SBA Business Planning & Development Strategies 3

Question 1

In financial projections, which statement shows a business's revenues, expenses, and net profit or loss over a period?

Accepted Answer

Income statement (Profit & Loss)

Answer

The income statement (also called a Profit & Loss statement) summarizes revenues and expenses to show net profit or loss for a specific period.

Question 2

A business owner uses Porter's Five Forces to assess:

Accepted Answer

Industry competitiveness and profitability potential

Answer

Porter's Five Forces framework analyzes industry structure by examining competitive rivalry, supplier power, buyer power, threat of substitutes, and threat of new entrants.

Question 3

Which milestone in a startup's business development is known as 'product-market fit'?

Accepted Answer

When the product satisfies a strong market demand

Answer

Product-market fit occurs when a product effectively meets the needs of a target market, evidenced by strong customer retention and organic growth.

Question 4

What does the term 'bootstrapping' mean in the context of business development?

Accepted Answer

Funding a business using personal savings and internal revenue without outside investment

Answer

Bootstrapping means building and scaling a business using the founder's own resources and generated revenue, avoiding external debt or equity financing.

Question 5

In strategic planning, a company's 'mission statement' differs from its 'vision statement' because the mission statement:

Accepted Answer

Defines the company's current purpose and how it serves customers

Answer

A mission statement defines why the company exists and what it does today, while a vision statement describes where the company aspires to be in the future.

(SBA) Small Business Administration Certified Business Practice Test

(SBA) Small Business Administration Certified Business Practice Test

SBA Business Planning & Development Strategies 3