional with her. 49 Whereas greater planning potentially could have prevented the early demise of Pretty Young Professional, a change in planning led to overnight success for Joshua Esnard and The Cut Buddy team. Esnard invented and patented the plastic hair template that he was selling online out of his Fort Lauderdale garage while working a full-time job at Broward College and running a side business. Esnard had hundreds of boxes of Cut Buddies sitting in his home when he changed his marketing plan to enlist companies specializing in making videos go viral. It worked so well that a promotional video for the product garnered 8 million views in hours. The Cut Buddy sold over 4,000 products in a few hours when Esnard only had hundreds remaining. Demand greatly exceeded his supply, so Esnard had to scramble to increase manufacturing and offered customers two-for-one deals to make up for delays. This led to selling 55,000 units, generating $700,000 in sales in 2017. 50 After appearing on Shark Tank and landing a deal with Daymond John that gave the “shark” a 20-percent equity stake in return for $300,000, The Cut Buddy has added new distribution channels to include retail sales along with online commerce. Changing one aspect of a business plan—the marketing plan—yielded success for The Cut Buddy.

Link to Learning

Watch this video of Cut Buddy’s founder, Joshua Esnard, telling his company’s story to learn more.

If you opt for the brief business plan, you will focus primarily on articulating a big-picture overview of your business concept. This version is used to interest potential investors, employees, and other stakeholders, and will include a financial summary “box,” but it must have a disclaimer, and the founder/entrepreneur may need to have the people who receive it sign a nondisclosure agreement (NDA) . The full business plan is aimed at executing the vision concept, providing supporting details, and would be required by financial institutions and others as they formally become stakeholders in the venture. Both are aimed at providing a picture and roadmap to go from conception to creation.

Types of Business Plans

The brief business plan is similar to an extended executive summary from the full business plan. This concise document provides a broad overview of your entrepreneurial concept, your team members, how and why you will execute on your plans, and why you are the ones to do so. You can think of a brief business plan as a scene setter or—since we began this chapter with a film reference—as a trailer to the full movie. The brief business plan is the commercial equivalent to a trailer for Field of Dreams , whereas the full plan is the full-length movie equivalent.

Brief Business Plan or Executive Summary

As the name implies, the brief business plan or executive summary summarizes key elements of the entire business plan, such as the business concept, financial features, and current business position. The executive summary version of the business plan is your opportunity to broadly articulate the overall concept and vision of the company for yourself, for prospective investors, and for current and future employees.

A typical executive summary is generally no longer than a page, but because the brief business plan is essentially an extended executive summary, the executive summary section is vital. This is the “ask” to an investor. You should begin by clearly stating what you are asking for in the summary.

In the business concept phase, you’ll describe the business, its product, and its markets. Describe the customer segment it serves and why your company will hold a competitive advantage. This section may align roughly with the customer segments and value-proposition segments of a canvas.

Next, highlight the important financial features, including sales, profits, cash flows, and return on investment. Like the financial portion of a feasibility analysis, the financial analysis component of a business plan may typically include items like a twelve-month profit and loss projection, a three- or four-year profit and loss projection, a cash-flow projection, a projected balance sheet, and a breakeven calculation. You can explore a feasibility study and financial projections in more depth in the formal business plan. Here, you want to focus on the big picture of your numbers and what they mean.

The current business position section can furnish relevant information about you and your team members and the company at large. This is your opportunity to tell the story of how you formed the company, to describe its legal status (form of operation), and to list the principal players. In one part of the extended executive summary, you can cover your reasons for starting the business: Here is an opportunity to clearly define the needs you think you can meet and perhaps get into the pains and gains of customers. You also can provide a summary of the overall strategic direction in which you intend to take the company. Describe the company’s mission, vision, goals and objectives, overall business model, and value proposition.

Rice University’s Student Business Plan Competition, one of the largest and overall best-regarded graduate school business-plan competitions (see Telling Your Entrepreneurial Story and Pitching the Idea ), requires an executive summary of up to five pages to apply. 51 , 52 Its suggested sections are shown in Table 11.2 .

