Explore topic-wise InterviewSolutions in .

They could be:

(i) Consumers goods

(ii) Producers goods

(iii) Services.

A business plan is a comprehensively written down document prepared by the entrepreneur describing formally all the relevant external and internal elements involved in starting a new venture.

The organizational plan is that part of the business plan which describes the proposed venture’s form of ownership

Organizational plan includes the following: 

(i) The terms and conditions associated with the selected form. 

(ii) Lines of authority and responsibility of members of the new venture. 

(iii) The names, designation, addresses and resumes of the members. 

(iv) Stake of members in the organization. 

(v) Roles and responsibilities of each member. 

(vi) Procedure for solving conflicts/ disputes amongst members. 

(vii) Forms of payment for the members of the organization. 

(viii) Voting rights, managerial and controlling rights of the members.

Following are the objectives of operation plan: 

(i) Advance production: For production in advance of operations, 

(ii) Exact route: Establishing the exact route of each individual item, part of assembly, 

(iii) Dates: Setting, starting and finishing dates for each important assignment/ work. 

(iv) Orderly movement of goods:Regulating the orderly movement of goods through the entire manufacturing cycle i.e. right from procurement of all materials to the shipping of finished goods.

Following are the choices available-to a businessman: 

(i) Sole proprietorship: Sole proprietorship is a business unit whose ownership and management are vested in one person. The individual assumes all risks of loss or failure of the enterprise and receives all profits from its successful operations. 

(ii) Partnership: A partnership is an association of two or more persons to carry on, as coowners, a business and to share its profits and losses. 

(iii) Joint Hindu family: Joint Hindu family or Hindu Undivided Family Business is a unique form of business organisation prevailing only in India. The HUFs have been defined under the Hindu law “As a family, which consists of male lineally descended from a common ancestor and included their wives and unmarried daughters.” 

(iv) Co-operative organizations: Co-operation is a form of organisation where in persons voluntarily associate together as human beings on the basis of equality for the promotion of the economic interest of themselves.” Its main motive is mutual help and works with the principle of ‘Each for all’ and ‘All for each’. 

(v) Corporation/Joint Stock Company: A joint stock company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.

Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by the Income Tax Department. It is required because it enables the department to link all transactions of the enterprise with the department. These transactions include tax payments, TDS/ TCS credits, returns of income/wealth/ gift/FBT, etc.

Operation plan is a system whereby there is achieved a smooth and coordinated flow of work within the factory so that, by planning and control of all the productive operations in all the stages of manufacture, the final product is completed in accordance with the plans.Wright Following are the elements of operation plan: 

(i) Routing: It is a process which determines the exact path a product has to follow right from raw material till its transformation into finished product. 

(ii) Scheduling: It means fixation of time, day, date when each operation is to be commenced and completed. 

(iii) Dispatching: It is the process of initiating production according to pre-conceived production plan. It involves issuing necessary orders instructions, guidelines, etc. 

(iv) Follow-up: It relates to evaluation and appraisal of work performed.A properly planned follow-up procedure is helpful in finding errors and defects in the work. 

(v) Inspection: Inspection is the art of comparing materials, product or performance with established standards. This helps to set up laboratories or evolve methods to ensure predetermined quality of product. 

(vi) Shipping: It describes the flow of goods/services from production to the consumers. It is a detailed presentation by the entrepreneur explaining the chronological steps in completing a business transaction efficiently and profitably.

Financial plan is a process of determining firm’s financial needs or goals for the future and the means to achieve them. 

Objectives of financial plan:

(i)To assess the amount of finance needed by enterprise.

(ii)To develop suitable capital structure for the enterprise.

(iii)To make the policies related with the finance for the enterprise.

(iv)To safeguard the enterprise for financial risk.

Following are the major financial items that should be included in the financial plan:

(i) Proforma Investment Decisions

(ii) Proforma Financing Decisions

(iii) Proforma Income Statements

(iv) Proforma Cash Flow

(v) Proforma Balance Sheet

(vi) Break-even analysis

(vii) Economic and Social Variables

Following are the elements of operation plan: 

(i) Routing: It is a process which determines the exact path a product has to follow right from raw material till its transformation into finished product. 

(ii) Scheduling: It means fixation of time, day, date when each operation is to be commenced and completed. 

(iii) Dispatching: It is the process of initiating production according to pre-conceived production plan. It involves issuing necessary orders instructions, guidelines, etc. 

(iv) Follow-up: It relates to evaluation and appraisal of work performed. A properly planned follow-up procedure is helpful in finding errors and defects in the work. 

(v) Inspection: Inspection is the art of comparing materials, product or performance with established standards. This helps to setup laboratories or evolve methods to ensure predetermined quality of product. 

(vi) Shipping: It describes the flow of goods/services from production to the consumers. It is a detailed presentation by the entrepreneur explaining the chronological steps in completing a business transaction efficiently and profitably.

A business plan is a comprehensively written down document prepared by the entrepreneur describing formally all the relevant external and internal elements involved in starting a new venture. 

The business plan: 

(i) Viability: It helps in finding the viability of the venture in a designated market 

(ii) Guidance: It helps in providing guidance to the entrepreneur in organizing, planning activities as such: 

(a) identifying the resources required 

(b) enabling obtaining of licenses if required, etc. 

(c) working out with legal requirements. 

(iii) Queries: It helps in satisfying the queries, and issues of each group of people interested in the venture. 

(iv) Evaluation: It provides room for self¬assessment and self-evaluation. 

(v) Planning: It helps entrepreneur to plan ways to avoid obstacles. 

(vi) Obstacles: It helps to realize the obstacles which cannot be avoided or overcome, suggesting to stop the venture while still on paper without investing further time and money. 

(vii) Credit history: It reflects the entrepreneur’s credit history, the ability to meet debt and interest payments, and the amount of personal equity invested.