Lessons 1, 2, and 3: BUSINESS PLAN PREPARATION AND WRITING Flashcards
1
Q
It is essential for an entrepreneur to have a thorough understanding of
his/her customers because one of the key to the success of the business is being
able to meet customers’ needs.
A
Target Market
2
Q
A business plan writer should analyze the environment in which they anticipate operating at each of the levels of analysis:
A
- Societal
- Industry
- Market
- Firm
3
Q
This section briefly describes the market segment and the techniques
employed to reach this market segment.
A
Marketing
4
Q
In the industry analysis section of the business plan, the writer needs to do some research and focus on the following:
A
A description of the industry
Current trends in the industry
Strategic opportunities that exist in the industry
5
Q
A Business plan is what
would assist you in assessing the efficiency of your strategies for achieving business
goals
A
Gauging business strategy and applying due correction
6
Q
In a financial plan, all the statements prepared are
projections or expectations of what the enterprise intends to sell or to spend
A
Financial statements
7
Q
a variety of other operational concerns may also be
highlighted such as protecting the safety of workers
A
Other operational issues
8
Q
This section states expected revenues and profits for this year, next year, and for five years in the future.
A
Financial features
9
Q
This section of the financial plan will simply indicate where the funds for the business will come from
A
Source of financing
10
Q
STEPS IN BUSINESS PLANNING:
A
- Evaluate your personal resources and interests, and the resources of the community.
- Analyze your market.
- Choose a proper business location.
- Prepare a financial plan
- Prepare a production plan.
- Prepare an organizational plan.
- Prepare a management plan.
11
Q
key to success for every business
A
Management
12
Q
It briefly describes the background and
responsibilities of the founders, managers and employees of the company
A
Management
13
Q
OBJECTIVES OF BUSINESS
PLAN
A
- Dedicating enough time for planning
- Create goals and objectives
- Evaluating performance
- Gauging business strategy and applying due correction
- Arranging financial resources
- Stay consistent
- Keep your goals ‘SMART
- Performing SWOT
- Marketing Analysis
14
Q
Importance of Preparing a Business
Plan
A
- A business plan enables an entrepreneur to make mistakes on paper, rather than in the marketplace
- Once completed, a business plan will make an entrepreneur feel more confident about his/her ability to set up and operate the venture.
- The business plan will show how much money is needed, what it is needed for and when, and for how long it is required.
- Preparing a business plan will provide an insight into the planning process.
- Through the business plan, the entrepreneur can plan for the lean months and ensure that the business will have enough resources to meet business obligations
- Having a business plan helps an entrepreneur define and focus on his/her business
ideas and business strategies. - A business plan will enable an entrepreneur to set targets in terms of sales volume
and revenues, as well as expenses, among others.
15
Q
A business plan can be much helpful and instrumental in acquiring adequate business financing. Like we stated already, banks
and lenders look for a proper business plan before lending you any sort of finance
A
Arranging financial resources
16
Q
A business needs proper planning and control over the
activities for enhanced performance
A
Evaluating performance
17
Q
What does ‘SMART’ stand for?
A
(Specific, Measurable, Actionable, Realistic, and TimeBound)
18
Q
Important elements to be considered in preparing the operations section:
A
- Facilities
- Production
- Inventory control
- Supply and distribution
- Order fulfilment and customer service
- Research and development
- Financial control
- Other operational issues
19
Q
key aspects of an enterprise:
A
- Business goals and strategies to meet them
- Competitive edge and how to leverage it
- Potential problems and how to solve them
- Funding required to start the business
- Equipment, facilities, and manpower needed for operations
20
Q
This is the most crucial part of the business plan. The tone of this section will depend on
who the recipient of the business plan is.
A
Financial Plan
21
Q
A business plan writer should analyze the environment in which they anticipate operating at each of the levels of analysis: Societal, Industry,
Market, and Firm. This stage of planning is called?
A
Essential Initial Research
22
Q
Some of the aspects to be
considered in the evaluating sales process include:
A
Cold-calling
Leads
Productivity
Order-fulfilment
Goals
Follow-up efforts
23
Q
What are the customer perception factors?
