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Entrepreneurial Planning — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipEntrepreneurial Planning5 Marks
Question
What is a financial plan? What are its objectives?
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Answer

Finance is one of the most important pre-requisites to establish an enterprise. Availability of finance facilities the entrepreneur to bring together men, material, machines and methods to produce goods/services.
As timely availability of funds in right volume is key to entrepreneurial success, the entrepreneur should develop a sound financial plan discussing:
  1. Financial requirements
  2. Sources of raising funds
  3. Exact assessment of the revenue, cost, profits, cash flow dynamics, stock of inventory loans etc.
Objectives of Financial plan:
  1. To assess the amount of finance needed by enterprise.
  2. To develop suitable capital structure for the enterprise.
  3. To make the policies related with the finance for the enterprise.
  4. To safeguard the enterprise for financial risk.

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