M2

Question 1

What is a business plan?

Answer 1

• a document of communication aimed at a target audience
• It describes the product/service, prospective customers, competition, production, and marketing methods, management team, financings, pricing, distribution strategy, objectives
• “A business plan is a fund-raising document for presentation to investors, financial institutions, and other sources of capital”

Question 2

Why is a proper business plan important?

Answer 2

• it forces management teams to examine their goals, objectives, strengths, weaknesses, opportunities, and threats
• forces owner to consider how to use its financial resources based on current situation and further growth
• consider risks vs reward
• efficient allocation of scarce resources and logical decision making

Question 3

How does a firm generate revenue?

Answer 3

-Firm must offer products/services that creat value