Entrepreneurial Planning — Entrepreneurship STD 12 Commerce — Question

Finance is one of the most important pre-requisite to establish an enterprise. Availability of finance facilitates the entrepreneur to bring together men, material, machines and methods to produce goods and services.The following four factors affect the formulation of a sound financial plan:

1. Financial requirements: The financial requirements of a new project or even for an existing venture should be assessed before drawing up the financial plan.
2. Sources of raising funds: The various sources from which funds could be raised should be identified.
3. Exact assessment of related concepts: The revenue, cost, profits, cash flow dynamics, stock of inventory, etc., should be exactly assessed to draw up an effective plan.
4. Economic feasibility of the proposed investment: The plan should also be indicative of the general financial well-being of the new venture or proposed investment.