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Entrepreneurial Planning — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipEntrepreneurial Planning5 Marks
Question
Explain the factors affecting the formulation of a financial plan.
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Answer

Financial plan deals with the deciding in advance about the future spending. The formulation of plan is affected by following factors:
  1. Clarity of Objectives: Agood financial plan has clearly defined objectives. The objectives are expressed in terms of money or quality of products, objects. Objectives are presented in simple words.
  2. Simple: A good financial plan is simple to understand and implement. It is made simple by considering various factors related with the enterprise.
  3. Flexibility: A good financial plan has a scope for making changes in the future. The plan is made flexible considering future obligations and future plans of the enterprise.
  4. Risk: A good financial plan keeps sufficient scope for the calculated risk rather to say it is made by keeping the level of risk of the enterprise.

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