Entrepreneurship 1 Marks Question

Financial planning is deciding in advance how much to spend, on what to spend on the basis of availability of funds.

In order to build up loyal, efficient and dedicated personnel, the entrepreneur needs to address the following questions:

1. What kind of people does he/ she need?
2. How many people does he/ she need?

The person receiving guidance and advice is referred to as ‘mentee'.

The decision making by the entrepreneur, well in advance, regarding the future financial aspects of the enterprise, is called 'financial planning'.

Term loan.

"Strategy is the direction and scope of an organisation over the long-term; which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

The three basic resources needed by businesses are:

1. Land.
2. Labour.
3. Capital.

The sources of business finance can be classified as:

1. Internal source: This source comprises of entrepreneur's own savings.
2. External source: An entrepreneur can borrow or raise loans from relatives, friends or financial institutions.

Efficient utilisation of human resources is only possible if the entrepreneur is able to decide:

1. The total work to be done.
2. The right type of people who can do the work.
3. Employing right man at the right job.

Finance may be defined as the provision of money at the time as per the requirement.

The steps in the process of financial planning are as follows.

Resource is the economic or productive factor required to accomplish an activity.

A unit is known as ‘micro-business enterprise', if its investment in plant and machinery does not exceed ₹ 25 lakhs for manufacturing industries and ₹ 10 lakhs for service industries.

Sharesholders.

Internally generated funds come from several sources, such as:

1. Past savings, help from family members.
2. Retained profits.
3. Sale of assets.
4. Reducing working capital.
5. Forcing debtors to make early repayments or delaying payments to creditors.
6. Sale of less-used assets.
7. Procuring assets on rental or lease basis.
8. Sale of redundant assests.
9. Reducing short-term assets.

OPM stands for 'OTHER PEOPLE'S MONEY'.

The capital requirements of a business enterprise can be broadly classified into two main categories, viz. fixed capital and working capital.

The different sources of financing are:

1. Equity financing.
2. Debt financing.

Preference Sharesholders.

It is a process of arranging finance from public by an entrepreneur. It is usually raised through shares and debentures.

Physical resources are made by humans through their abilities and skills.

Some of the prevalent parameters for measuring the volume are as follows:

Finance refers to capital fund and credit fund invested in the business.

The above observation was made by Herbert G Hicks and C Ray Gullet.

1. DIC (District Industries Centre).
2. EB (Electricity Board).
3. LA (Local Authority).

Business is an economic activity.

The important components of a financial plan are:

1. It helps to estimate the capital requirement and the mode of capitalisation.
2. It helps to decide the capital structure of the enterprise.

A manning table is a listing of the positions or number of workers to be used in the operation of a particular machine or process.

Financing is the use and manipulation of money.

‘Nut and Bolt' is an ancillary unit of Action Tractors as it supplies more than 50% of its production to its parent unit.

Two basic types of mentoring are as follows:

1. Based on mode of construction.
2. Based on mode of delivering.

Unsecured loans are mostly given on the credit worthiness and capacity to pay of an entrepreneur.

Captive Service: Captive Service is a portion of Business Process Outsourcing where an organization will use a wholly owned subsidiary instead of a Third Party Vendor. Parent company will use the resources made by the subsidiary company , with the only benefit of reducing the cost of production, cost of saving of using outside resources and easily maintaining and complete control over the process.

It refers to a listing of the position of workers number of employees to be used from top level to lower level in the manufacturing process or of a particular machine or for a particular job.

Debentures.

Business finance may be defined as the acquisition and utilisation of capital funds in meeting the financial needs and overall objectives of a business enterprise.

Goodwill = acquisition price - net assets.

These units have the advantage of a certain level of constant demand from the parent unit.

Chartered accountants, auditors, bankers, lawyers, are important professional experts who render their services to run the business enterprises.

The word mentor comes from the character “Mentor” in Homer's epic tale, The Odyssey.

The industrial units whose investment in plant and machinery exceeds 10 crores are said to be large units.

The most basic resources, for any enterprise are:

1. Land
2. Labour
3. Capital

The two financial decisions are as follows:

1. Funds requirement decision.
2. Financing decision.

For developing manpower, the total work to be done is divided and grouped into packages called 'jobs'.

"Job' is a task or piece of work especially one that is paid.

Loans which are repayable on demand by the commercial banks are called 'demand-loans'.

Capital structure is basically the composition or mixture of different types of long-term capital, whether owned or borrowed.

One of the factors affecting an enterprise's capital structure ischaracteristics of the company.