Business Plan

Question 1

Business Model

Answer 1

a process a company will use to generate sales and profit

Question 2

Feasibility Analysis

Answer 2

serves as a filter, screening out ideas that lack the potential of building a successful business before an entrepreneur commits the necessary resources to building a business plan.

Question 3

Elements of Feasibility Analysis

Answer 3

1. Industry and Market Feasibility
2. Product or Service Feasibility
3. Financial Feasibility

Question 4

Five Forces Model

Answer 4

1. Rivalry
2. Bargaining power of suppliers
3. Bargaining power of buyers
4. Threat of new entrants
5. Threat of substitute products/services

Question 5

How does bargaining power of suppliers determine the attractiveness of the industry?

Answer 5

Greater the leverage of the suppliers, less attractive is the industry.

Question 6

What is a business plan?

Answer 6

It is a written summary of:

1. Proposed business venture
2. Operational and financial details
3. Marketing opportunities and strategy
4. Manager’s skills and abilities

Question 7

What are the two essential functions of the business plan

Answer 7

Charting future course and defining its strategy

Attracting lenders and investors who will provide needed capital

Question 8

A plan must pass 3 tests what are they?

Answer 8

1. Reality Test
2. Competitive Test
3. Value Test

Question 9

What are the 5Cs of Credit

Answer 9

1. Capital
2. Capacity
3. Collateral
4. Character
5. Conditions