Entrepreneurship Business Planning and Strategy 2 — Questions and Answers
Question 1: What is a mission statement?
- A company's long-term financial goal
- A brief description of a company's purpose and values (Correct answer)
- A legal document filed with the state
- A marketing slogan for advertising
Correct answer: A brief description of a company's purpose and values
A mission statement concisely describes why a company exists, what it does, and the values that guide it.
Question 2: What is a vision statement?
- A description of current operations
- A long-term aspirational goal for where the company wants to be (Correct answer)
- A financial forecast for next quarter
- A statement of employee benefits
Correct answer: A long-term aspirational goal for where the company wants to be
A vision statement describes the desired future position of the company and inspires stakeholders toward a common long-term goal.
Question 3: What is meant by 'scalability' in a business model?
- The ability to reduce employee headcount quickly
- The capacity to grow revenue without proportional cost increases (Correct answer)
- The ability to relocate a business to a new city
- Having a flexible return policy for customers
Correct answer: The capacity to grow revenue without proportional cost increases
A scalable business model can grow sales and revenue significantly without requiring equally large increases in operating costs.
Question 4: What is a business model canvas?
- A visual chart of employee org structure
- A one-page strategic framework describing how a business creates and delivers value (Correct answer)
- A legal template for business registration
- A financial spreadsheet for projections
Correct answer: A one-page strategic framework describing how a business creates and delivers value
The business model canvas is a one-page visual tool with nine building blocks that describe a company's value proposition, customers, channels, and revenue streams.
Question 5: What does 'bootstrapping' a startup mean?
- Hiring a large team quickly to gain market share
- Funding a business using personal savings without outside investors (Correct answer)
- Launching a business with a government grant
- Taking out a bank loan to fund operations
Correct answer: Funding a business using personal savings without outside investors
Bootstrapping means starting and growing a business using personal funds or operating revenues rather than external investment.
Question 6: Which planning tool helps entrepreneurs forecast future revenues and expenses?
- Org chart
- Brand guideline
- Financial projection (Correct answer)
- Customer journey map
Correct answer: Financial projection
A financial projection estimates future income, costs, and cash flow, helping entrepreneurs plan resource allocation and demonstrate viability to investors.
Entrepreneurship Business Planning and Strategy 2
What is a mission statement?