A
Product/service features
Indirect/peripheral costs
Quality
Durability/maintenance
Image/style/perceived value
Customer relationships
Social image
24
Q
one of the best options you would want to go with when it comes to focus on an effective business plan
A
SWOT Analysis
25
discusses the problems an
NGO is trying to solve through a certain project, as well as how it will do that and
how much resources are needed
non-profit business plan
26
Other key elements found in "company description":
- Company name
- Legal form of business (sole proprietorship, partnership, or corporation)
- Management/leadership
- Business location
- Development stage
- Financial status
- Products and services
- Patents and licenses
27
This is the section of a business plan that requires the least amount to prepare.
Company Description
28
Must look into the various stages involved in creating the product or service
Production
29
Like social enterprises, non-governmental
organizations (NGOs) can also use business plans to source funds for their
campaigns and projects.
Non-Profit Organizations/NGOs
30
Internal operational factors that increase competitiveness:
Financial resources
Marketing program/budget
Economies of scale
Operational efficiencies
Product line breadth
Strategic partnership[s
Company morale/personnel
31
if the banker gets bored while reading the business plan, it is unlikely to
get a favorable response
Brevity
32
The characteristics meaningfully relate to the decision to purchase
Meaningful
33
COMPONENTS OF A BUSINESS PLAN:
1. Executive Summary
2. Company Description
3. Industry Analysis
4. Target Market
5. The Competition
6. Marketing Plan
7. Operations Plan
8. Management and Organization
9. Financial Plan
34
A business plan can be realistic without appealing to potential investors and other external stakeholders, like employees, suppliers, and needed business partners.
Making Plan Appeal to Stakeholders and Desirable to the Entrepreneur
35
Different marketing tactics can also be employed in addition to marketing vehicles:
- Media advertising
- Customer-based marketing
36
the banker or investor is more interested with numbers. Hence, a clear explanation is important
Figures
37
This approach is more likely to tell the reader a story.
The Narrative Summary
38
a document in which a business opportunity is identified, described
and analysed, examining its technical, economic and financial feasibility.
business plan
39
It should have specific characteristics identifying what the potential customers have in common
Definable
40
The final stage involves putting the important finishing touches on the business plan so that it will present well to potential investors and others.
Finishing the Business Plan
41
What are some marketing vehicles that can be used?
Brochures
Print media
Broadcast media
Advertising specialties
Direct mail
Public relations
Sampling
Informal marketing/networking
42
Five business plan credibility principles that writers should consider.
- Business plan writers should build and establish their credibility
- Writers need to elaborate on the plans they outline in their document
- To build and establish credibility, they must integrate scenarios
- Writers need to provide comprehensive and realistic financial links
- They must outline the deal, or the value that targeted readers should expect
43
This section describes how the products are made or services are delivered, how orders are fulfilled, how quality standards are assured and how outputs are met.
Operations Plan
44
An industry consists of all
companies supplying a similar product or service, other businesses closely related
to that product or service, and supply and distribution systems supporting such
companies.
Industry Analysis
45
Criteria of Effective Planning:
- The plan should clearly state its objectives
- The plan should provide measures for a satisfactory accomplishment
- The plan should state the policies
- The plan should indicate what department or unit would be involved
- The plan should indicate time
- The plan should specify the required resources
- The plan should designate the officers
46
Five F’s that are
a convenient way to sum up what customers want:
1. Functions
2. Finances
3. Freedom
4. Feelings
5. Future
47
Not only do start-ups gain advantage from a business plan—
existing enterprises need it, too. But business plans for growing businesses serve a
different purpose.
Existing Businesses
48
The definition of the target
market must meet the following criteria:
1. Definable
2. Meaningful
3. Sizable
4. Reachable
49
The four general sectors of industry analysis are:
1) service
2) manufacturing
3) retail
4) distribution
50
It is more straightforward and it simply relates, in
abbreviated fashion, the conclusions of each section of the completed business
plan.
The Synopsis Summary
51
needs to prepare a business plan to achieve its social objectives and
keep empowering the communities it’s supporting.
Social Enterprises
52
the language used in the business plan should be kept simple and should avoid trying to get too many ideas into one sentence
Clarity
53
Inherent in any business plan is a description of the ___________ chosen by the entrepreneur as the one that they feel will best ensure success.
