Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

What is one positive way to address the risk presented in a business plan?

1. By avoiding any mention of risk

2. By offering only high-risk options

3. By presenting alternatives

4. By focusing on past successes only

The correct answer is: By presenting alternatives

Presenting alternatives is a constructive approach to addressing risks outlined in a business plan. This method involves identifying potential challenges and offering feasible solutions or alternative strategies to mitigate those risks. By doing so, a business not only acknowledges the existence of risks but also demonstrates a proactive attitude toward managing them. This can enhance the credibility of the business plan, as it shows that the entrepreneur has thought critically about the challenges and has prepared to navigate them effectively. Choosing to avoid mention of risks would leave stakeholders unaware of possible issues, potentially leading to a loss of trust. Focusing solely on high-risk options does not demonstrate a balanced analysis; it may alienate investors who are looking for more stable opportunities. Concentrating only on past successes can create a false sense of security without realistically addressing current or future challenges. Presenting alternatives cultivates a balanced perspective and fosters confidence in the business's ability to adapt and succeed despite potential obstacles.