Are You Ready?

Create a brief business plan.

Fill out a canvas of your choosing for a well-known startup: Uber, Netflix, Dropbox, Etsy, Airbnb, Bird/Lime, Warby Parker, or any of the companies featured throughout this chapter or one of your choice. Then create a brief business plan for that business. See if you can find a version of the company’s actual executive summary, business plan, or canvas. Compare and contrast your vision with what the company has articulated.

• These companies are well established but is there a component of what you charted that you would advise the company to change to ensure future viability?
• Map out a contingency plan for a “what-if” scenario if one key aspect of the company or the environment it operates in were drastically is altered?

Full Business Plan

Even full business plans can vary in length, scale, and scope. Rice University sets a ten-page cap on business plans submitted for the full competition. The IndUS Entrepreneurs , one of the largest global networks of entrepreneurs, also holds business plan competitions for students through its Tie Young Entrepreneurs program. In contrast, business plans submitted for that competition can usually be up to twenty-five pages. These are just two examples. Some components may differ slightly; common elements are typically found in a formal business plan outline. The next section will provide sample components of a full business plan for a fictional business.

Executive Summary

The executive summary should provide an overview of your business with key points and issues. Because the summary is intended to summarize the entire document, it is most helpful to write this section last, even though it comes first in sequence. The writing in this section should be especially concise. Readers should be able to understand your needs and capabilities at first glance. The section should tell the reader what you want and your “ask” should be explicitly stated in the summary.

Describe your business, its product or service, and the intended customers. Explain what will be sold, who it will be sold to, and what competitive advantages the business has. Table 11.3 shows a sample executive summary for the fictional company La Vida Lola.

Business Description

This section describes the industry, your product, and the business and success factors. It should provide a current outlook as well as future trends and developments. You also should address your company’s mission, vision, goals, and objectives. Summarize your overall strategic direction, your reasons for starting the business, a description of your products and services, your business model, and your company’s value proposition. Consider including the Standard Industrial Classification/North American Industry Classification System (SIC/NAICS) code to specify the industry and insure correct identification. The industry extends beyond where the business is located and operates, and should include national and global dynamics. Table 11.4 shows a sample business description for La Vida Lola.

Industry Analysis and Market Strategies

Here you should define your market in terms of size, structure, growth prospects, trends, and sales potential. You’ll want to include your TAM and forecast the SAM . (Both these terms are discussed in Conducting a Feasibility Analysis .) This is a place to address market segmentation strategies by geography, customer attributes, or product orientation. Describe your positioning relative to your competitors’ in terms of pricing, distribution, promotion plan, and sales potential. Table 11.5 shows an example industry analysis and market strategy for La Vida Lola.

Competitive Analysis

The competitive analysis is a statement of the business strategy as it relates to the competition. You want to be able to identify who are your major competitors and assess what are their market shares, markets served, strategies employed, and expected response to entry? You likely want to conduct a classic SWOT analysis (Strengths Weaknesses Opportunities Threats) and complete a competitive-strength grid or competitive matrix. Outline your company’s competitive strengths relative to those of the competition in regard to product, distribution, pricing, promotion, and advertising. What are your company’s competitive advantages and their likely impacts on its success? The key is to construct it properly for the relevant features/benefits (by weight, according to customers) and how the startup compares to incumbents. The competitive matrix should show clearly how and why the startup has a clear (if not currently measurable) competitive advantage. Some common features in the example include price, benefits, quality, type of features, locations, and distribution/sales. Sample templates are shown in Figure 11.17 and Figure 11.18 . A competitive analysis helps you create a marketing strategy that will identify assets or skills that your competitors are lacking so you can plan to fill those gaps, giving you a distinct competitive advantage. When creating a competitor analysis, it is important to focus on the key features and elements that matter to customers, rather than focusing too heavily on the entrepreneur’s idea and desires.

