SBA Business Planning & Development Strategies 2 — Questions and Answers
Question 1: Which section of a business plan outlines how a company will reach its target customers and generate revenue?
- Operations Plan
- Marketing and Sales Strategy (Correct answer)
- Financial Projections
- Company Overview
Correct answer: Marketing and Sales Strategy
The Marketing and Sales Strategy section defines target markets, positioning, pricing, and the tactics used to acquire and retain customers.
Question 2: A SWOT analysis is used in business planning to evaluate which four factors?
- Sales, Workforce, Operations, Technology
- Strengths, Weaknesses, Opportunities, Threats (Correct answer)
- Strategy, Work, Objectives, Tactics
- Supply, Wage, Output, Trade
Correct answer: Strengths, Weaknesses, Opportunities, Threats
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats — an internal and external assessment framework used to guide strategy.
Question 3: What is the primary purpose of a break-even analysis in a business plan?
- To calculate the maximum possible profit
- To determine the sales volume at which revenues equal total costs (Correct answer)
- To project five-year cash flow
- To assess competitor pricing
Correct answer: To determine the sales volume at which revenues equal total costs
Break-even analysis identifies the point at which total revenue covers all fixed and variable costs, resulting in neither profit nor loss.
Question 4: Which growth strategy involves a business expanding into new markets with its existing products or services?
- Product development
- Diversification
- Market penetration
- Market development (Correct answer)
Correct answer: Market development
Market development is the Ansoff Matrix strategy of selling existing products to new geographic or demographic markets.
Question 5: An executive summary in a business plan should typically be written:
- Before any other section so it guides the rest of the plan
- Last, after all other sections are complete (Correct answer)
- By an outside consultant for objectivity
- Only for plans exceeding 50 pages
Correct answer: Last, after all other sections are complete
Although it appears first, the executive summary is written last so it accurately reflects the finalized content of the entire plan.
Question 6: Which type of business plan is typically shorter, visually driven, and used to pitch investors quickly?
- Operational plan
- Lean startup plan (Correct answer)
- Strategic plan
- Feasibility study
Correct answer: Lean startup plan
A lean startup plan (often a one-page or pitch-deck format) highlights key metrics and value propositions for quick investor evaluation.
Question 7: When defining a target market in a business plan, demographic segmentation refers to dividing the market by:
- Geographic location and climate
- Lifestyle, values, and personality
- Age, income, gender, and education (Correct answer)
- Purchasing behavior and brand loyalty
Correct answer: Age, income, gender, and education
Demographic segmentation groups consumers by measurable characteristics such as age, income level, gender, and educational attainment.
SBA Business Planning & Development Strategies 2
Which section of a business plan outlines how a company will reach its target customers and generate revenue?