business plan is like road map to success mcq

Business Plan MCQs

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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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20 Business Plan Quiz Questions and Answers

A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a business venture. It serves as a roadmap for entrepreneurs and stakeholders to understand the direction and viability of the business. Here’s an overview of the key components typically included in a business plan:

Executive Summary: This section provides a concise overview of the entire business plan. It highlights the company’s mission, vision, key objectives, and a summary of the proposed business model.

Company Description: Here, you’ll provide a detailed explanation of your business concept. Include the type of business, its legal structure, location, target market, and any unique selling propositions that set your business apart.

Market Analysis: Conduct thorough market research to understand your industry, target market, and competitors. Identify trends, potential opportunities, and challenges. Explain how your product or service will meet the needs of your target audience better than existing solutions.

Organization and Management: Describe the organizational structure of your business, including key team members, their roles, and relevant experience. Investors want to know that you have a capable team driving the venture.

Article overview

Part 1: 30 business plan quiz questions & answers.

1. Question: What is the primary purpose of a business plan? a) Secure funding b) Improve employee morale c) Enhance customer service d) Increase market competition Answer: a) Secure funding

2. Question: Which section of a business plan outlines the company’s mission and vision? a) Marketing strategy b) Financial projections c) Executive summary d) Company overview Answer: d) Company overview

3. Question: Which of the following is NOT a common business plan component? a) Competitive analysis b) SWOT analysis c) Cash flow statement d) Social media strategy Answer: d) Social media strategy

4. Question: What is the purpose of conducting a market analysis in a business plan? a) Determine the company’s competitors b) Develop financial projections c) Define the company’s mission d) Set employee goals Answer: a) Determine the company’s competitors

5. Question: Which section of a business plan highlights the company’s unique selling proposition (USP)? a) Marketing strategy b) Company description c) Competitive analysis d) Financial projections Answer: a) Marketing strategy

6. Question: What financial document shows a company’s revenues and expenses over a specific period? a) Balance sheet b) Cash flow statement c) Income statement d) Profit and loss statement Answer: c) Income statement

7. Question: In a business plan, what does ROI stand for? a) Return on Investment b) Revenue on Investment c) Risk of Inflation d) Rate of Interest Answer: a) Return on Investment

8. Question: Which business plan section outlines the marketing tactics to promote a product or service? a) Financial projections b) Market analysis c) Marketing strategy d) Company overview Answer: c) Marketing strategy

9. Question: What is a break-even analysis used for in a business plan? a) Identifying potential customers b) Calculating potential profits c) Determining the point of profitability d) Analyzing competitor strategies Answer: c) Determining the point of profitability

10. Question: In a business plan, what does the term “SWOT” stand for? a) Strengths, Weaknesses, Opportunities, Threats b) Sales, Workforce, Objectives, Technology c) Strategies, Workflow, Operations, Targets d) Success, Wealth, Objectives, Tactics Answer: a) Strengths, Weaknesses, Opportunities, Threats

11. Question: What is the purpose of an executive summary in a business plan? a) Provide an overview of the company’s history b) Detail the company’s long-term objectives c) Summarize the key points of the entire plan d) Highlight the company’s competitive advantages Answer: c) Summarize the key points of the entire plan

12. Question: Which financing option involves giving up ownership shares of a company in exchange for capital? a) Debt financing b) Equity financing c) Venture capital d) Angel investing Answer: b) Equity financing

13. Question: What does the term “KPI” mean in a business context? a) Key Performance Indicator b) Key Profit Increment c) Key Planning and Implementation d) Key Personnel Improvement Answer: a) Key Performance Indicator

14. Question: What section of a business plan should discuss the company’s organizational structure and management team? a) Market analysis b) Financial projections c) Company overview d) Marketing strategy Answer: c) Company overview

15. Question: What type of business plan primarily targets internal decision-making and planning? a) Startup business plan b) Strategic business plan c) Operational business plan d) Feasibility business plan Answer: c) Operational business plan

