7 - Business Planning

Question 1

251 - In terms of business planning, what tools does your company use to ensure you are making a profit? (7)

Answer 1

1) Timesheets
2) Using resource planners (to ensure full utilisation)
3) Fee / cost reconciliation tools
4) Project reviews
5) Yearly performance reviews
6) Team meetings
7) Director one-to-ones

Question 2

252 - What is benchmarking (on a construction project)?

Answer 2

A PROCESS by which the estimated performance (often cost) of a project is COMPARED to other SIMILAR PROJECTS. This can highlight areas of design that are not offering good value for money; or, if the price offered by the contractor is in line with the wider market.

Question 3

253 - What is a PESTLE analysis? (2)

(Refer to book for diagram)

Answer 3

1) PESTLE is an acronym for political, economic, social, technological, legal and environmental.
2) It is a way of UNDERSTANDING and reviewing how EXTERNAL forces may IMPACT the BUSINESS.

Question 4

254 - What is a SWOT analysis? (2)

Answer 4

1) SWOT analysis is a STRATEGIC PLANNING METHOD used to EVALUATE STRENGTHS, WEAKNESSES, OPPORTUNITIES and THREATS involved in a project or business venture.
2) SWOT analysis can be used as a basis for business strategy.

Question 5

255 - What are the issues relating to staff turnover? (3)

Answer 5

1) It can be expensive and time consuming to HIRE STAFF.
2) TRAINING new people is time consuming and expensive.
3) Turnover can also AFFECT TEAM dynamics, productivity and continuity.

Question 6

256 - What are SMART targets / objectives as part of a business plan? (5)

Answer 6

Objectives which are;
1) Specific
2) Measurable
3) Achievable
4) Realistic
5) Time related

Question 7

257 - What is an investment appraisal? (statement + 3 points)

Answer 7

An investment appraisal is USED TO ASSESS whether a business or project would be a WORTHWHILE investment in terms of RETURN (both financially and / or added value). Considerations;
1) Rate of return
2) Payback period
3) Net present value (NPV)

Question 8

258 - Give examples of fee earning and non-fee earning staff? (2)

Answer 8

1) Fee earning - QS, PM, architect.
2) Non-fee earning - administration staff, IT technicians.

Question 9

259 - What is the purpose of an organisation chart? (2)

Answer 9

1) A GRAPHICAL REPRESENTATION of the roles, responsibilities and relationship between individuals within a organisation.
2) It can be used to DEPICT the STRUCTURE of an organisation as a whole or broken down by smaller business units.

Question 10

260 - How do you contribute to your company’s goals? (6)

Answer 10

1) SHARING KNOWLEDGE within my team(s).
2) KEEPING UP TO DATE with new technologies and systems.
3) DELIVERING and exceeding my RESPONSIBILITIES.
4) Understanding my personal / project OBJECTIVES, exceeding expectations where possible.
5) Bringing in NEW BUSINESS.
6) Focus on SAFETY.

Question 11

261 - What is the objective of Porter’s 5 Forces model? (2 points + 5 focuses)

(see book for diagram)

Answer 11

1) Porter’s 5 forces model is a model that IDENTIFIES COMPETITiVE FORCES that shape every industry and helps DETERMINE an industry’s STRENGTHS and WEAKNESSES.
2) Frequently used to identify an industry’s structure to DETERMINE BUSINESS STRATEGY.

The Five forces are;
1) Supplier power
2) Buyer power
3) Threat of substitutes
4) Threat of new entrants
5) Competitive rivalry

Question 12

262 - What is meant by business strategy? (2)

Answer 12

1) A business strategy is an OUTLINE of the ACTIONS and DECISIONS a company plans to take to reach its BUSINESS GOALS and OBJECTIVES.
2) The strategy DEFINES what the business NEEDS TO DO TO REACH ITS GOALS, which can help guide the decision-making process for hiring and resource allocation.

Question 13

263 - What is meant by strategic planning?

Answer 13

The MANAGERIAL PROCESS of developing and maintaining a STRATEGIC FIT BETWEEN the organisation objectives, resources and changing market opportunities.

Question 14

264 - What is the difference between business strategy and business planning? (2)

Answer 14

1) A business strategy is concerned with the ENTIRE ORGANISATION, such as what it produces, where it competes and how it allocates resources. It deals with the FUNDAMENTAL CHOICES that will affect the entire organisation.
2) Business plans are concerned with the DETAILED IMPLEMENTATION AFTER the BIG CHOICES have been MADE. A business plan deals with the detailed implementation of SPECIFIC ASPECTS of the overall strategy.

Question 15

265 - What is the difference between a business vision statement and mission statement? (2)

Answer 15

1) A vision statement FOCUSES ON TOMORROW and what an organisation wants to ULTIMATELY BECOME.
2) A mission statement FOCUSES ON TODAY and what an organisation DOES TO ACHIEVE IT.

Question 16

266 - What is a business plan? (3)

Answer 16

1) A business plan is a DOCUMENT that SUMMARISES the operational and financial OBJECTIVES of a business. It is a business’ ROAD MAP TO SUCCESS with detailed PLANS and BUDGETS that show how the objectives will be realised.
2) Likely TIMESCALE of THREE to FIVE YEARS (at least).
3) Written business plans are OFTEN REQUIRED to OBTAIN a bank LOAN or other FINANCING.

Question 17

267 - What would typically be included in a business plan? (9)

Answer 17

1) Executive summary
2) Marketing strategy
3) Vision and mission statements
4) Products and services
5) Management team and personnel
6) Financial forecasts
7) Responsibilities and targets
8) Training, resource strategy and hierarchy plans
9) SWOT analysis

Question 18

268 - What is a business model? (2 points - 2nd point with 3 sub-points)

Answer 18

1) A business model is the PLAN IMPLEMENTED by a company to GENERATE REVENUE and make a PROFIT from operations.

2) A business model may contain;
1) The PRODUCT / SERVICE the business believes has VALUE FOR the CUSTOMER.
2) The MARKET NICHE and main target demographic.
3) The EXPENSE of bringing your product / service to the target market.

Question 19

269 - How can a business plan help a company in the current economic climate? (6)

Answer 19

1) To help SECURE additional FUNDING from banks or external investors.
2) To GAIN NEW CLIENTS and commissions.
3) To help FOCUS the businesses PRIORITIES and respond to change.
4) FOCUS on KEY PRIORITIES.
5) For BUDGETING.
6) For SETTING TARGETS for STAFF.