Future Business Leaders of America (FBLA) Entrepreneurship Practice Test

Which document is essential to support the financial viability of the business in a business plan?

1. Risk Assessment

2. Marketing Materials

3. Projections of Revenue and Expenses

4. Customer Testimonials

The correct answer is: Projections of Revenue and Expenses

Projections of Revenue and Expenses are crucial in a business plan because they provide a detailed overview of the expected financial performance of the business over a specific period. This document outlines anticipated income, costs, and overall profitability, allowing stakeholders to analyze the business's potential for success. By presenting well-researched and realistic projections, entrepreneurs can demonstrate to investors, lenders, and other stakeholders that they have a clear understanding of their financial landscape. This helps to build credibility and instills confidence in the strategic planning of the business. Other documents listed, while useful, do not directly address financial viability to the same extent. Risk Assessment is important for understanding and mitigating potential pitfalls in the business environment but does not showcase financial expectations. Marketing Materials can help attract customers and promote the business, yet they do not provide insights into revenue and expenses. Customer Testimonials serve as social proof of the product or service's value, but they do not contribute quantitative financial analysis. Thus, without sound revenue and expense projections, a business plan lacks the necessary financial foundation to assure viability.