Chapter 3 Small Business Planning Flashcards
What is planning
Planning is the process of formulating objectives and determining how to achieve them.
What is a resource
A resource is any person or product that will help in the production of a good or service.
What are human resources
Human resources are the employees who provide their time, energy, skills and effort.
What are physical resources
Physical resources refer to equipment such as a computer, cash register, machinery, motor vehicle, office equipment and stock.
What is an asset
An asset is any item of value owned by the business.
What are establishment costs
Establishment costs include those costs involved in setting up the business.
What are operating costs
Operating costs include those costs involved in the ordinary day-to-day running of the business.
What is equity
Equity is the funds contributed by the owner(s) of a business to commence and build the business.
What is debt
Debt is the funds provided by sources outside the business, which must be paid back over time, with interest.
What is working capital
Working capital is the funds available for the short-term financial commitments of a business.
What is bank overdraft
With a bank overdraft, the bank allows a business or individual to overdraw their account up to an agreed limit for a specified time, to help overcome a temporary cash shortfall.
What are bank bills
They are a type of bill of exchange and are given for larger amounts, usually over $100000, for a period of 90–180 days. The borrower receives the money immediately and promises to pay the sum of money and interest at a future time.
What is trade credit
Trade credit exists when a supplier provides products to a business with an agreement to charge for the goods or services later.
What is mortgage
A mortgage is a loan secured by the property of the borrower (the business).
What is leasing
Leasing is a way of financing the purchase of assets without a large initial capital outlay.
What is a lessee
The lessee is the person or business to whom a lease is granted.
What is a lessor
the lessor owns and leases the equipment for an agreed period of time.
What is a grant
Governments are also providers of finance in the form of grants for business development, and especially to promote exports.
What is marketing
Marketing is ‘the process of planning and executing the conception, pricing, promotion and distribution
of ideas, goods and services to create exchanges that satisfy individual and organisational objectives’ (American Marketing Association).
What is a marketing objective
A marketing objective is a statement of what is to be achieved through the marketing activities.
What is a marketing target
The target market is the group of customers to which the business intends to sell its product.
What are marketing strategies
Marketing strategies are actions undertaken to achieve the business’s marketing objectives.
What is a marketing mix
Marketing mix refers to the combination of the four elements of marketing, the four Ps — product, price, promotion and place — that make up the marketing strategy.
What is marketing management
Marketing management is the process of monitoring and modifying the marketing plan.
What is enlightened self interest
Enlightened self-interest is the belief that a business ultimately helps itself when it helps to solve society’s problems.
What is a triple bottom line
Triple bottom line refers to the economic, environmental and social performance of a business.
What is a business plan
A business plan is a written statement of the business’s goals and objectives, and the steps to be taken to achieve them.
