Business plan progress can and should be measured throughout the year. Discuss three controls that help track progress. (Students can discuss any three of the following six)
What will be an ideal response?
A. Inventory control. By controlling inventory, the firm can ensure maximum service to the customer. The faster the firm gets back its investment in raw materials and finished goods, the faster that capital can be reinvested to meet additional customer needs.
B. Production control. Compare the cost figures estimated in the business plan with day-to-day operation costs. This will help to control machine time, worker hours, process time, delay time, and downtime cost.
C. Quality control. This will depend on the type of production system but is designed to make sure that the product performs satisfactorily.
D. Sales control. Information on units, dollars, specific products sold, price of sales, meeting of delivery dates, and credit terms is useful to get a good perspective of the sales of the new venture. In addition, an effective collections system for accounts receivable should be set up to avoid aging of accounts and bad debts.
E. Disbursements. The new venture should control the amount of money paid out. All bills should be reviewed to determine how much is being disbursed and for what purpose.
F. Website control. With more and more sales being supported or garnered from a company's website, it is very important to continually evaluate the website to ascertain its effectiveness in meeting the goals and objectives of the plan. There are many services and software packages available to assist the entrepreneur in this process.
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