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Preparing a business plan is important for a new farmer - NSC Agricultural Management Practices - Question 3 - 2022 - Paper 1
Question 3
Preparing a business plan is important for a new farmer. 3.1.1 Give FIVE reasons for developing a business plan. (5) 3.1.2 State FIVE financial strategies as part ... show full transcript
Worked Solution & Example Answer:Preparing a business plan is important for a new farmer - NSC Agricultural Management Practices - Question 3 - 2022 - Paper 1
Step 1
Give FIVE reasons for developing a business plan
Answer
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Feasibility Testing: A business plan allows a farmer to assess the feasibility of the enterprise, ensuring that the concepts are realistic and achievable.
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Clarifying Financial Needs: It assists in determining the financial needs of the business, which is crucial for budgeting and obtaining loans.
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Guiding Daily Activities: The plan outlines daily activities, providing a roadmap for the farmer to follow in managing their operations effectively.
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Defining Future Prospects: It indicates the current position of the business while also outlining future prospects and growth opportunities.
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Securing Funding: A comprehensive business plan helps in gaining credit from financial institutions by illustrating the viability and potential of the business.
Step 2
State FIVE financial strategies as part of the marketing plan
Answer
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Pricing Strategy: Establish prices based on market analysis and cost structures to ensure competitiveness and profitability.
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Sales Forecasting: Utilize market research to project potential sales and revenue, guiding production and inventory decisions.
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Budget Allocation: Define specific budgets for marketing activities, ensuring adequate funding for promotions and advertising.
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Diversification of Revenue Streams: Explore additional products or services that can generate extra income beyond traditional offerings.
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Monitoring and Adjusting: Continuously monitor financial performance and adjust strategies as necessary to respond to market changes and improve profitability.