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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. 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.
Answer
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Feasibility Testing: A business plan helps evaluate the feasibility of the farming enterprise, ensuring that it is viable before committing resources.
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Determining Needs: It assists in identifying the financial and operational needs required to run the business effectively.
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Setting Daily Activities: A business plan outlines daily activities, ensuring that tasks are organized and manageable.
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Future Prospects: It provides projections about the future of the business, helping the farmer plan for growth and development.
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Credit Acquisition: A solid plan can be used to obtain credit from financial institutions, outlining how the resources will be utilized.
Step 2
State FIVE financial strategies as part of the marketing plan.
Answer
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Profit Projections: Establish potential profit projections based on realistic figures to understand expected financial returns.
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Competitive Analysis: Focus on weaknesses within the competition to improve product offerings and establish a stronger market presence.
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Consumer Pricing: Develop a strategic pricing model based on consumer behaviors and market conditions to optimize profitability.
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Resource Allocation: Indicate a break-even point to understand the level of sales required to cover costs, and guide investment decisions.
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Financing Solutions: Identify weaknesses in financing options available and suggest improvements for better financial management.