3.1.6 business planning Flashcards
What is a business plan
It’s an outline if what a business will do and how it aims do it
Who needs a business plan
New business owners and existing firms to make changes
What are the main sections of a business plan
Personal details Mission statement Objectives Product description Production details Staffing requirements Finance
Explain personal details
Details about the owners like cv to make banks more likely to loan you money bc you are more reliable
Mission statement
Used to describe broad aims of the business
Objectives
More specific than aims
Product description
Description of the product includes : market Competitors USP Market strategy Market research
Production details
How the firm will make its product including location and equipment
Staffing requirements
What personnel will be needed The number The job descriptions And wages
Finance
Start up costs Cash flow forecast Profit and loss Statement of financial position And ARR
Disadvantages of business plans
Time and money go into it Some people are to optimistic and do t know how to deal with problems People may stick too tightly to the plan and unexpected changes may happen
what is fixed costs
- DO NOT CHANGE WITH OUTPUT.
- not immediately affected by a change in the number of products that are made.
- do not change
examples of fixed costs
rattie
sat
in
applejuice
Rent Salaries Insurance Advertising
what are variable costs
- VARY DIRECTLY WITH OUTPUT
- are immediately affected by a change in the number of products that are made.
- The more products you make the higher the variable cost do change
examples of variable costs
cat
rat
make
pankakes
- Costs
- Raw
- materials
- Packaging wages
calculate total costs
Total fixed costs + variable costs
define revenue
the income gained by a business by selling its goods or services. It is a type of cash inflow.
revenue calculation
Selling price per unit X quantity sold
define profit
Money a business makes from selling its products or services after it has paid all the costs in making and selling them
profit calculation
Total sales revenue -total costs
