Business Planning Flashcards
Purpose of business planning
It says what a business wants to achieve and how it’ll achieve it. Can help an inexperienced entreprenuer set up a business and make decisions, gather data and anticipate problems.
Problems in business planning
Markets can unpredictably fluctuate so a plan can become outdated. People who start a business can lack experience, plans may need to be updated over time.
Reducing the risk of business planning
Research the market, talk to experts, plan for a variety of outcomes, regulary review the plan
Main sections of a business plan
Background information on founders/investors, market analysis, objectives, prices and expected sales, competitors, finances
(Financial) profit
Revenue - total costs
Revenue
The value of a business’s sales
(Financial)Fixed costs
Don’t change, for example rent over a given time
(Financial) variable costs
Costs that change with output. For example, the amount of bread bought to make sandwiches
Market research
Who will buy the product/service? Why will people buy? How big is the market?
Financial forecasts
Cash flow, profit and loss acount, balance sheet, sales
External pressures
Who are the competitors? How are they performing? How is the economy doing?
Sales and marketing
What price shall we charge? How can we promote the product? How can we distribute the product?
Production process
Where to set up? How to organise the factory? Production methods? Can we ensure quality?
Human resources
How many employees? What training/skills is needed? How will we manage our employees?