Part 2: Download business plan questions & answers for free

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16. Question: What external factor analysis tool helps identify the political, economic, social, and technological influences on a business? a) PEST analysis b) SWOT analysis c) BCG matrix d) Porter’s Five Forces Answer: a) PEST analysis

17. Question: Which statement best describes a vision statement in a business plan? a) Outlines the short-term goals of the company b) Identifies potential risks and challenges c) Describes the company’s future aspirations d) Analyzes the company’s target market Answer: c) Describes the company’s future aspirations

18. Question: What is the purpose of conducting a competitive analysis in a business plan? a) Identify potential partners b) Analyze customer feedback c) Evaluate strengths and weaknesses of competitors d) Forecast financial performance Answer: c) Evaluate strengths and weaknesses of competitors

19. Question: Which financing option involves borrowing money that must be repaid with interest over time? a) Debt financing b) Equity financing c) Venture capital d) Angel investing Answer: a) Debt financing

20. Question: What does the term “ROI” stand for in the context of financial analysis? a) Revenue on Investment b) Return on Innovation c) Risk of Inflation d) Return on Investment Answer: d) Return on Investment

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Business Plan Quiz Questions And Answers

Take our Business Plan Quiz to measure your knowledge and skills in developing a comprehensive plan that could impress investors and guide your startup to success. This quiz is designed for entrepreneurs, business students, and anyone interested in learning more about business strategy. Our quiz covers all the essential elements of a business plan, including market analysis, operational planning, financial forecasting, and strategic objectives. Each question will challenge you to think critically about the various components that are crucial for a business plan's success, providing a practical understanding of what it takes to compile a viable and effective document. Whether Read more you're preparing to launch your own business, studying business management, or simply curious about the planning process, this quiz will provide valuable insights and help reinforce your understanding of effective business planning. Test your knowledge today with our Business Plan Quiz and take a step closer to realizing your entrepreneurial ambitions!

Business Plan Questions and Answers

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What is the component of business plan?

Marketing Strategy

Sales Strategy

Executive Summary

All of the above

Rate this question:

The stockholder may read only the executive summary of a business plan to decide about the investment in that business. State true or false. 

___________ in a business plan shows the estimated profit and expenses of the venture..

Financial plan

Revenue model

Accounts payable

None of the above

What is the primary purpose of a business plan?

To secure funding from investors 

To outline the company's goals and strategies 

To comply with legal requirements 

To attract potential employees

Which of these business components help in understanding how the business's plans to expand in the future?

Growth strategy

Competitor's analysis

Company description

Revenue plan

Which of the following is NOT a component of the Business Plan? 

Company Description

Competitive Analysis

Marketing Plan

Name the strategy which helps in understanding competitors' marketing strategy. 

Marketing analysis

Growth plan

Which of these business statements provides an   explanation of the organization's reason for existence? 

Executive summary

Objective Statement

Mission Statement

The role of a business plan is to identify potential customers within the target market. The process of dividing up the target market is called ____________. 

Market segmentation

Industry Analysis

Marketing plan 

Market analysis

In general, how many types of business plans are there? 

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Wait! Here's an interesting quiz for you.

Business Plan MCQ

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

Correct Answer: Reverse supply chain

Note: This Question is unanswered, help us to find answer for this one

Production creates _______ utility.

Correct Answer: Form

Product design and process selection are examples of _______ decisions.

Correct Answer: System design

Process choice is _________ driven.

Correct Answer: Demand

What financial information is in a balance sheet?

Correct Answer: Assets and liabilities of the business

What is the purpose of a business plan?

Correct Answer: To test the feasibility of the business

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

Correct Answer: The gross margin of the products

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

Correct Answer: Abstract

What makes a business pitch compelling?

Correct Answer: Selling that you are the right person with the right idea.

What critical information does the break-even analysis provide?

Correct Answer: The price of your product you should charge to cover the costs.

Who is the executive summary directed towards?

Correct Answer: Potential investors

A business model identifies ______.

Correct Answer: Sources of revenues

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

Correct Answer: That the entrepreneur did not do his/her homework

An investor can determine ______ from the cash flow statement.

