Business Management Chapter 3 4 Revision Questions Essay

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Business Management- Chapter
3+4 Revision Questions
By Eliza-lee Fa’aosofia Tamati

What is a business plan?

A business plan is a written statement of the business goals and objectives, and the steps to be taken to achieve them

Identify and briefly explain the different sections in a business plan

1. An executive summary, one page document describing the business and its objectives. This is usually prepared at the end of the plan-writing process

2. An operations plan- outlining how the business will be set up and the human recourse needs

3. A financial plan- which details how the business will be financed, and projected cash flow, revenue, expenses and profit

4. A marketing plan- outlining key information from the industry the business will be entering and how it fits in, and the marketing strategy of the business

List the main benefits of completing a business plan

1. Helps test the viability of the business

2. Assists the business to be proactive rather than reactive

3. Assists in maintaining the business operation, especially focusing attention on the foals and objectives

4. Indicates the owner’s ability and level of commitment

5. Forces the small business owner to justify his or her plans and actions

6. Identifies the business’s strengths and weaknesses Outline the difference between human and physical resources

Human recourses- the employees who provide their time, energy, skills and effort. This recourse needs to be paid for as the service is provided

Physical recourses- equipment such as a computer, machinery, office equipment and stock. These resources, referred to as assets, are purchased as they are needed

What is the main purpose of a financial plan?

The main purpose of a financial plan involves the finances required to commence and operate

What is the purpose of a market analysis?

What two crucial financial questions should the small business owner ask when commencing a business?

1. How much money will I need to commence operation

2. Where will I get the money

Explain the difference between equity and debt Equity refers to the funds contributed by the owners of a business to commence and build the business.
Debt refers to the funds provided by sources outside the business, which must be paid back over time with interest

What is the main purpose of the marketing plan? The main purpose of a marketing plan is to outline the execution of conception, pricing, promotions and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives

Outline the five steps in the marketing planning process

1. Analyze the market that the business is planning to enter

2. Establish a marketing objective in which a statement is made of what the business expects to achieve through it’s marketing objective 3. Identify target markets which refer to the business’s intended customers

4. Develop marketing strategies which involves establishing a plan to achieve certain objectives

5. Manage the marketing effort, which involves the process of monitoring and modifying the marketing plan

The purpose of a market analysis is to carefully analyze the marker that the business is planning to enter

Define target market

The target market refers to the group if customers to which the business intends to sell it’s products to

Explain the four P’s of marketing

1. Product- this refers to a combination of variables, customers will buy products that satisfy their needs and provide positive feelings

2. Price- this refers to the amount in which the products are being sold for

Why should business owners constantly evaluate their business performance? What is a qualitative measure?

Qualitative measures refer to the observation and is based on the quality and characteristics

What is a quantitative measure?

Quantitative measure refers to the measurement of the facts and figures

What is a performance indicator?