Business Plan Business Plan 3 — Questions and Answers
Question 1: A lean startup founder replaces a 40-page business plan with a one-page framework mapping partners, activities, and revenue streams. Which tool is she using?
- Gantt chart
- Balanced scorecard
- Business Model Canvas (Correct answer)
- PERT diagram
Correct answer: Business Model Canvas
The Business Model Canvas condenses nine building blocks of a business model onto a single page.
Question 2: Which pricing approach sets prices primarily based on the perceived worth of the product to customers rather than production costs?
- Value-based pricing (Correct answer)
- Penetration pricing
- Cost-plus pricing
- Markup pricing
Correct answer: Value-based pricing
Value-based pricing anchors the price to what customers believe the product is worth.
Question 3: In the market analysis section, defining the ideal customer by age, income, location, and buying habits is called:
- Capital budgeting
- Channel conflict analysis
- Customer segmentation and targeting (Correct answer)
- Vertical integration
Correct answer: Customer segmentation and targeting
Segmentation divides the market into groups and targeting selects which group to serve.
Question 4: A business plan projects $500,000 in fixed costs, a unit price of $50, and variable cost of $30 per unit. How many units must be sold to break even?
- 16,667
- 10,000
- 50,000
- 25,000 (Correct answer)
Correct answer: 25,000
Break-even units equal fixed costs divided by contribution margin: $500,000 divided by $20 equals 25,000 units.
Question 5: Which funding source described in a business plan requires giving up ownership shares in exchange for capital?
- Equipment leasing
- A business line of credit
- A bank term loan
- Equity financing from angel investors (Correct answer)
Correct answer: Equity financing from angel investors
Equity financing trades ownership stakes for capital, unlike debt which is repaid with interest.
Question 6: The operations section of a manufacturing startup's plan should primarily describe:
- Historical stock market returns
- The founder's personal hobbies
- Production processes, facilities, equipment, and supply chain (Correct answer)
- Competitor advertising slogans
Correct answer: Production processes, facilities, equipment, and supply chain
The operations plan explains how the product will actually be made and delivered.
Question 7: A plan claims the company will win because rivals cannot easily copy its patented process. This is an example of a:
- Contingency reserve
- Trade credit arrangement
- Loss leader strategy
- Sustainable competitive advantage (Correct answer)
Correct answer: Sustainable competitive advantage
A protected, hard-to-replicate capability that preserves market position is a sustainable competitive advantage.
Business Plan Business Plan 3
A lean startup founder replaces a 40-page business plan with a one-page framework mapping partners, activities, and revenue streams.
Which tool is she using?