Business Planning Flashcards
What are the different types of businesses?
Partnership - Two or more people own and run a business. Each partner is ‘jointly and severally’ liable for the partnership’s debts
Limited Company - Legal ‘person’ responsible for its own actions, finances and liabilities. The liability of members or subscribers of the company is limited to what they have invested or guaranteed to the company.
Limited Liability Partnership (LLP) - Partnership in which some or all partners (depending on the jurisdiction) have limited liabilities.
What is business planning?
Developing a company’s mission or goals and defining the roadmap and strategies you will use to achieve those goals
What are the different types of business plan?
Financial Plan - which is a budget projected per month for the next 12 months.
Marketing Plan - which is what drives your Financial Plan.
Operations Plan - which describes how you will carry out the company objectives
Strategic / Organisational Plan - Focused on medium to long-term goals and explains the strategies for achieving them
What are the essential elements of a business plan?
- Executive summary
- Company description (nature of the business)
- Products and services (business expertise, management team)
- Market analysis
- Financial objectives (income v expenditure)
- Non-financial objectives
How do you identify and assess risks in the business planning process?
Identify high risks and look to mitigate:
- Physical
- Location
- Human
- Technological
- Strategic
Achieved by completing a SWOT analysis and/or a a Risk Assessment (Probability x Impact)
What methods can you use to mitigate those risks?
Avoid (Example - avoiding a risky business venture for a more secure plan)
Transfer (Example - business requires technological advancements to keep up with industry. Outsource to a specialist)
Reduce (Example - reduce chance of data leak by making data management training mandatory for staff)
Accept (Example - understand you may not achieve desired ROI for a project)
What is a SWOT analysis
Review of a company’s Strengths, Weaknesses, Opportunities, Threats (SWOT).
Strengths and Weaknesses (mainly internal)
○ Financial resources
○ human resources
○ Facilities
○ Equipment, processes and systems.
Opportunities and Threats (mainly external influences)
○ market trends
○ outside funding
○ customer demographics
○ supply chain
○ the economic climate
○ political and environmental issues.
What is market analysis?
A quantitative and qualitative assessment of a market
It looks into the size of the market both in volume and value, buying patterns
What is the importance of market research in the business planning process?
- Can identify how customers and potential customers view your business and competitors
- Reduce risks by testing
- Identify opportunities for growth (innovative products / services)
- Make more informed decisions
