MODULE 2

Question 1

Define market research.

Answer 1

Market research is the process through which a firm engages its own resources or hires another fim to collect and analyse information about it’s customers, competitors and things that impact its ability to satisfy customers.

Question 3

What are 4 benefits of market research?

Answer 3

1. Gain insight on the NATURE of demand for your product
2. Allow for developing STRATEGIES for creating and controlling demand
3. Increases the likelihood of SUCCESS IN MARKETING
4. Learn about COMPETITORS

Question 4

Elements of market research

Answer 4

P- Product characteristics
P- Promotional strategy

C- Customer analysis
E-Expected Sales Trend
N- Nature of Competition
D- Definition of market

Question 5

What are the stages in market research

Answer 5

1. Develop a RESEARCH QUESTION
2. Develop a RESEARCH PLAN
3. Implement the RESEARCH PLAN
4. Analyse the DATA

Question 6

Define feasibility analysis

Answer 6

A feasibility analysis is defined as a systematic approach which critically looks at the proposed business and its enviroment.

Question 7

What are the benefits of a feasibility analysis?

Answer 7

1. Allows for the entrepreneur to improve odds of success
2. Allow the entrepreneur to face tough questions from investors

Question 8

What are 5 key elements of a feasiblity analysis?

Answer 8

1. Personality (SWOT Analysis)
2. Time
3. Operational
4. Cultural
5. Industry

Question 9

What is the main concept differenciating a feasibility anlaysis and market research?

Answer 9

The main difference is market research looks at the firms product and ability to compete WHEREAS a feasibility analysis looks at the proposed business as a whole.

Question 10

What are the two types of sources of funding?

Answer 10

1. Equity financing
2. Debt financing

Question 11

Define equity financing

Answer 11

Where the financer takes a share in ownership

Question 12

Define debt financing

Answer 12

Where the financer must be repaid with interest.

Question 13

Name an advantage and disadvantage of equity financing

Answer 13

Advantage: This doesn’t put pressure of the cash flow

Disadvantage: The entrepreneur has to relinquish total control of the venture

Question 14

Name an advantage and disadvantage of debt financing

Answer 14

Advantage: It does not take control of the business

Disadvantage: A burden is placed on the cash flow of the firm

Question 15

What are 3 sources of Debt financing?

Answer 15

Loans, leases and mortgages, overdrafts

Question 16

What are 3 sources of equity financing?

Answer 16

Family and friends, crowd funding, private placements

Question 17

What are the accounting cycle steps?

Answer 17

Collecting business documents THEN Preparing journal entries THEN Posting entries to ledger THEN Extracting the trial balance THEN Preparing fiinancial statements

Question 18

Define a statement of Cash Flow?

Answer 18

This summarizes an entreprenuers cash position for a specific period of time. It looks at the money spent, acquired and currently on hand

Question 19

What are the Elements of a Cash FLow statement ?

Answer 19

1. Operating (cash from main profit making activities)
2. Investing (sale or purchase of fixed assets)
3. Financing (borrowing money or selling stock)

Question 20

Define a Statement of comprehensive income.

Answer 20

This records the revenue and expense of a business at a point in tiem

Question 21

What are the elements of the statement of comprehensive income

Answer 21

1 Revenue/ Cost of Sales/ selling expenses

Question 22

Define a statement of financial position (balance sheet)

Answer 22

This shows the firms assets and liabilities and owners equity

Question 23

Define a break even analysis

Answer 23

This determines the volume of sales required for the business to stay afloat in the long run