Chapter 7: Business Plans

Question 1

What is a Business plan ?

Answer 1

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

Question 2

What are the reasons for a business plan ?

Answer 2

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 .

Question 3

How should the business plan look ?

Answer 3

Is it logically set out and easy to follow
Includes relevant details and excludes uncessary details
Is neat and free of errors

Question 4

Why is a business plan important ?

Answer 4

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 .

Question 5

What is USP ?

Answer 5

Unique Selling Preopostion

Question 6

What is the format of the business plan

Answer 6

Cover page
Contents pages
Executive Summary
Objectives of the business and SWOT analysis
the Financial plan
Production plan
Marketing plan
Human resources
SWgummary
Appendices

Question 7

what is the cover page and what does it have

Answer 7

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 .

Question 8

what is the content page and what does it have

Answer 8

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

Question 9

what is the executive summary and what does it have

Answer 9

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 )

Question 10

Name the 3 types of forms of ownership

Answer 10

Sole trader or sole propietor
Partnership
Company limited

Question 11

What is a sole trader ,partnership and company

Answer 11

Sole trader - 1 owners
Partnership -2 -20 owners
Company - 20 - unlimited

Question 12

What is the difference between a slogan and logo ?

Answer 12

A logo is a picture representation while a slogan is a catch phrase which is identified with the business

Question 13

What is an organic gram /organagram

Answer 13

hierarchy of employment in a business

Question 14

What does SMART stand form

Answer 14

S- specific
M- measurable
A- achievable
R- relavant
T- timeous

Question 15

What does timeous mean

Answer 15

time limit to reach goal

Question 16

what does relevant

Answer 16

has to do with industry business is in

Question 17

What is stragetic planning

Answer 17

Vision, mission , Goal and Objectives

Question 18

Name the factors regarding location of the business

Answer 18

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

Question 19

True or False business needs to do market research

Answer 19

True

Question 20

What does market research involve

Answer 20

A smart strategic plan

Question 21

What is a the business vision ?

Answer 21

Vision is the direction that business aims for or see themselves in the future

Question 22

What is a the business mission ?

Answer 22

Daily actions to achieve vission or core activities and values of the business

Question 23

What is a the business objectives ?

Answer 23

Short term tasks to reach your goal or SMART

Question 24

What is a the business goal ?

Answer 24

Long term tasks

Question 25

What must the business idea be

Answer 25

feastiable and visiable

Question 26

Why must the business idea be feastable and visiable ?

Answer 26

Feastable - is it a workable idea that can be practically implemented Visable - Will business be able to generate and maintain profits from this idea

Question 27

True or False : Strengths and weakness are external

Answer 27

False they are internal

Question 28

True or False : Threats and opportunites are external

Answer 28

True

Question 29

What are the elements of the SWOT analysis

Answer 29

Strengths ,Weakeness , Opportunites and Threats

Question 30

What is the difference between tanagible and intangible

Answer 30

Tangiable is a physical thing you can see and Intangiable is not a physical thing but has value

Question 31

Name some examples of strengths or weaknesses

Answer 31

Location, Employees skills,Business Culture , UPP, Operational efficentcy and quality

Question 31

What does UPP stand for

Answer 31

Unique Product Patented

Question 32

What are the factors affecting opportunites and threats

Answer 32

PESTLE elements

Question 33

What are the PESTLE elements

Answer 33

P-Politcal E-Economic /Ethics S- Social T- technological L- Legal E- Enviromental

Question 34

What is a contingency plan ?

Answer 34

a plan designed to take account of a possible future event or circumstance

Question 35

What enviroment is the PESTLE elements

Answer 35

Marco environment

Question 36

What are possible examples of opportunities and threats

Answer 36

Current competitors Consumers Suppliers Substitute goods New competitors

Question 37

True or False : Poor financial planning is one of the biggest causes of business failure

Answer 37

True

Question 38

True or False : all the financial aspects that may influence a business both negatively and positively

Answer 38

True

Question 39

What is the difference between own and borrowed capital ?

