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Small Business Management Toolbox
Undertake business planning
Contents of a business plan – Self test
This self test covers the following topics.
The financial section
The marketing section
The operations section
The staffing section
For each question, choose the response you believe is correct.
The correct answer is provided at the end of each question.
Question 1
Which of the following lists the two main approaches to developing a cashflow
forecast?
A Identify sources of finance and guess how much will flow into your business.
B Review old forecasts and base the next forecast period entirely on the previous
one.
C Make a guess about the most likely cashflow forecast and compare this with the
best guess of someone else working in the same industry.
D Start with market research and a prediction about sales and profits expected from
marketing strategies and use dollar targets to calculate whether the market can
be tapped for this amount.
The correct answer is D - Start with market research and a prediction about sales
and profits expected from marketing strategies and use dollar targets to calculate
whether the market can be tapped for this amount.
These approaches will tell you about market potential as well as the dollar amounts
required to survive.
Question 2
Which of the following is the most liquid business asset?
A Machinery.
B Building.
C Stock.
D Cash.
The correct answer is D - Cash.
Cash is the most liquid business asset. How quickly certain assets can be converted
to cash is one measure of business viability.
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Question 3
Which of the following tend to be the main sources of finance used in small
businesses in Australia?
A Family, friends and personal savings of the owner.
B Banks and credit unions.
C Venture capitalists.
D Sale of other assets.
The correct answer is A - Family, friends and personal savings of the owner.
Research suggests that these are in fact the most common sources of small
business finance.
Question 4
Which of the following measurements compares the total liabilities with the total
assets of a business?
A Net profit margin.
B Debt ratio.
C Current ratio.
D Total asset turnover.
The correct answer is B - Debt ratio.
The debt ratio is the total liabilities divided by the total assets.
Question 5
The marketing communication mix comprises:
A phone, fax and internet
B words, signs, colours and sounds
C speaking and writing
D advertising, face to face selling, sales promotions, public relations and publicity.
The correct answer is D - advertising, face to face selling, sales promotions, public
relations and publicity.
These make up the marketing communications mix.
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Question 6
A cost-based competitive advantage is:
A a realistic strategy only if there is a true and sustainable cost advantage
B the recommended strategy for businesses with a high quality product
C a good strategy for all businesses to follow
D an ideal that can never be achieved.
The correct answer is A - a realistic strategy only if there is a true and sustainable
cost-advantage.
Lowering prices without a true cost advantage is a recipe for disaster.
Question 7
The key to ensuring effective and efficient operations is:
A following through with efficiency before turning to effectiveness
B making sure costs are as low as possible
C continual monitoring of key performance indicators
D making sure quality is as high as possible.
The correct answer is C - continual monitoring of key performance indicators.
It’s a balancing act to be continuously monitored.
Question 8
Which of the following are health and safety issues requiring detailed procedures and
plans?
A Fire, emergency, physical, chemical and biological hazards, noise and heavy
lifting.
B Operational effectiveness and efficiency.
C Identifying loopholes in occupational health and safety laws.
D Keeping costs down as a primary goal in safety equipment purchases.
The correct answer is A - Fire, emergency, physical, chemical and biological hazards,
noise and heavy lifting.
Procedures and plans should be put in place to deal with these health and safety
issues.
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Question 9
The basic legal business structures are:
A internal and external
B federal state and common law
C mission, goals and objectives
D sole trader, partnership, company and trusts.
The correct answer is D - sole trader, partnership, company and trusts.
These are the basic legal structures.
Question 10
In a world where people can change jobs and move on so quickly, businesses have
to:
A disregard the strict rules about industrial relations, equal employment
opportunities and anti-discrimination
B value and reward people properly if they want to retain them
C avoid succession planning
D use rotating casual staff to avoid having to pay large superannuation premiums.
The correct answer is B - value and reward people properly if they want to retain
them.
If good staff don’t feel valued they will feel less inclined to stay with your business.
Question 11
Valuing soft assets refers to:
A pricing services
B protecting perishable stock
C formally recognising and rewarding good staff and good ideas as part of your
business plan
D recording the amount of cash on hand each month.
The correct answer is C – formally recognising and rewarding good staff and good
ideas as part of your business plan.
Valuing people is different from valuing material goods.
 Australian National Training Authority (ANTA) 2003. All rights reserved
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