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What Are the Three Tests Any Business Plan Should Be

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Essay

What are the three tests any business plan should be put to? Name and explain the purpose of each.


Definitions:

Production Capacity

The maximum amount of goods or services that a facility can produce over a given time period under normal operating conditions.

Sales Mix

The proportion of different products or services that make up the total sales of a company.

Limited Production

A production strategy where a restricted quantity of a product is made, often to maintain exclusivity or because of constraints.

Book Value

The value of an asset as recorded on the balance sheet, calculated as the cost of the asset minus any depreciation or amortization.

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