Answer 39

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

Question 40

What is a fixed cost ?

Answer 40

stays the same regardless of input e,g rent ,insurance

Question 41

what is a variable cost ?

Answer 41

costs that change according to input e.g water and electricity

Question 42

What is long term / fixed capital

Answer 42

capital used to purchase non-current assets like vehicles and equipment

Question 43

What is working capital ?

Answer 43

Working capital is used to purchase trading inventory and to have cash readily available for expenses and short term liabilities

Question 44

True or False : Start -up capital calculation is made when starting a business

Answer 44

True

Question 44

What information needs to be included in the production plan

Answer 44

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

Question 45

A Cash flow statement is also required in the financial plan what is another name for this

Answer 45

Liquidity

Question 46

What statement is in the production plan

Answer 46

Production Cost Statement

Question 47

What needs to be included in

Answer 47

Needs to include fixed costs and variable costs

Question 48

Name the 3 methods of production

Answer 48

Mass Batch Jobbing

Question 49

Name the 2 types of quality control

Answer 49

Sampling and SABS

Question 50

What does SABS stand for

Answer 50

South African Bureu of Standards

Question 51

What is the break even point

Answer 51

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

Question 52

True or False :some products are a combination of all production methods

Answer 52

True e.g Cars

Question 53

True or False : a business needs to include a break -even analysis in the production plan

Answer 53

True

Question 54

Explain the difference in Mass ,Batch and Jobbing

Answer 54

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

Question 55

What is in the marketing plan

Answer 55

will provide information regarding market research that was conducted to determine certain things

Question 56

What does market research help determine

Answer 56

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

Question 57

What are the Four P,s policy in the marketing plan

Answer 57

Product policy Pricing policy Place policy promotion policy

Question 58

What is involved in the Product policy

Answer 58

Details of product/service how the product will be packaged how brand loyalty will be assured

Question 59

What is brand loyalty ?

Answer 59

When consumers choose your product over those of other competitors

Question 60

What is involved in the Pricing policy

Answer 60

Factors that may affect the price of the product How the price will be determined/calculated

Question 61

What are the different pricing stragerics

Answer 61

Low cost stragery Price skimming Penetraction

Question 62

Explain the low cost strategy

Answer 62

Low prices - like pep

Question 63

Explain the price skimming strategy

Answer 63

From high to low prices

Question 64

Explain the Pentetration strategy

Answer 64

From low to high / physiological pricing R 99.99 instead of 100

Question 65

What is involved in the Place policy

Answer 65

will the product /service be marketed directly to the consumer or will it be distributed to the wholesaler ,retailer or agents

Question 66

What is the other name of the place policy

Answer 66

Distribution Policy

Question 67

What is involved in the Promotion policy

Answer 67

how and where will the product be advertised how will sales promotion and personal selling techniques be used to communicate with the target market

Question 68

What is the other name of the promotion policy

Answer 68

marketing communication

Question 69

True or False : Human resource indicate how many people will need to be employed as well as the range of skills required

Answer 69

True

Question 70

True or False : Salaries and wages are included in the human resources

Answer 70

False ,Salaries and wages are found in the financial plan

Question 71

What does CSR stand for

Answer 71

Cooperate Social Responsibility

Question 72

Name 3 examples of CSR

Answer 72

recycling or R2 for hope at KFC or donating to charity

Question 73

What does the summary in the business plan include

Answer 73

The business plan should conclude on a positive note including details regarding the contribution that the business will make towards the broader community

Question 74

What is an appendices in the business plan

Answer 74

its where additional information that was not originally included in the business plan is included

Question 75

What are examples of things to put in appendices

Answer 75

Design of the shop Employment contract Glossary

Question 76

True of False : A business is a cooperate citizen

Answer 76

True

Question 77

What is the triple bottom line

Answer 77

Profit People Planet

Question 78

True or False : Salaries and wages are the largest expense in the financial section of the business plan

Answer 78

True