Operations and Management Plan

In this section, outline how you will manage your company. Describe its organizational structure. Here you can address the form of ownership and, if warranted, include an organizational chart/structure. Highlight the backgrounds, experiences, qualifications, areas of expertise, and roles of members of the management team. This is also the place to mention any other stakeholders, such as a board of directors or advisory board(s), and their relevant relationship to the founder, experience and value to help make the venture successful, and professional service firms providing management support, such as accounting services and legal counsel.

Table 11.6 shows a sample operations and management plan for La Vida Lola.

Marketing Plan

Here you should outline and describe an effective overall marketing strategy for your venture, providing details regarding pricing, promotion, advertising, distribution, media usage, public relations, and a digital presence. Fully describe your sales management plan and the composition of your sales force, along with a comprehensive and detailed budget for the marketing plan. Table 11.7 shows a sample marketing plan for La Vida Lola.

Financial Plan

A financial plan seeks to forecast revenue and expenses; project a financial narrative; and estimate project costs, valuations, and cash flow projections. This section should present an accurate, realistic, and achievable financial plan for your venture (see Entrepreneurial Finance and Accounting for detailed discussions about conducting these projections). Include sales forecasts and income projections, pro forma financial statements ( Building the Entrepreneurial Dream Team , a breakeven analysis, and a capital budget. Identify your possible sources of financing (discussed in Conducting a Feasibility Analysis ). Figure 11.19 shows a template of cash-flow needs for La Vida Lola.

Entrepreneur In Action

Laughing man coffee.

Hugh Jackman ( Figure 11.20 ) may best be known for portraying a comic-book superhero who used his mutant abilities to protect the world from villains. But the Wolverine actor is also working to make the planet a better place for real, not through adamantium claws but through social entrepreneurship.

A love of java jolted Jackman into action in 2009, when he traveled to Ethiopia with a Christian humanitarian group to shoot a documentary about the impact of fair-trade certification on coffee growers there. He decided to launch a business and follow in the footsteps of the late Paul Newman, another famous actor turned philanthropist via food ventures.

Jackman launched Laughing Man Coffee two years later; he sold the line to Keurig in 2015. One Laughing Man Coffee café in New York continues to operate independently, investing its proceeds into charitable programs that support better housing, health, and educational initiatives within fair-trade farming communities. 55 Although the New York location is the only café, the coffee brand is still distributed, with Keurig donating an undisclosed portion of Laughing Man proceeds to those causes (whereas Jackman donates all his profits). The company initially donated its profits to World Vision, the Christian humanitarian group Jackman accompanied in 2009. In 2017, it created the Laughing Man Foundation to be more active with its money management and distribution.

• You be the entrepreneur. If you were Jackman, would you have sold the company to Keurig? Why or why not?
• Would you have started the Laughing Man Foundation?
• What else can Jackman do to aid fair-trade practices for coffee growers?

What Can You Do?

Textbooks for change.

Founded in 2014, Textbooks for Change uses a cross-compensation model, in which one customer segment pays for a product or service, and the profit from that revenue is used to provide the same product or service to another, underserved segment. Textbooks for Change partners with student organizations to collect used college textbooks, some of which are re-sold while others are donated to students in need at underserved universities across the globe. The organization has reused or recycled 250,000 textbooks, providing 220,000 students with access through seven campus partners in East Africa. This B-corp social enterprise tackles a problem and offers a solution that is directly relevant to college students like yourself. Have you observed a problem on your college campus or other campuses that is not being served properly? Could it result in a social enterprise?

Work It Out

Franchisee set out.

A franchisee of East Coast Wings, a chain with dozens of restaurants in the United States, has decided to part ways with the chain. The new store will feature the same basic sports-bar-and-restaurant concept and serve the same basic foods: chicken wings, burgers, sandwiches, and the like. The new restaurant can’t rely on the same distributors and suppliers. A new business plan is needed.

• What steps should the new restaurant take to create a new business plan?
• Should it attempt to serve the same customers? Why or why not?

