Business Plan Trivia 4

Question 1

An entrepreneur pitching to a bank should emphasize which part of the business plan most?

Accepted Answer

Financial projections and repayment ability

Answer

Banks lend based on demonstrated ability to repay, so realistic financials matter most to them.

Question 2

What is a contingency plan within a business plan?

Accepted Answer

A backup strategy for when things go wrong

Answer

A contingency plan outlines alternative actions the business will take if key assumptions fail.

Question 3

Which of these is a fixed cost in a typical business plan's financial section?

Accepted Answer

Monthly office rent

Answer

Rent stays the same regardless of sales volume, making it a fixed cost.

Question 4

What does an exit strategy section describe?

Accepted Answer

How founders or investors will eventually cash out, such as acquisition or IPO

Answer

An exit strategy explains how owners and investors plan to realize returns, often via sale, merger, or IPO.

Question 5

In a business plan, gross margin is calculated as what?

Accepted Answer

Revenue minus cost of goods sold, divided by revenue

Answer

Gross margin measures the percentage of revenue remaining after subtracting direct production costs.

Business Plan Practice Test