Question

Peppy is confident that Pepe's Pizzazzeria will be a success, but only if he has enough money to do things right. Since Pepe has very little personal wealth, he knows he must find financial assistance.
In order to prepare for meetings with bankers and potential investors, Pepe should:

A. hire a public relations firm to develop promotional materials.
B. develop a business plan.
C. read a book on entrepreneurship.
D. create a partnership contract.

Answer 1

Answer:

The correct answer is letter "B": develop a business plan.

Explanation:

Entrepreneurs who lack funds to start their ventures should develop a business plan so it can be presented to prospective investors who will decide if the venture is of their interest or not. The business plan should include the mission and vision of the business as well as a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis explaining how the business will mitigate its risks and maximize its benefits.

The business plan should be innovative in Peppy's case since pizzerias are very common, thus, Pepe's Pizzazzeria must have a clear competitive advantage to face competitors.