Business Planning Flashcards
Business plan
A business plan is a written document that describes a business, it’s objectives, it’s strategies, the market it is in and it’s financial forecast
Purpose of business planning:
- Provide a focus on the business idea
- It helps test the financial viability of the idea
- It encourages the entrepreneur to set appropriate objectives that are in line with business activities
- Helps clarify thoughts and identify gaps in information
- Helps the entrepreneur become more organised
- Allows the planning process have a logical structure
- Can be used to measure actual performance
What a business plan must include:
- The idea
- Where the idea came from
- Objectives and key targets for the business
- Finance required
- Market overview
- How the business will operate
- Cash flow forecast
- Forecast revenue, costs and profits
Risk
The chance of failing
Uncertainty
Unsure of what is going to happen mostly because elf a lack of information
Revenue
Money made from sales/selling products
Fixed costs
Costs that do not change no matter the situation
Variable costs
Costs that can dependent on the outcome
Total costs
Variable cost + Fixed costs
Profit
The money made by a business after costs have been deducted
Revenue Calculation
Quantity sold * selling price
Profit Calculation
Revenue- Costs
Market research
Involves gathering data about customers, competitors and market trends
Aims and objectives
The overall target or goal of the business, whereas business objectives are h to é steps a business needs to take to meet its overall aims
Target market
A group of people or area of a market that a business aims to sell its products to
