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Preparing a business plan is important for a new farmer - NSC Agricultural Management Practices - Question 3 - 2022 - Paper 1

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Preparing a business plan is important for a new farmer. 3.1.1 Give FIVE reasons for developing a business plan. 3.1.2 State FIVE financial strategies as part of t... 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

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Answer

  1. To test the feasibility of the enterprise, ensuring that it is viable and sustainable.
  2. To assist in determining the financial needs for starting and maintaining the business.
  3. To outline the current position of the business and track its progress over time.
  4. To provide a detailed plan for daily operations and activities, helping in organization.
  5. To gain credit from financial institutions by demonstrating a well-thought-out plan.

Step 2

State FIVE financial strategies as part of the marketing plan

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Answer

  1. Establish realistic pricing strategies to attract and retain customers while ensuring profitability.
  2. Project sales forecasts based on market research to guide budgeting.
  3. Allocate funds for marketing activities to enhance product visibility and customer engagement.
  4. Set aside a contingency budget for unexpected expenses or opportunities.
  5. Monitor cash flow to manage expenses effectively and ensure financial stability.

Step 3

Identify the entrepreneurial characteristics as indicated by A, B, C and D

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Answer

A. Organizational/coordination abilities - Effectively allocating tasks to workers based on skills. B. Technical/operational knowledge - Understanding agricultural practices and crop management. C. Innovative/creativity/vision insight - Ability to develop new ideas for improvement and adapt to changes. D. Perseverance - Continually trying even in the face of challenges such as drought.

Step 4

State THREE resources that an entrepreneur requires when starting a farming enterprise

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Answer

  1. Financial resources: Sufficient capital to invest in land, equipment, and operations.
  2. Human resources: Skilled labor to carry out agricultural activities effectively.
  3. Physical resources: Necessary equipment and infrastructure such as tractors, irrigation systems, and storage facilities.

Step 5

Distinguish primary from secondary and tertiary agricultural sectors

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Answer

Primary agricultural sector: Focuses on the extraction and production of raw materials, such as farming, fishing, and forestry. Secondary agricultural sector: Involves processing these raw materials into finished goods, like converting wheat into flour. Tertiary agricultural sector: Provides services related to agriculture, including distribution and marketing of agricultural products.

Step 6

Match the marketing laws (A–E) with the descriptions (3.4.1 to 3.4.4)

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Answer

3.4.1 - D 3.4.2 - A 3.4.3 - B 3.4.4 - E

Step 7

State THREE advantages of farm gate marketing

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Answer

  1. Reduced marketing costs as products are sold directly to consumers.
  2. No transport costs incurred, leading to increased profit margins.
  3. Enhanced relationships between farmers and consumers, fostering loyalty.

Step 8

State THREE disadvantages of farm gate marketing

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Answer

  1. Farmers may need to accept lower prices due to competition in local markets.
  2. Limited reach to consumers who may not visit the farm.
  3. Increased risk of theft and security issues due to direct sales.

Step 9

Distinguish between internet marketing and contract marketing

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Answer

AspectInternet MarketingContract Marketing
DefinitionSelling on online platforms, reaching a global audienceSelling products via a fixed agreement with consumers.
Income VariabilityFluctuating prices due to market demandFixed prices agreed upon in contracts.
Audience ReachGlobal audience through online channelsLimited to the terms of the contract.
ObligationsNo contract obligations for sellersObligated to fulfill contract terms.

Step 10

State THREE functions of producer organisations in the agriculture industry

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Answer

  1. Assist in the marketing of agricultural products to elevate farmer sales.
  2. Research potential markets for the products, ensuring access to various consumers.
  3. Provide advice to farmers on production methods and sustainable practices.

Step 11

Name THREE advantages of marketing produce on fresh-produce markets

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Answer

  1. Access to a larger customer base leading to increased sales opportunities.
  2. Ability to establish brand recognition among consumers.
  3. Opportunity to receive immediate cash flow from direct sales.

Step 12

Name FOUR advantages of evaluation

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Answer

  1. Improves decision-making by providing insight into performance.
  2. Ensures efficient use of resources to maximize outputs.
  3. Identifies areas for improvement, informing future strategies.
  4. Monitors progress, allowing for timely adjustments.

Step 13

List FOUR advantages of proper management regarding the application of labour

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Answer

  1. Increases efficiency and productivity among workers due to clear direction.
  2. Enhances skill utilization by assigning tasks according to workers’ expertise.
  3. Minimizes conflicts and misunderstandings, leading to a harmonious work environment.
  4. Establishes accountability and responsibility among workers, fostering a sense of ownership.

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