Setting up a Business (VSAQs)
Commerce-2 | 6. Setting up a Business – VSAQs:
Welcome to VSAQs in Chapter 6: Setting up a Business. This page includes the most important FAQs from previous exams. Each answer is provided in simple English and presented in the exam format. This approach helps you prepare effectively and aim for top marks in your final exams.
VSAQ-1: What is a Project Report?
A Project Report is like a detailed plan or blueprint for your business idea, laid out in a written document. Imagine you have a great idea for starting a new bakery, but before you begin, you need to think through all the details. A project report helps you do just that. It includes everything from your business idea and promoter information (who’s behind the project) to details about the product you’ll offer, where the financing will come from, and how much it will cost to produce your goods. It also covers things like the machinery you’ll need, the plant capacity (how much you can produce), and other essential information that gives a clear picture of your proposed project. This report is crucial for planning and also for convincing potential investors or banks that your idea is solid and worth backing.
VSAQ-2: What is a Bridge Loan?
A Bridge Loan is like a financial lifeline that helps you cross over a temporary gap until you secure a more permanent solution. Imagine you’re an entrepreneur who’s started building a new restaurant, but the long-term loan you applied for hasn’t come through yet. To keep the project moving, you might take out a bridge loan. This short-term loan gives you the funds you need right away to continue your work until the larger, long-term loan is approved and disbursed by the bank or financial institution. Bridge loans are designed to help you during this in-between period, ensuring that your project doesn’t come to a halt while you’re waiting for more substantial financing.