The Business Plan

Question 1

Sam is planning to start a pool cleaning company from his home. He has decided on a radius of 30 miles from his home as a region of operation. After surveying the region of operation, he found that 43% of the homes in the region have a swimming pool. If there are 36,248 homes within a 30 mile radius of Sam’s home, approximately how many potential customers does Sam have?

Revolt · Accepted Answer

15,587

Question 2

Korey is planning to open a comic book store. When the store opens, he plans to be the only employee. As the business grows, he will extend his hours of operations and hire additional employees as necessary. In Korey’s business plan, this information should be included in the _____ component.

Revolt · Accepted Answer

organizational plan

Question 3

Korey’s comic book store has been up and running for 4 years. Korey feels that his store has been successful and is considering moving to a larger property to allow for greater inventory and customer opportunities in his business. He would like investors to cover the cost of his expansion. The profits of Korey’s comic book store for its first four years are outlined below. According to this information, what would be the best estimate for Korey to quote as expected profits in the next year in his new business plan? Year Net Profits 1 $14,250.00 2 $15,390.00 3 $16,621.20 4 $17,950.90 5

Revolt · Accepted Answer

$19,386.97

Question 4

Which of the following is not required by lenders and investors?

Revolt · Accepted Answer

master plan

Question 5

Sam is planning to start a pool cleaning business from his home, but has realized that he does not have enough money in savings or credit to pay for the set-up costs and first year of operation. Which of the following would not be a good way for Sam to get the money to start his business?

Revolt · Accepted Answer

Purchase a $3,000 compact car instead of a truck for his business.

Question 6

Which of the following is not a component included in a standard business plan?

Revolt · Accepted Answer

employee summary

Question 7

Korey is planning to open a comic book store near his home. After completing a population survey for 3,520 homes in a 5 mile radius, Korey created the chart below to include in the market analysis section of his business plan. Which of the following is the best reason to include in the market analysis component of Korey's business plan explaining why such a high percentage of grade-school aged kids in the surveyed region is good for Korey's store?

Revolt · Accepted Answer

Younger kids who read comic books are likely to read them when they are older, which will create a current and future customer base.

Question 8

Korey is planning to open a comic book store. In his first year of operation, Korey expects to average $1,000 of profit each month. He then expects profits to increase by 6% each year for the next 4 years. How much does Korey expect to make in profits in his fifth year of operation?

Revolt · Accepted Answer

$15,149.72

Question 9

Sam is planning to start a pool cleaning business. He expect to make a profit of $45,000 in his first year of business, after which he expects profits to increase by 5.5% annually for the next 5 years.Sam's business will cost $49,500 to set up and run for the first year. Sam then expects an annual operational expense total of $30,500. According to Sam's model, how long will it take Sam to see an overall profit in his business (where total profits exceed total expenses)?

Revolt · Accepted Answer

Sam will see an overall profit in his second year of business.

Question 10

Which of the following is not a component included in a standard business plan?

Revolt · Accepted Answer

credit analysis

The Business Plan Answers

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