Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

Developing a business plan is a good way to:

1. Encourage oversights in resource planning

2. Prevent costly oversights in the creation of a business

3. Reduce the workload for management

4. Increase the likelihood of business failure

The correct answer is: Prevent costly oversights in the creation of a business

Developing a business plan plays a critical role in establishing a clear framework for starting and running a business. It helps entrepreneurs articulate their vision, mission, and strategic objectives, while also outlining the necessary steps to achieve them. One of the most significant benefits of a well-crafted business plan is its ability to prevent costly oversights in the creation of a business. Through the business plan, various aspects such as market research, competitive analysis, marketing strategies, financial projections, and operational plans can be thoroughly considered and documented. This leads to a deeper understanding of the business environment and associated risks, ensuring that important factors are not overlooked in the planning stages. Essentially, a business plan serves as a roadmap that guides entrepreneurs as they navigate the early challenges of launching and managing a business, ultimately increasing the likelihood of a successful outcome.