Podcast
Questions and Answers
What is a primary requirement for setting up a home-based business?
What is a primary requirement for setting up a home-based business?
Which type of business typically requires the smallest amount of capital to start?
Which type of business typically requires the smallest amount of capital to start?
What does fixed capital primarily refer to?
What does fixed capital primarily refer to?
Why might a service business initially require minimal capital?
Why might a service business initially require minimal capital?
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What does working capital refer to?
What does working capital refer to?
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In terms of regulation, which type of business generally faces the least governmental oversight?
In terms of regulation, which type of business generally faces the least governmental oversight?
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What is an essential aspect to consider when managing boundaries in a home-based business?
What is an essential aspect to consider when managing boundaries in a home-based business?
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Which of the following describes organization costs?
Which of the following describes organization costs?
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What is the primary objective of facility layout planning in a manufacturing context?
What is the primary objective of facility layout planning in a manufacturing context?
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Which of the following is NOT a focus of job planning or job design?
Which of the following is NOT a focus of job planning or job design?
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In the context of the 4P's of marketing, which element directly refers to the methods of reaching customers?
In the context of the 4P's of marketing, which element directly refers to the methods of reaching customers?
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Which type of selling involves one-on-one interaction between seller and potential buyer?
Which type of selling involves one-on-one interaction between seller and potential buyer?
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What aspect of financial planning is primarily concerned with the duration of capital use?
What aspect of financial planning is primarily concerned with the duration of capital use?
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Which factor is typically NOT considered crucial for successful home-based business planning?
Which factor is typically NOT considered crucial for successful home-based business planning?
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What is one key benefit of fixed capital in a startup business?
What is one key benefit of fixed capital in a startup business?
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Which of the following is not a concern of business boundary management?
Which of the following is not a concern of business boundary management?
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What is one primary consideration in the financial plan for a business?
What is one primary consideration in the financial plan for a business?
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Which type of financing is recommended for purchasing fixed assets?
Which type of financing is recommended for purchasing fixed assets?
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What is a vital requirement for writing contracts or agreements in a business?
What is a vital requirement for writing contracts or agreements in a business?
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Which type of loan is typically sought from relatives and friends?
Which type of loan is typically sought from relatives and friends?
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What should be done with borrowings needed for working capital?
What should be done with borrowings needed for working capital?
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What type of financial source is NOT typically available to entrepreneurs?
What type of financial source is NOT typically available to entrepreneurs?
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Which factor is crucial to determine before borrowing funds for a business?
Which factor is crucial to determine before borrowing funds for a business?
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What is a good practice regarding contingency planning in a financial plan?
What is a good practice regarding contingency planning in a financial plan?
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Study Notes
Home-based Businesses
- When a business is home-based, clear physical and time boundaries should exist between the business and home.
- The business area within the home should be defined, and work hours should be communicated to employees and clients.
Business Planning
- Businesses need to consider their financial requirements depending on their nature and products.
- Direct door-to-door sales may require minimal capital for the sales agent/trader.
- Manufacturing businesses require significant capital.
- Service businesses may start with a personal service approach, requiring minimal capital, but capital needs increase as the business grows.
Financial Requirements
- Fixed Capital: used for assets with a long lifespan, such as land, buildings, equipment, furniture, and tools.
- Working Capital: used for day-to-day operations until regular business income arrives.
- Organization Costs: cover legal and accounting expenses associated with establishing the business, including registration fees and contracts.
- Contingencies: a reserve for unforeseen expenses or events.
Sources of Cash
- Personal funds of the entrepreneur
- Loans from relatives and friends
- Loans from banks and other lending institutions
- Investors
- Government assistance programs
- Non-Government Organizations (NGOs)
Sound Financing Rules
- Know the cash requirements of the business.
- Understand the best loan terms available.
- Determine how and when to repay loans.
- Owners' investments should exceed borrowings.
- Fixed assets should be financed with long-term borrowing, and working capital with short-term borrowing.
Facility Layout Planning
- Objective: ensure a smooth workflow.
-
Considerations:
- Output and flexibility of the system
- Product and service demand
- Number and volume of operations
- Space availability
Job Planning/Job Design
- Objective: Create job structures that meet both organizational requirements and employee needs.
-
Considerations:
- Tasks to be performed
- Worker qualifications
- Physical location of the job
- Working hours
- Reason for hiring
- Performance measurement
- Employee motivation
- Training
Marketing
-
4 Ps of Marketing:
- Promotion
- Product
- Price
- Place
Promotion
- Personal Selling: Involves direct communication between sellers and potential buyers.
- Mass Selling: Communicating with a large group of buyers, using methods such as advertising or publicity.
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Description
This quiz covers the fundamentals of running a home-based business, including the importance of setting clear physical and time boundaries. It also explores financial requirements for different types of businesses, detailing fixed and working capital needs.