This New York Times video, “An Unlikely Business Plan,” describes entrepreneurial resurgence in Detroit, Michigan.

• 48 Chris Guillebeau. The $100 Startup: Reinvent the Way You Make a Living, Do What You Love, and Create a New Future . New York: Crown Business/Random House, 2012.
• 49 Jonathan Chan. “What These 4 Startup Case Studies Can Teach You about Failure.” Foundr.com . July 12, 2015. https://foundr.com/4-startup-case-studies-failure/
• 50 Amy Feldman. “Inventor of the Cut Buddy Paid YouTubers to Spark Sales. He Wasn’t Ready for a Video to Go Viral.” Forbes. February 15, 2017. https://www.forbes.com/sites/forbestreptalks/2017/02/15/inventor-of-the-cut-buddy-paid-youtubers-to-spark-sales-he-wasnt-ready-for-a-video-to-go-viral/#3eb540ce798a
• 51 Jennifer Post. “National Business Plan Competitions for Entrepreneurs.” Business News Daily . August 30, 2018. https://www.businessnewsdaily.com/6902-business-plan-competitions-entrepreneurs.html
• 52 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition . March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf
• 53 “Rice Business Plan Competition, Eligibility Criteria and How to Apply.” Rice Business Plan Competition. March 2020. https://rbpc.rice.edu/sites/g/files/bxs806/f/2020%20RBPC%20Eligibility%20Criteria%20and%20How%20to%20Apply_23Oct19.pdf; Based on 2019 RBPC Competition Rules and Format April 4–6, 2019. https://rbpc.rice.edu/sites/g/files/bxs806/f/2019-RBPC-Competition-Rules%20-Format.pdf
• 54 Foodstart. http://foodstart.com
• 55 “Hugh Jackman Journey to Starting a Social Enterprise Coffee Company.” Giving Compass. April 8, 2018. https://givingcompass.org/article/hugh-jackman-journey-to-starting-a-social-enterprise-coffee-company/

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Access for free at https://openstax.org/books/entrepreneurship/pages/1-introduction

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135 Business Plan Questions

Embarking on the business journey of your dreams begins with a robust business plan. This plan is not just a document—it’s the roadmap to your success, painting a clear picture of where you’re headed and how you plan to get there.

Whether you’re a seasoned entrepreneur or a hopeful startup pioneer, the questions I’ve compiled are designed as your compass, guiding you through the intricate landscape of business strategy.

From your executive summary to the details of your financial projections, each question serves to dig deep into the essence of your vision, solidifying your plan with precision and care.

Table of Contents

Executive Summary

• What is the core mission of your business?
• How would you describe your company’s business model in simple terms?
• What unique problem does your business solve for its customers?
• What are the short-term and long-term goals of the company?
• Who are the intended clients or customers of your business?
• What is the vision statement for your business?
• Who are the founders and key team members, and what are their roles?
• How does your company set itself apart from the competition?
• What are the main achievements or milestones of your business to date?
• What key opportunities do you see in the market?
• How much funding are you seeking, and how will it be used?
• What are the main products or services your company offers?
• What is the current stage of your business (concept, start-up, growth)?
• How do you see your company evolving in the next five years?
• Can you summarize the financial outlook and projections for your company?

Company Description Considerations

• What is the legal structure of your business (e.g., sole proprietorship, LLC, corporation)?
• How did the idea for the business originate, and how has it been developed?
• Who are the target customers, and why will they choose your business?
• What are the key elements of your business’s operations?
• What are the specific advantages of your location or facilities, if any?
• How does your company’s history and background set it up for success?
• What business sector or industry does your company fall under?
• How does your company contribute to the economy and community?
• What partnerships or collaborations are essential to your business?
• What are the core values and culture of your company?
• How does your business respond to changes in the market?
• What relevant certifications, licenses, or permits does your business hold?
• What are the main risks and challenges your business faces?
• What role does sustainability play in your company’s operations?
• How does diversity and inclusion manifest in your company?

