Chapter 7: Business Plans Flashcards
Memorize deck
What is a Business plan ?
A blueprint that provides the written ,logical and systematic explanation of WHAT is being planned ,HOW it will be done and WHY the business will successful
What are the reasons for a business plan ?
It is often used to convince potential investors to invest their money in the business or to lend money to the entrepreneur for the business venture .
How should the business plan look ?
Is it logically set out and easy to follow
Includes relevant details and excludes uncessary details
Is neat and free of errors
Why is a business plan important ?
Helps entrepreneur identify its possible Streghts and weaknesses and well as opportuties and threats that might impact the business to help entrepreneur find different strategies to solve WT to create and maintain advantage in the market place .
What is USP ?
Unique Selling Preopostion
What is the format of the business plan
Cover page
Contents pages
Executive Summary
Objectives of the business and SWOT analysis
the Financial plan
Production plan
Marketing plan
Human resources
SWgummary
Appendices
what is the cover page and what does it have
It must look professional and contain information such as :
business name and address
business contact details
business logo and slogan
date that the business plan was done .
what is the content page and what does it have
Each section of the business plan should be numbered and the numbers are used when plan is developed and prepared
It must also have page numbers - helps a person that wants to go to a specific section
what is the executive summary and what does it have
it is only written at the end
it must be short and brief enough to attract readers attention but enough to motivate the person to continue reading
name or names and contact details of entrepreneur as well as brief background of each person( qualifications and experience )
the form of ownerships determining investors risk
short description of the product and service and location of the business( and why it was chosen )
Name the 3 types of forms of ownership
Sole trader or sole propietor
Partnership
Company limited
What is a sole trader ,partnership and company
Sole trader - 1 owners
Partnership -2 -20 owners
Company - 20 - unlimited
What is the difference between a slogan and logo ?
A logo is a picture representation while a slogan is a catch phrase which is identified with the business
What is an organic gram /organagram
hierarchy of employment in a business
What does SMART stand form
S- specific
M- measurable
A- achievable
R- relavant
T- timeous
What does timeous mean
time limit to reach goal
what does relevant
has to do with industry business is in
What is stragetic planning
Vision, mission , Goal and Objectives
Name the factors regarding location of the business
How the business fits into the environment
Is the business near other businesses that compliment it
Will customers have easy access to the business ? Will there be enough parking for customer ?
Security is an important aspect
if business is establishing itself in a mall it must consider trading hours
Businesess in direct competition need to be noted
True or False business needs to do market research
True
What does market research involve
A smart strategic plan
What is a the business vision ?
Vision is the direction that business aims for or see themselves in the future
What is a the business mission ?
Daily actions to achieve vission or core activities and values of the business
What is a the business objectives ?
Short term tasks to reach your goal or SMART
What is a the business goal ?
Long term tasks
What must the business idea be
feastiable and visiable
Why must the business idea be feastable and visiable ?
Feastable - is it a workable idea that can be practically implemented
Visable - Will business be able to generate and maintain profits from this idea
True or False : Strengths and weakness are external
False they are internal
True or False : Threats and opportunites are external
True
What are the elements of the SWOT analysis
Strengths ,Weakeness , Opportunites and Threats
What is the difference between tanagible and intangible
Tangiable is a physical thing you can see and Intangiable is not a physical thing but has value
Name some examples of strengths or weaknesses
Location, Employees skills,Business Culture , UPP, Operational efficentcy and quality
What does UPP stand for
Unique Product Patented
What are the factors affecting opportunites and threats
PESTLE elements
What are the PESTLE elements
P-Politcal
E-Economic /Ethics
S- Social
T- technological
L- Legal
E- Enviromental
What is a contingency plan ?
a plan designed to take account of a possible future event or circumstance
What enviroment is the PESTLE elements
Marco environment
What are possible examples of opportunities and threats
Current competitors
Consumers
Suppliers
Substitute goods
New competitors
True or False : Poor financial planning is one of the biggest causes of business failure
True
True or False : all the financial aspects that may influence a business both negatively and positively
True
What is the difference between own and borrowed capital ?
Own capital is contributed by the owner(s) and if the business makes a profit ,owners will receive profit
Borrowed capital normally comes from the banks and interest needs to be paid on this money
What is a fixed cost ?
stays the same regardless of input e,g rent ,insurance
what is a variable cost ?
costs that change according to input e.g water and electricity
What is long term / fixed capital
capital used to purchase non-current assets like vehicles and equipment
What is working capital ?
Working capital is used to purchase trading inventory and to have cash readily available for expenses and short term liabilities
True or False : Start -up capital calculation is made when starting a business
True
What information needs to be included in the production plan
Details of suppliers
The method that will be used to manufacture products has to be discussed in detail such as machinery and equipment used
Amount of stock being manufactured
Quality control
A Cash flow statement is also required in the financial plan what is another name for this
Liquidity
What statement is in the production plan
Production Cost Statement
What needs to be included in
Needs to include fixed costs and variable costs
Name the 3 methods of production
Mass
Batch
Jobbing
Name the 2 types of quality control
Sampling and SABS
What does SABS stand for
South African Bureu of Standards
What is the break even point
The point where we don’t make an profit or loss ,Income = Expenses . That means once business reaches beyond this point thats when they start to generate a profit
True or False :some products are a combination of all production methods
True e.g Cars
True or False : a business needs to include a break -even analysis in the production plan
True
Explain the difference in Mass ,Batch and Jobbing
Mass -producion of large amount of things
Batch - produce large things but in different colours or sizes
Jobbing - producing things according to orders because each one is so different e.g MD dresses
What is in the marketing plan
will provide information regarding market research that was conducted to determine certain things
What does market research help determine
1.Who is the target market and what needs do they have
2. How much(price )are they willing to pay
3.Where would they wish to purchase the product/service
4. What are the most effective ways of communicating with the target market about the products and services available
What are the Four P,s policy in the marketing plan
Product policy
Pricing policy
Place policy
promotion policy
What is involved in the Product policy
Details of product/service
how the product will be packaged
how brand loyalty will be assured
What is brand loyalty ?
When consumers choose your product over those of other competitors
What is involved in the Pricing policy
Factors that may affect the price of the product
How the price will be determined/calculated
What are the different pricing stragerics
Low cost stragery
Price skimming
Penetraction
Explain the low cost strategy
Low prices - like pep
Explain the price skimming strategy
From high to low prices
Explain the Pentetration strategy
From low to high / physiological pricing R 99.99 instead of 100
What is involved in the Place policy
will the product /service be marketed directly to the consumer or will it be distributed to the wholesaler ,retailer or agents
What is the other name of the place policy
Distribution Policy
What is involved in the Promotion policy
how and where will the product be advertised
how will sales promotion and personal selling techniques be used to communicate with the target market
What is the other name of the promotion policy
marketing communication
True or False : Human resource indicate how many people will need to be employed as well as the range of skills required
True
True or False : Salaries and wages are included in the human resources
False ,Salaries and wages are found in the financial plan
What does CSR stand for
Cooperate
Social
Responsibility
Name 3 examples of CSR
recycling or R2 for hope at KFC or donating to charity
What does the summary in the business plan include
The business plan should conclude on a positive note including details regarding the contribution that the business will make towards the broader community
What is an appendices in the business plan
its where additional information that was not originally included in the business plan is included
What are examples of things to put in appendices
Design of the shop
Employment contract
Glossary
True of False : A business is a cooperate citizen
True
What is the triple bottom line
Profit
People
Planet
True or False : Salaries and wages are the largest expense in the financial section of the business plan
True
