Final Exam Flashcards
“If you fail to prepare, you are preparing to fail.
Sir Benjamin Franklin,
one of the Founding Fathers of the United States
Sir Benjamin Franklin,
a formal written description of your business future by defining your goals, strategies to meet the goals, and the timeframe for the achievement of those goals
business plan
the Department of Trade and Industry through the Bureau of Small and Medium Enterprise Development mentioned the following reasons of writing a business plan.
by Edralin (2016),
mentioned the following reasons of writing a business plan.
- Minimize or remove risk of losing money. Investment on poorly researched business that may result to financial instability should be avoided. You must see all sides of the venture before letting go of any resources
- Avold costly mistakes. Unplanned decisions may result to negative outcomes that may hurt the business.
- Anticipate the financial requirements. Futuristic view of the increase or decrease of demand on the given product/service will prepare you in meeting business. obligations
- Organize the activities beforehand. Thinking in advance, you must look at the near and distant future. Contingency plans must be present for anticipated concerns that may arise.
- Assess actual performance against set goals. Having a clear goal will help you achieve your target in terms of sales, revenues or even expenses.
- Apply for financing from lending institutions. There are cases that financial assistance from other people or organization is needed to start a business. A good business plan may encourage investors to entrust you their resources but remember to be wise whenever you are lending money and make sure to use the money for its intended purpose for the growth of the business
Parts of a Business Plan
Executive Summary
Management and Organization
Product/Service Plan
Market Plan
Financial Plan
This part can be found at the beginning of the plan but is the last to be accomplished since this synthesizes the whole plan. This contains a brief Introduction and summarizes everything that is relevant and important to the prospect business audience.
Executive Summary
the information needed to guide you
description of your proposed business and business model
description of the market opportunity you want to capture or market problem the business solves
reasons why this is an attractive business opportunity
key distinctions or differentiators of your business versus competitors
overview of the sales, marketing, and operations strategy and plan
description of your executive planning timeline
overview of the projected financials containing revenues, cost, profits and assumptions of your business
This part includes all the basic information of your business. This also describes the workflow (organizational structure: the background, experience and role of each) of your business from the highest position up to the lowest
Management and Organization
the information needed to guide you2:
Company Name, Logo, and Address
Vision and Mission Statements
Key Personnel
Organizational Chart
Ownership Capitalization, Compensation, and Incentives
External Management Support
Product/Service Plan
This part describes the highlight of the product or service offered to the customers so that they will be encouraged to patronize your product or service. It also explains how the products or services will be accepted and carried by the distribution channels.
Purpose of your Product or Service
Product’s/Service’s Unique Features
Material Requirements and Sources of Supply
Processing Equipment that will be Used to Manufacture the Product or Render the Service
Production or Service Process and Controls
Distribution Logistics
Regulatory and Other Compliance Issues
Product/Service Plan
This includes your business strategies, the target market value proposition of your product or services that may increase the company sales (Chen, 2019).
Market Plan
These are the information needed to guide you: in market plan
Market Analysis
Marketing and Sales Strategies
Product or Service Characteristics
Pricing Policy
• Sales Projection
This includes the process of how you divide the total market into smaller groups seeking similar needs and wants (market segmentation) and the characteristic analysis of the business in relation to internal and external factors (SWOT Analysis)
Market Analysis
is a popular tool to evaluate the internal environment pioneered by George Albert Smith Jr. and Ronald Christensen, two Harvard business professors (Aduana, 2016). SWOT stands for Strengths, Weaknesses, Opportunities and Threats.
SWOT Analysis,
refer to strong attributes or capabilities of the business that provide great advantage in exploiting the business opportunity.
Strengths
are poor attributes or deficiencies that give disadvantage to the business. Both strengths and weaknesses are considered internal origins, meaning they are attributes inside the business venture.
Weaknesses
are business situations that must be exploited due to their potential in terms of profit and growth.
opportunities
are possible external factors that may harm the business. Both opportunities
Threats
These are also known as the product PUSH. These have three key characteristics that allow to perform marketing function of persuading customers to buy right away. (Go, 2010
Marketing and sales strategies
Sales promotions are conducted at short periods creating a sense of urgency on the part of the customers.
Temporary
Sales promotions are used to create short-term differentiation by offering a better product value.
Better value
Sales promotions promote growth sometimes even at artificial level
Beneficial
7-11 stores offer promotional sales such as “Buyl Takel of products at particular period. At the same time, they offer Cliqq Rewards to loyal customers by getting Cliqq points in every purchase which in turn can be exchanged to free or discounted items.
This includes value proposition of the product/service. Value proposition answers the question, why should your customers buy from you
Product/Service Characteristics
These contain the convincing reasons that buyers should see that will make them purchase your products/services
Product/Service Characteristics
BDO: “We find ways”. Before this pandemic, while other banks operate from 8AM-3PM Mondays to Fridays, BDO offers services until 6PM and even operates during weekends fulfilling their promise of “finding ways” for the customers
Product/Service Characteristics
This part specifies the price of the product/service. It must be noted that quality and price cannot be separated in marketing (Aduana, 2016). You must be careful in setting the price of your product/service considering the costs of production, competitors’ pricing, and customers’ perception
Pricing Policy
Filipinos are generally price conscious. We tend to check the price tag of a product first before whether to buy or not to buy a commodity. SALE” and “PROMO” tags are consumer magnets. In cases wherein the prices of the product cannot be decreased. the entrepreneur should be able to give emphasis on the benefits of his/her product to convince the customer of its value.
Pricing Policy
This is also called sales forecast or the prediction of the amount of revenue your company expects to earn at some point in the future. This shows the quantity of product sold or service rendered and its corresponding amount within a given pertod.
Sales Projection
This is a document containing your current financial situation as an entrepreneur and long-term monetary goals, as well as tactics to attain those objectives. You may create a financial plan on your own or with the assistance of someone who is knowledgeable about handling finances such as certified financial planner.
Financial Plan
These are expenses that you will be needing during the course of creating a new business.
Start-up costs requirements
These are estimates of your future profits and expenses.
Financial projections
This is a financial tool that will help you determine at what stage (or period) your company will start gaining profit.
Break-even analysis
This includes the amount needed for business operations as well as sources of such funds (equal shares or through a creditor)
Budget