Market Analysis

• Who is your primary target market, and what are their defining characteristics?
• How large is the target market, and what is its projected growth?
• What are the trends and themes currently shaping your target market?
• Who are your top competitors, and what are their strengths and weaknesses?
• What is your market share, or what market share do you project to capture?
• How do your target customers make their purchasing decisions?
• What factors influence the demand for your products or services?
• What barriers to entry exist in your market, and how can they be overcome?
• How does pricing play a role in your market position?
• What is your value proposition to customers in comparison to competitors?
• How might technology impact your market in the future?
• What are the legal or regulatory factors affecting your market?
• How have external factors like the economy affected your market historically?
• How does geography affect your market and business model?
• What are the risks associated with your target market?

Organization and Management Structure

• Who comprises the leadership team, and what are their backgrounds?
• What is the organizational structure of your business?
• How will your management team help achieve the business’s goals?
• What gaps exist in your current team, and how do you plan to fill them?
• What are the roles and responsibilities of your management team members?
• How does the management structure align with your business strategy?
• How does your team make decisions and communicate internally?
• What systems are in place for performance management and accountability?
• What is your plan for recruiting and retaining skilled employees?
• How do you approach leadership development and training?
• How does the current team’s expertise align with the business goals?
• What are the board of directors’ roles, if applicable?
• How do you plan to create a productive company culture?
• What external advisors or consultants does the business use, and why?
• How have you planned for succession in key management roles?

Service or Product Line Inquiry

• What are the main products or services your business offers?
• How do these products or services fulfill customer needs?
• What is unique about your products or services?
• How does product/service quality compare to competitors?
• What is the lifecycle of your products or services?
• How is your product or service produced or delivered?
• Are there any patents, copyrights, or trademarks involved?
• What research and development activities are you pursuing?
• How do you plan to expand your product or service range?
• What customer feedback have you received about your product or service?
• How does your product or service adapt to changes in the market?
• What is the pricing strategy for your products or services?
• How does your product or service contribute to your brand image?
• What are the future plans for developing your product or service?
• How do warranty or guarantee terms play into your offering?

Marketing and Sales Strategies

• What marketing channels will you use to reach your target audience?
• How will you position your company within the market?
• What promotional strategies will you utilize to attract customers?
• What is your sales forecast for the first year and beyond?
• How will you set sales targets and measure success?
• What sales tactics will you employ to enhance customer acquisition?
• How will your marketing and sales strategies evolve as the business grows?
• What is your approach to online and social media marketing?
• What customer relationship management processes will you put in place?
• How do you plan to establish your brand identity?
• What partnerships or sponsorships will you leverage to enhance marketing?
• What are your strategies for repeat business and customer loyalty?
• What is your process for tracking marketing ROI?
• How do customer service and support fit into your sales strategy?
• How does your marketing strategy cater to different customer segments?

Funding Request Fundamentals

• How much total funding is required to reach your business objectives?
• What specific purposes will the funding be used for?
• What is your proposed timeline for the utilization of funds?
• What types of funding (e.g., equity, loan) are you pursuing?
• How will investors or lenders get a return on their investment?
• What is the current financial position of the business?
• How much equity are you willing to exchange for investment?
• What are the key financial milestones that the funding will help achieve?
• What are the terms you’re seeking for any loans?
• How do you plan to manage cash flow and ensure financial stability?
• What collateral, if any, are you offering to back up your funding request?
• How does the funding impact your business’s financial projections?
• What is the exit strategy for investors?
• How will additional funding influence your strategic business decisions?
• What contingencies do you have in place if you don’t secure the expected funding?