Business Model
54
the most important person in a business is the
founder/s, especially for start-up companies
Key employees/principals
55
It simply refers to the clientele of the business enterprise
Market
56
Both the definition and size must lead to affordable and
effective ways to market to the potential customers
Reachable
57
This should be yet another objective that a business plan needs to
be focused with is being consistent.
Stay consistent
58
This portion identifies the current stage (e.g., start-up
development, turn around) of the business.
Strategic Direction
59
It must be large enough to profitably sustain the business
Sizable
60
We mean your goals in the business plan should be S-M-A-R-T (Specific, Measurable, Actionable, Realistic, and TimeBound) to achieve success.
Keep your goals ‘SMART’
61
One of the approaches to inventory management is “just-in-time” inventory control.
Inventory control
62
Many investors read the ____________ portion first or second because they want to know that the entrepreneur has a realistic and price-conscious plan
Marketing Plan
63
entities that benefit much
from business planning:
* Start-ups
* Existing Businesses
* Social Enterprises
* Non-Profit Organizations/NGO
64
The business plan will be used as a ________________ for how to
structure, run, and grow the new business.
roadmap
65
This section answers questions, such as: for debt
funding, what will be used as collateral?
Financial Arrangement/Exit.
66
STAGES OF BUSINESS PLAN DEVELOPMENT:
1. Essential Initial Research
2. Business Model
3. Initial Business Plan Draft
4. Making the Business Plan Realistic
5. Making Plan Appeal to Stakeholders and Desirable to the Entrepreneur
6. Finishing the Business Plan
67
Characteristics of a Sound Business Plan
* Clarity
* Brevity
* Logic
* Truth
* Figures
68
The five most important elements of management style:
a) Clear policies
b) Communication
c) Employee recognition
d) Employee’s ability to affect change
e) Fairness
69
This is the most important portion of a business plan because it is the part that
persuades a reader to spend time to find out about the different aspects of the business venture
Executive Summary
70
They suggested that business plan writers must strive to
effectively communicate their expectations about the nature of an uncertain future and
to project credibility.
Hindle and Mainprize (2006)
71
What are some financial
statements?
Profit and Loss Statement (P&L) or Income Statement
Balance Sheet or Statement of Financial Position
Cash Flow Statement
72
It basically consists of computations of profitability, liquidity, and marketability of the enterprise based in the information from the P&L and the balance sheet.
Financial Analysis
73
the entrepreneur should not overstate his/her case
Truth
74
The entrepreneur must always be updated with
new developments that are going to affect the business
Research and development
75
Elements in the financial plan:
- Source of financing
- Financial statements
- Financial Analysis
76
It involves taking the knowledge and ideas developed during the first two stages and organizing them into a business plan format
Business Plan Draft
77
What details should be at the top page of the executive summary?
* Company name, address, phone number
* Name and position of contact person at your company
* Date of preparation of the business plan
78
As the entrepreneur writes the plan, it will necessarily change as new information is gathered.
Making the Business Plan Realistic
79
In evaluating the management team, the following personnel are to be included:
Key employees/principals
Board of directors
Advisory committee
Consultants and other specialists
Key management personnel to be added
80
An organization depends heavily on the business plan to arrive at the description of business it performs.
Create goals and objectives
81
set up procedures to ensure that financial information is
handled promptly and accurately.
Financial control
82
A workable business plan cannot be created overnight. It is bound to take its own time to develop.
Dedicating enough time for planning
83
an entity that benefit much
from business planning where the classic business plan writer is
an entrepreneur of a start-up business seeking
sources of funds to begin their new venture,
Start-ups
84
This briefly describes the nature of your product or
service, unique selling proposition (for goods) or unique selling features
Description of the Business
85
the facts and ideas presented will be easier to take in and make more
impact if they follow one another in a logical sequence.
Logic
86
Considering the location, terms and length of lease, improvements,
and utilities/maintenance
Facilities
87
Marketing forms an integral part of a business and so does with
the business plan
Marketing Analysis
88
Assess the methods by which goods are prepared and delivered to customers.
Order fulfilment and customer service
89
Select suppliers that understand the business’ needs, and ensure reliable distribution.
Supply and distribution
90
PRINCIPLES OF BUSINESS PLANNING:
- Planning must be realistic
- Planning must be based on felt needs
- Planning must be flexible.
- Planning must start with simple projects.
