1st Half Of 4th Quarter Flashcards
These are the basic forces that motivate a person to do anything
Needs
It is a valuable guide to the consumer in making a purchase
Value for money
These are needs that are learned during a person’s life
Wants
What are the physiological needs
Food
Drink
Rest
Sex
What are the safety needs
Health-food
Medicine
Exercise
What are the social needs
Love
Friendship
Status
Esteem
These are concerned with protection and physical well-being
Safety needs
These are concerned with individual interaction with others
Social needs
These are concerned with the need for personal satisfaction unrelated to what others think or do like
Personal needs
What are the personal needs
Self-esteem
Accomplishments
fun
freedom
relaxation
this is the cash requirement in the first few months of the formation of the business
working capital
It conforms to the standards of the industry and the rules set by the government
A good workplace
This is an asset that will last for a long period of time
Fixed capital
This is the cost of putting up the legal business entity
Organizational cost or expense
It is the amount paid to lawyers and accountants in the writing of contracts or agreements and fees paid to government offices to register the business
Organizational cost or expense
This may be an estimate amount for reserve for contingencies or unforeseen events
Contingencies of unforeseen costs
Sources of cash
The personal money of the entrepreneur
Loans from relatives and friends
Loans from banks and other lending institutions
Investors
Government assistance programs
Non-Government Organizations (NGO)
Rules for sound financing
Know the cash requirements
Know the best terms
Know how and when to pay
Owner’s investment should be more than the borrowings
If the borrowings are needed for fixed asset or working capital
It is an activity designed to find out what is feasible, achievable, attainable, practicable, or workable
Feasibility study
Product feasibility studies are needed by:
Management
Investors
Lenders
Government agencies
They need the feasibility study in order for them to decide on new products or when they have excess funds to invest
Management
They need to know if the borrowers can pay the loans that will be granted to them
Lenders
They need to know the details of government projects before funds are released
Government agencies
They would want to put money in where the rate of return is high
Investors
Parts of a feasibility study
Executive summary
Project background and history
Industry study
Market study
Management study
Technical study
Financial study
Socio-economic study
It presents the highlights of the study that are shown in detail in the different sections
Executive summary
It presents the conclusions arrived at on the feasibility of the project
Executive summary
It discuss the proponents of the project or the owner of the project
Project background and history
This section stated the name of the business, the form of the organization, location of the business, and even include a brief history of the project
Project background and history
It consist of market description, demand, supply, statistical analysis of demand and supply, general marketing practices, proposed marketing programs, project sales, and system design
Market study
It consist of personal requirements, management policies, timetable, and system design
management study
it consist of the identification of the product and the process of acquiring, processing, and bringing the product to the point of sale
technical study
It consist of projected balance sheet, projected income statement, and projected cash flow over a period, which is usually five years
financial study
It shows the impact of the project on the personnel, on the community, on the environment, on the government, and other beneficiaries
Socio-economic study
It is a written document describing all relevant internal and external elements and strategies for starting a new venture, a new product, or a business expansion
Business plan
They determine the amount of money to be lent based on the plan
Lender
They analyze it for investment opportunities
Investors
they use it as a guide for operations
Employers
They determine what product to buy from the business
Customers
They set the policies guided partly by the plans of the business
The government
Parts of a business plan
Executive Summary
Descriptive of the venture
Operating plan
Marketing plan
Organizational plan
Financial plan
Appendices or annexes
The description of products or services and their unique features
Product
Explains the process of acquiring and processing products
Operational plan
It identifies the management team, investors, their background, duties and responsibilities and states the plan for employee recruitment and training
Organizational plan
It specifies financial needs and sources of financing and shows a three to five-year period pro forma income statement, cash flow projections, pro forma balance sheet, and break-even analysis
Financial plan
It shows supplementary materials
Appendix
it highlights the significant point arousing interest on the part of the reader
Executive summary