Financial Projections and Feasibility

• What are your financial forecasts for the next three to five years?
• How did you arrive at your revenue and expense estimates?
• What are the key assumptions underlying your financial projections?
• What are the projected cash flow statements for the next few years?
• What is your break-even analysis showing?
• What are your strategies for maintaining a healthy profit margin?
• How do you plan to monitor and manage financial risks?
• What is your approach to pricing and cost control?
• How will you balance reinvestment in the business with profitability?
• What financial metrics will you use to gauge business performance?
• How will you handle unexpected financial shortfalls or emergencies?
• What is your strategy for financial record-keeping and accounting?
• How do customer payment terms and cycles affect your cash flow?
• What financial software or tools do you use for projections?
• How will financial trends and economic conditions potentially impact your projections?

Appendix and Supporting Documents

• What supporting documents will you include in the appendix?
• How will these documents reinforce your business plan’s credibility?
• What resumes or biographies of your team members will you present?
• What legal documents are relevant to include (e.g., licenses, permits)?
• How can we access extensive market studies mentioned in the plan?
• What are your key technical product specifications or service descriptions?
• How do your financial statements and accounting documents get audited?
• What testimonials or case studies from customers can you showcase?
• What press coverage or media mentions has your business received?
• Can you provide industry endorsements or expert opinions?
• How will technology prototypes or demos be made available for review?
• What are your policies and procedures manuals like?
• How do your charts, graphs, and tables support your plan’s data?
• What correspondence or contracts with suppliers/partners are appropriate to include?
• How does your intellectual property documentation reflect on your business’s value?

Frequently Asked Questions

Can i write a business plan myself, or should i hire a professional.

Writing a business plan yourself is possible, especially with the aid of specific questions that cover all business aspects. However, hiring a professional can provide expertise and a polished result, particularly if you seek significant funding.

How often should I update my business plan?

Regular updates are crucial—annually at minimum or more often if your business is rapidly changing. This keeps your business plan relevant and useful as a dynamic, guiding document.

What’s the most critical part of a business plan?

While all sections are important, the Executive Summary is critical as it’s often the first (and sometimes only) part read by potential investors or partners. Clear and compelling financial projections are also vital for potential funders.

Final Thoughts

As your blueprint comes together, remember that the strength of your business plan lies in its details and its ability to represent the vision and practicalities of your enterprise honestly.

The questions outlined will challenge you to think critically, anticipate future hurdles, and prepare for success. With these comprehensive inquiries as your cornerstone, you can turn your business from a dream into an actionable, thriving reality.

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Market Research

Cashflow forecasting, cash flow forecast.

Business planning mcq

15 questions

Introducing new   Paper mode

No student devices needed.   Know more

Which of the following is an advantage to a new business start-up of producing a business

It will guarantee survival

It will help test financial viability

It will ensure sales targets are met

It will not need to be referred to again by the business owner

In which section of the business plan would you expect to find details about market size

and market research?

Objectives and key targets

Cash flow forecast

Market overview

Forecast revenue, costs and profit

Which of the following best describes a business plan? A written document that describes:

The business, its objectives, strategies, financial forecasts and market

The marketing plan of the business

The objectives and key targets of the business

How the business will produce its products

Which of the following is the formula for total costs?

Total costs minus total variable costs

Total fixed costs plus total variable costs

Total costs plus total variable costs

Total fixed costs minus total variable costs 5

Which of the following is a drawback of business planning?

Reduces risk by providing a guide for the business

The plan will need to be constantly updated

It will help to secure any finance required

Allows the business to review its progress

Which of the following best defines the term variable cost? A cost which:

Stays the same regardless of output

Changes according to output

Changes with time

Changes according to revenue

An existing business may use a business plan to:

Focus on the business idea before start-up

Present to shareholders at the AGM

Secure external finance for business expansion

To share with employees in the business 5

A business makes a profit when:

Total revenue is greater than total costs

Total revenue is less than total fixed costs

Total revenue is greater than total variable costs

Total revenue is less than total costs

Which of the following is a functional area of a business?

Outsourcing

Selling price x quantity is the formula for which of the following?

Total costs

Variable costs

A business sells 12,000 units per year. Fixed costs per year are £50,000 and variable costs

are £2.50 per unit. The business’s total costs are:

Which of the following is a major problem that an entrepreneur might encounter when

writing a business plan for the first time?

