Feasibility Study and Business Plan Basics

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Questions and Answers

What is required before an employee can be dismissed from work?

A written notice two weeks in advance

A verbal warning from the employer

A just or authorized cause and due process (correct)

Approval from coworkers

How many hours constitute a standard workday, including breaks but excluding meal periods?

8 hours including a break of under one hour but excluding a meal period of at least one hour (correct)

7 hours with one and a half hours for breaks

8 hours with no break included

8 hours with one hour for meals

Which of the following is NOT a component of wage-related benefits?

Overtime pay

Rest day pay

13th month pay

Commission from sales (correct)

Which factor is included in determining the financial requirements for starting a business?

Estimating operational costs Signup and view all the answers

What approach is emphasized regarding competition in the business environment?

Compete fairly in the market Signup and view all the answers

Which demographic factors are essential for grouping potential customers?

Age, gender, income Signup and view all the answers

What is a significant aspect to consider when identifying competitors?

Their profitability levels Signup and view all the answers

What should be included in a pricing policy?

Production and distribution costs Signup and view all the answers

Which of the following is NOT a method to determine marketing methods?

Employee training methods Signup and view all the answers

When identifying material requirements, what should be excluded from the list?

Indirect materials Signup and view all the answers

What is the primary goal of determining the process and equipment for manufacturing a product?

To ensure quality and efficiency Signup and view all the answers

Which position should be included when determining key personnel?

Owner and manager Signup and view all the answers

Which factor is crucial for evaluating competitors' operating methods?

Advertising and promotion strategies Signup and view all the answers

What is the purpose of registering a business name with the Department of Trade and Industry (DTI)?

To ensure legal protection against name duplication Signup and view all the answers

Which of the following is NOT a requirement for registering a single proprietorship?

Filing a Partnership Agreement Signup and view all the answers

Which statement about business name registration for corporations is true?

It is optional and varies based on the type of business entity. Signup and view all the answers

What essential right do employees have regarding compensation?

Equal compensation regardless of gender Signup and view all the answers

What is a fundamental aspect of hiring and training personnel?

Security of tenure for every employee Signup and view all the answers

Which document is typically required for registering a corporation?

Articles of Incorporation Signup and view all the answers

What is one of the key considerations for choosing the site/location of a business?

Accessibility to employees and customers Signup and view all the answers

When can business name registration be considered optional?

For partnerships and corporations Signup and view all the answers

What is the primary purpose of a feasibility study in business?

To assist in making a go/no go decision Signup and view all the answers

Which element is NOT a part of a business plan?

Detail hiring procedures Signup and view all the answers

What does strategic management primarily focus on?

Improving company performance Signup and view all the answers

Why is a business plan considered key to raising capital?

It provides a detailed operations guide Signup and view all the answers

Which of the following best describes the 'competitive advantage' in a business plan?

A unique feature that sets the product apart Signup and view all the answers

What is typically included in the 'describe the business' section of a business plan for an existing business?

Historical performance data Signup and view all the answers

Which of the following does a business plan NOT aim to address?

Employee training needs Signup and view all the answers

What is a critical first step for a new business when creating a business plan?

Describing the products or services Signup and view all the answers

What is the primary purpose of preparing a sales forecast for a business?

To project future sales performance Signup and view all the answers

How frequently should budget projections be prepared in the first year of operation?

Monthly Signup and view all the answers

Which of the following costs should be included in a service business's budget?

Operational and sales costs Signup and view all the answers

What is included in fixed capital requirements for a business?

Land and machinery costs Signup and view all the answers

What does working capital typically cover for a new business?

Expenses during the startup phase until self-sustaining Signup and view all the answers

Which action is NOT a part of starting your business as per the outlined plan?

Closing existing businesses Signup and view all the answers

Which type of capital covers expenses incurred before the business begins to operate?

Pre-operating capital Signup and view all the answers

What aspect is included in determining your financial requirements?

Assessing fixed and working capital needs Signup and view all the answers

Study Notes

What is a Feasibility Study?

A close examination to help decide if a business will succeed
It looks at product/service, market, industry, and finances
Helps make a "go/no-go" decision

What is a Business Plan?

