2.1.4 Planning

Question 1

Define planning in business terms?

Answer 1

document setting out what firm is, does and what it wants to achieve

Question 2

What does a business plan provide for others?

Answer 2

helps potential leaders and investors get a feel for what the business wants to gain and achieve

Question 3

What should be in a business plan? (9)

Answer 3

Executive summary 
Products
Market and competitors 
Marketing plan 
Organisational plan 
Production plan 
Historical figures 
Forecasts 
Existing sources of finance

Question 4

What is a cash flow forecast?

Answer 4

month by month prediction of timings expected with cash inflows/outflows

Question 5

What are cash inflows?

Answer 5

gained from sales and any income into the firm

Question 6

What are cash outflows?

Answer 6

payments for materials, labour and rent etc.

Question 7

What is the opening balance?

Answer 7

money in the bank at the first day on the month

Question 8

What is total cash flow?

Answer 8

money entering the firm

Question 9

What is total cash outflow?

Answer 9

Money leaving the business

Question 10

What is net cash flow?

Answer 10

total cash flow - outflow

Question 11

2 uses of cash flow forecasts?

Answer 11

investment opportunities

assessing ‘what if’ questions

Question 12

2 limitations of cash flow forecasts?

Answer 12

inaccurate sometimes

doesn’t take into account external factors changing