02 Business Planning

Question 1

What is a business plan?

Answer 1

A written document that describes a business, including objectives, strategies, sales, marketing and financial forecasts

Question 2

What is the purpose of a business plan?

Answer 2

Helps to:

1. Clarify a business idea
2. Spot potential problems
3. Set out goals
4. Manage progress
5. Secure investment
6. Convince customers, suppliers and employees to support the business

Question 3

What would you expect to see in a 5 year plan for a business?

Answer 3

1. Executive summary
2. Elevator pitch
3. Mission statement
4. Company structure
5. Products and services
6. Operations and logistics
7. Market research
8. Marketing strategy
9. SWOT (strengths, weaknesses, opportunities and threats) analysis
10. Short-term/long-term goals
11. KPIs
12. Financial forecasts (predicted cash flow and profit and loss statements)

Question 4

What sort of things would be considered when setting a business strategy?

Answer 4

Involves:

1. Setting goals
2. Determining actions to achieve the goals
3. Mobilising resources to execute the actions

Question 5

What is the role of marketing in business planning?

Answer 5

1. Promotes the company’s services to the industry and others
2. Aim is to win work and obtain new clients

Question 6

How would you go about setting up your own business?

Answer 6

• Create a business plan, considering:
  
  • A business strategy
  • Suitable marketing
  • Risk
• Comply with the RICS’ requirements for firms

Question 7

How does your business manage risk?

Answer 7

1. Implement a senior hierarchy to assess risks
2. Undertake a risk analysis for every job - avoid activities that have severe and likely consequences and low benefits (e.g. Stage-Gate Review - red, amber, green system)
3. Avoid through-put - do as much work in-house as possible
4. Vet the supply-chain
5. Train and supervise staff
6. Manage fees on jobs and ensure cash flow
7. Have adequate insurances in place (e.g. PII)

Question 8

How do staff appraisals influence business planning?

Answer 8

Key to determining how staff view the business and identifying how the business can improve

Question 9

What might you do to deal with the effects of an economic downturn?

Answer 9

1. Reduce costs where possible
2. Focus on cash collection and debtors
3. Do not aggressively cut fees
4. Do not spend on unproven marketing techniques
5. Focus on the medium term
6. Promote a positive attitude