Business Plan Trivia 5 — Questions and Answers
Question 1: A food truck owner testing recipes at farmers markets before writing a full plan is practicing what?
- Market validation (Correct answer)
- Franchise licensing
- Debt restructuring
- Vertical integration
Correct answer: Market validation
Market validation tests real customer demand before committing to a full business launch.
Question 2: Which funding source involves giving up ownership shares in exchange for capital?
- Bank loan
- Equipment lease
- Business credit card
- Equity investment (Correct answer)
Correct answer: Equity investment
Equity investors receive ownership stakes in return for the money they provide.
Question 3: What is the operations section of a business plan mainly about?
- Long-term stock price predictions
- Competitor advertising slogans
- How the business will produce and deliver its product or service day to day (Correct answer)
- The founder's personal biography
Correct answer: How the business will produce and deliver its product or service day to day
The operations section details daily processes, facilities, equipment, and logistics needed to run the business.
Question 4: A projection showing best-case, worst-case, and expected outcomes is called what?
- Payroll audit
- Scenario analysis (Correct answer)
- Trademark search
- Brand ladder
Correct answer: Scenario analysis
Scenario analysis models multiple possible futures to show how outcomes change under different conditions.
Question 5: Why do investors often scrutinize the management team section closely?
- Because it lists office furniture
- Because it sets product colors
- Because execution depends on the team's experience and skills (Correct answer)
- Because it contains the tax ID number
Correct answer: Because execution depends on the team's experience and skills
Investors bet on people as much as ideas, so the team's track record signals whether the plan can be executed.
Question 6: In a business plan, what does customer acquisition cost (CAC) measure?
- The annual salary of the sales manager
- The cost of renting retail space
- The price of the most expensive product
- The average spend required to gain one new customer (Correct answer)
Correct answer: The average spend required to gain one new customer
CAC divides total sales and marketing spend by the number of new customers gained.
Question 7: Which statement about updating a business plan is TRUE?
- It must never be changed after the first draft
- It is only updated when the company is sold
- It should be revisited regularly as conditions and results change (Correct answer)
- Only lawyers may revise it
Correct answer: It should be revisited regularly as conditions and results change
A business plan is a living document that should be updated as market conditions and performance evolve.
Business Plan Trivia 5
A food truck owner testing recipes at farmers markets before writing a full plan is practicing what?