Business Plan Essentials Quiz

Business Plan Components

• A business plan documents the business's nature, sales/marketing strategy, and financial background.
• It includes a projected profit and loss statement.
• A business name (BN) is any name used in connection with a business, different from the owner's true name, which is used on receipts or elsewhere.

Anatomy of a Business Name

• Dominant word: words or letter combinations without generic meaning.
• Descriptor: words describing the business nature.
• Infix: specialized descriptor differentiating business type.

Business Logo Types

• Font-based logos: company name in a distinct font.
• Literal illustrations: company name alongside an image relevant to the business (e.g., bread for a bakery).
• Abstract symbols: images immediately associated with the company brand (e.g., Nike swoosh).

Mission and Vision Statements

• Vision statement: answers "What do we want to become?" (short, preferably one sentence).
• Mission statement: declares the organization's reason for being, answers "What is our business?", and outlines the organization's objectives, strategies, and serves as a statement of purpose, philosophy, or beliefs.

Mission Statement Components

• Customers: identifies the target customer base.
• Products/services: lists primary products or services.
• Markets: geographical areas the business operates in.
• Technology: the company's technological infrastructure.
• Concern for survival, growth, and profitability.
• Philosophy: the core beliefs and values of the business.
• Self-concept: company's unique strengths and competitive advantages.
• Concern for public image: social and environmental responsibility.
• Concern for employees: employee value to the business.

Business Organizations

• Sole Proprietorship: one person owns and is personally liable for business debts.
• Partnership: two or more people own and are personally liable for business debts.
• Corporation: a separate legal entity, with shareholders not personally liable.

Organizational Planning

• Organization planning helps set priorities, manage energy and resources, and ensure employees and stakeholders work towards a common goal, while allowing adjustments to changing environments.
• Key aspects of organizational planning include destination, initial point, journey, and checkpoints.

Organizational Charts

• Visual representations of an organization's internal structure.
• Employees and positions are shown with lines connecting levels in the organization.
• Types include hierarchical, functional, geographical, product, matrix, horizontal/flat, network, line, team-based, functional, product-based, geographical, process-based, and circular structures.

Job Descriptions and Specifications

• Job descriptions detail the job's tasks, responsibilities, and duties.
• Job specifications outline the skills, experience, and qualifications required.
• Both are crucial for recruitment and selection processes.

Job Analysis

• A primary method for data collection for job descriptions and specifications.

Personnel Salary Structure

• Well-designed salary structure allows management to fairly reward performance and encourage skill development.

Gantt Charts

• Visual representation of project schedules including task assignments and timelines.

Total Quality Management

• A customer-focused organizational management system that involves all employees in continuous improvement.

Production/Service Check Sheets

• Simple form identifying quality issues at each work station, per shift, machine, or operator.

Production/Service Flowcharts

• Visual representation of tasks in a process, with steps shown in order.

Distribution Channel Strategy

• Distribution strategies describe how products move from producer to consumer.
• Four typical channel structures are Producer-Consumer, Producer-Retailer-Consumer, Producer-Wholesaler-Retailer-Consumer, and Producer-Agent-Wholesaler-Retailer-Consumer.

Marketing

• Organizational function creating, communicating, and delivering value to customers.

Marketing Mix

• A set of decisions businesses make to bring a product to market.
• Two main types are 4P's and 7P's, developed in the 1960s and 1980s respectively.

Pricing Strategies

• Penetration pricing: low price to achieve high volume.
• Market skimming: high initial price to maximize profit from early adopters.
• Value pricing: pricing based on perceived value.
• Loss leader: pricing below cost to encourage sales.
• Psychological pricing: prices ending in .99 or .95
• Competitor pricing: pricing similar to the competitor.

Packaging

• Packaging contains information about products, stands out from competitors, is functional, safe, easy to remove and promotes product benefits.

PESTLE Analysis

• An external analysis tool for identifying opportunities and threats from political, economic, social, technological, legal, and environmental factors.

Porter's Five Forces

• Analyzes the competitive intensity and attractiveness of an industry.
• Forces include buyer power, supplier power, threat of substitutes, threat of new entrants, and rivalry among competitors.

Porter's Generic Value Chain

• A framework that identifies activities that create value in a business.

SWOT Analysis

• An analysis tool that identifies a company's strengths, weaknesses, opportunities, and threats to guide decision-making.

Test your knowledge on the key components of a business plan, including the significance of business names, logos, and mission statements. This quiz covers the essential elements that every successful business plan should entail. Discover what makes a compelling vision and mission statement.