1.4.4 Business Plans

Question 1

Business plans

Answer 1

A document that outlines how an entrepreneur is going to set up a new business

Question 2

SMART Objectives

Answer 2

Objectives that are Specific, Measurable, Achievable, Realistic and Time-bound

Question 3

Market research

Answer 3

The process of gathering information about the market and consumers’ needs and wants in order to help inform business decisions, including product design and marketing

Question 4

Target market

Answer 4

The group of people that a business has identified as potential customers

Question 5

Revenue

Answer 5

The money that will come into a business from sales

Question 6

Profit

Answer 6

The amount of revenue left over once costs have been deducted

Question 7

Cashflow

Answer 7

The amount of money coming in and going out of the business and the timing of its movement

Question 8

Budget

Answer 8

Pre-set financial targets for a business to achieve, like sales budget, or abide by, such as an expenditure budget, in a given time period

Question 9

Negative cash balance

Answer 9

Occurs if the business’s opening balance results in a negative amount at the end of the period, leading to a cash shortage

Question 10

Overdraft

Answer 10

A facility provided by a bank allowing a current account holder to withdraw more money than there is in the account

Question 11

Bank loan

Answer 11

A fixed sum of money lent by a bank to an individual or a business for a specified purpose, which must be repaid with interest in set payments over an agreed period of time