Correct Answer: The timing for when the business collects payment

Which statement best describes why entrepreneurs conduct a feasibility analysis?

Correct Answer: To decide whether the new business is viable

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

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

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

Correct Answer: A team with complementary skills and experience.

What is the purpose of the business model canvas?

Correct Answer: To test hypotheses about a new business idea

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

Correct Answer: A customer problem and solution for the business

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.

Correct Answer: Financial document

Profit-and-Loss Statement is a financial document that shows ?

Correct Answer: All of the above

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

Correct Answer: Profit-and-Loss Statement

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

Correct Answer: All of them

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

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

Correct Answer: Cash flow Statement

Cash flow statement is a financial document that shows :

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..

Correct Answer: To raise capital, and to serve

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.

Correct Answer: Feasibility

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

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What is a business plan?

Written document that only outlines the business practices of the new business.

Written document that describes the financial aspects of the business.

Written document that only describes the ownership of the business.

Written document that describes all the steps necessary for opening and operating a successful business.

Why do you need a business plan?

To explain your idea

the ability to get financing.

it's a road map that sets objectives and goals for the business.

To help reduce the risk of business failure.

All of the above.

Complete the sentence: A business plan...

is useful once your business is operational but not much help during the startup phase

is not usually needed once the business is up and running

can serve as a tool for helping a business during the startup phase and for managing your business once it is up and running.

• 4. Multiple Choice Edit 30 seconds 1 pt Looks at likely risks to the business Contingency Plan Management Team Plan Marketing Plan Industry Overview
• 5. Multiple Choice Edit 30 seconds 1 pt An analysis of the business’s advantage over its competitors Growth Plan Competitive Analysis Contingency Plan Market Analysis
• 6. Multiple Choice Edit 30 seconds 1 pt A part of the business processes that result in the production and delivery of the product or service Competitive Analysis Company Description Operational Plan Organizational Plan
• 7. Multiple Choice Edit 30 seconds 1 pt How a company will make customers aware of its products/services Marketing Plan Industry Overview Product and Service Plan Growth Plan
• 8. Multiple Choice Edit 30 seconds 1 pt Looks at how the business will expand in the future Growth Plan Product and Service Plan Contingency Plan Company Description
• 9. Multiple Choice Edit 30 seconds 1 pt A potential business owner’s qualifications and those of any partners Company Description Management Team Plan Growth Plan Executive Summary
• 10. Multiple Choice Edit 45 seconds 1 pt A brief account of the key points contained in a business plan Executive Summary Company Description Mission Statement Vision Statement
• 11. Multiple Choice Edit 45 seconds 1 pt A description that provides an outline of a business Executive Summary Company Description Contingency Plan Mission Statement
• 12. Multiple Choice Edit 45 seconds 1 pt A description of the product or service to be offered Operational Plan Marketing Plan Product and Service Plan Industry Overview
• 13. Multiple Choice Edit 30 seconds 1 pt Who will run the company as well as management’s philosophy Organizational Plan Operational Plan Executive Summary Company Description
• 14. Multiple Choice Edit 30 seconds 1 pt Research of the potential business’s industry Market Analysis Industry Overview Contingency Plan Marketing Plan
• 15. Multiple Choice Edit 30 seconds 1 pt Research of the potential customer’s profile Market Analysis Marketing Plan Mission Statement Growth Plan
• 16. Multiple Choice Edit 30 seconds 1 pt A plan presenting financial forecasts for the business Loan Proposal Financial Plan Business Loan Plan Investor Plan
• 17. Multiple Choice Edit 45 seconds 1 pt The specific aspirations of a company, the major goals it will try to reach. Vision Statement Company Description Mission Statement Executive Summary

Which of the following is NOT a heading on a business plan?

Market research

Advertising campaign examples

Competitors

Which of the following would be interested in seeing the business plan of a new company?

Potential investors

The owners of the company

Banks/ potential lenders

Local council

A business plan would normally be updated:

A month after the business starts

Once a business adjusts its aims/objectives

Every so often

Never - It stays the same in its original form

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