To explain the business idea and where it came from

Forecasting product sales accurately

To include details about the owners

To find an appropriate format to present the plan

Which of the following defines the term revenue?

The money the business makes after total costs are deducted

The money the business makes after variable costs are deducted

The money the business makes from selling its goods or services

The money the business makes after fixed costs are deducted

Details regarding how many staff the business will need to employ, their pay rates and job

descriptions would be found in which section of a business plan?

Human resources

The fixed costs of a business are £300,000 per year and variable costs are £2.00 per unit.

The business sells 200,000 units per year at a selling price of £5.00. The profit made per

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House Republicans want to raise the Social Security age. It could hurt those who 'work their whole lives and die sooner,' the agency's head says.

• House Republicans proposed raising the age for receiving Social Security benefits.
• Social Security benefits are already facing funding issues over the next decade.
• The proposed change has sparked criticism from both Democrats and some Republicans.

House Republicans have a plan to raise the age at which Americans receive Social Security benefits — and the agency's leader isn't on board.

Earlier this week, the Republican Study Committee unveiled their fiscal year 2025 budget proposal — called Fiscal Sanity to Save America — which consisted of nearly 200 pages of funding priorities for key issues, including taxes , higher education , and healthcare.

The budget also addressed an issue that has long been contentious across both parties: Social Security. According to the proposal, the committee wants to "make modest adjustments to the retirement age for future retirees to account for increases in life expectancy." The proposal did not specify the exact age they're eyeing for Americans to receive their benefits, but it would likely be above the current threshold of 67 years old.

The committee's chairman Kevin Hern emphasized in the budget that "we cannot be clearer: we WILL NOT adjust or delay retirement benefits for any senior in or near retirement."

Still, the proposal has some administration officials concerned for future retirees. During a House Ways and Means Committee hearing on Thursday, Social Security Commissioner Martin O'Malley said that "we have to be mindful of people who really do hard work, hard labor, their whole lives, and who die sooner than those of us who are privileged enough to do work that is not as taxing on our bodies and our physical well-being."

Related stories

Full Social Security benefits are already in jeopardy over the next decade. In March 2023, the Social Security and Medicare Board of Trustees estimated that the Old-Age and Survivors Insurance (OASI) Trust Fund might only be able to pay out full benefits over the next decade, which is earlier than anticipated.

"My dad had an expression, 'Don't tell me what you value. Show me your budget, and I'll tell you what you value.' The Republican Study Committee budget shows what Republicans value," President Biden said in a statement on the RSC budget. "This extreme budget will cut Medicare, Social Security, and the Affordable Care Act. It endorses a national abortion ban. The Republican budget will raise housing costs and prescription drugs costs for families. And it will shower giveaways on the wealthy and biggest corporations. Let me be clear: I will stop them."

Even some Republican lawmakers have been critical of the House's budget proposal. GOP Sen. Josh Hawley called the plan "the stupidest thing I ever heard," according to The Hill, and GOP Sen. Mitt Romney warned his House colleagues of the consequences of putting forth this plan during an election year.

"Talk about a gift to the Democrats," Romney said . "Seems like people have lost their political ear if they think any adjustments to the benefits of Social Security makes sense to talk about at any time, let alone during an election year."

Retirement is already looking bleak for some seniors, who are facing lower incomes and high healthcare and housing costs . A little over half of Americans over the age of 65 are earning under $30,000 a year, according to Census Bureau's Current Population Survey . And for many Americans, Social Security is a financial lifeline in their later years. Among typical retirees , just under 80% say Social Security is a source of income — a far greater share than retirement savings or wages.

Biden said that his "budget represents a different future," one where "we protect Social Security so the working people who built this country can retire with dignity."

"I see a future for all Americans and I will never stop fighting for that future," he said.

Watch: Surprising misconceptions about Trump and Biden ahead of the 2024 election

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