Future Business Leaders of America (FBLA) Marketing Practice Test

What document must an entrepreneur prepare to attract potential investors?

1. Income statement

2. Business plan

3. Market analysis report

4. Feasibility study

The correct answer is: Business plan

The business plan is crucial for an entrepreneur aiming to attract potential investors. This document serves as a comprehensive blueprint that outlines the vision, strategy, and operational details of the business. It covers key components such as the business model, product or service offerings, target market, marketing strategies, financial projections, and management structure. A business plan not only demonstrates to potential investors the viability and potential profitability of the business but also indicates that the entrepreneur has thoughtfully considered various aspects of the enterprise. It provides insight into how the entrepreneur plans to generate revenue and manage risks, which are critical factors for investors deciding whether to provide funding. In contrast, while an income statement is essential for existing businesses to present financial performance, it does not provide the entirety of the entrepreneur's vision and plan for the future. A market analysis report may inform elements of the business plan regarding the target audience and competitive landscape, but it does not offer a holistic view of the business strategy. A feasibility study assesses the practicality of a project but lacks the detailed strategic outline needed to engage investors effectively. Thus, the business plan stands out as the key document investors look for when considering a new venture.