Often used when a company begins
Helps define initial goals and objectives
Includes company structure, services, financial resources, staffing, and operational basics

Importance of a Business Plan

Saves time and money
Key to raising capital
Serves as an operations guide

Business Plan Components

State Business Objectives
Describe the business
- Explaining what the business will be, how the idea for your business was conceived and how the business is expected to develop
- Or for an existing business, business name, registration date and place, history, owners/partners and major investors.
Describe Products or Services
- Detailed description of the product or service
- Competitive advantage
- Identify competition
- Advantages and disadvantages of your product/service
Identify Your Potential Market
- Determine potential market size
- Group your customers into age, gender, income, education, and other demographic factors.
Identify Your Competitors
- Identify businesses likely to be competitors
- Competitors' assets and sales volume
- Competitors' profitability
- Competitors' operating methods (including pricing, quality, methods of selling/distribution, credit terms, advertising)
Pricing Policy
- Define the pricing structure based on production cost, distribution cost, and competitors' pricing.
- The goal is to maximize profit in the long run.
Determine Marketing Methods
- Promotion/advertising strategies
- How to sell the product and channels of distribution
- Customer feedback and how to improve the image as an enterprise.
Key Personnel
- Names and addresses of the owners and managers
- List partners or directors' details
Material Requirements & Sources of Supply
- List of direct materials needed, and where they will come from
- Main supplier and reason for choosing them
Production Process & Equipment
- Detailed explanation of the production process (include equipment and materials)
- Diagram of workflow
- Assign jobs and estimate the number of people required for each position
- Set salary rate.
Prepare a Sales Forecast
- Include a sales forecast for at least two years
- First year: monthly sales
- Second year: yearly sales
- Explain the reasoning and assumptions behind the figures.
Budget
- Create a budget for manufacturing (materials, labor, services, manufacturing overhead) or service operations (operational costs, sales costs, general and administrative expenses)
- Prepare monthly projections for the first year, and quarterly projections for the second and third years.
Set Your Plan to Work
- Raise funds
- Obtain licenses, purchase facilities and supplies
- Hire and train staff
- Begin operating
- Commit to working long hours and being dedicated to the business
Determining Financial Requirements
- Fixed Capital: land, building, machinery, equipment, furniture, fixtures (one-time expenses)
- Working Capital: money needed to run the business until it becomes self-supporting (1-6 months or longer)
  - Includes raw materials, worker pay, transportation, and utilities.
- Pre-operating Capital: money spent before the business begins operation
  - Registration, accountant fees, lawyer fees, consulting fees.

Registering your Business

Register with the Department of Trade and Industry (DTI)
DTI Bureau of Trade Regulation and Consumer Protection (BTRCP) handles business name registration
If single proprietor using a name different than your own, it must be registered with the DTI.
Business name registration with DTI is optional for partnerships and corporations.

Registration Requirements:

Single Proprietorship: DTI, Municipal/City Offices, Picture Registration Fee.
Partnership: Partnership Agreement, SEC Filing Fee, Legal Affairs Release.
Corporation: Articles of Incorporation and By-Laws, Articles of Incorporation Registration Fee, Release,
Cooperative: Economic survey, Articles of Incorporation, By-Laws, Registration Fee.

Hiring and Training Personnel

Importance of employees for business success.
Employees' rights:
- Equal work opportunities: male and female employees are entitled to equal compensation, promotion, and training opportunities. It is unlawful to discriminate against female employees
- Security of Tenure: No employee can be dismissed from work except for just cause and only after due process.
- Work Days and Hours: 8 hours per day, with breaks or rest periods.
- Wage and Wage Related Benefits: Overtime, night differential, rest day, holiday, and 13th month pay.
- Safe working conditions
- Rest days and holidays
- Right to self-organization and collective bargaining
- Worker’s participation and tripartism

Getting Your Business Started

Pay decent wages/salary
Provide value to customers
Compete fairly
Learn from mistakes
Be prepared for challenges ahead

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Description

This quiz explores the fundamentals of feasibility studies and business plans. It covers their importance, key components, and how they contribute to business success. Understand the essential elements that shape a solid business strategy.