Business planning Flashcards
What is a business plan?
A document defining a business’s future objectives and strategy.
What is the purpose of a business plan?
There can be a variety of purposes, such as:
- Raising funds or finance;
- Gaining new instructions, clients or customers;
- Focusing on priorities;
- Responding to change;
- Budgeting or managing financial resources;
- Setting staff targets.
What are some of the key elements of a business plan?
The below is not an exhaustive list but just some key elements in a business plan:
- Executive summary;
- Mission statement;
- Vision statement;
- Description of business opportunity or idea;
- Team;
- Operations;
- Marketing;
- Sales;
- Competitive analysis;
- Forecasted cashflows;
- Objectives and goals.
What is the difference between a mission statement and a vision statement?
- A mission statement will define and focus on the business objectives at current that will drive the company.
- A vision statement will consider the future of the company and will direct the company.
What is SWOT analysis?
A tool used for business planning in which it identifies the following:
- Strengths (e.g. little competition, experienced surveyors, existing client base);
- Weaknesses (e.g. pressure on fees, inflation and interest rates, set-up costs);
- Opportunities (e.g. new markets to explore, wide client base, local and national launch events);
- Threats (e.g. resourcing, funding, time to build up workstream).
What is PESTLE?
A similar tool as SWOT used for business planning however it focusses more on external factors affecting a business such as:
- Political (e.g. Brexit);
- Economical (e.g. Inflation);
- Social (e.g. demographics);
- Technological (e.g. BIM);
- Legal (e.g. new break clause case law);
- Environmental (e.g. MEES, Future Homes Standard and etc.)
What is an example of a good business plan?
- Short, concise and to the point;
- Reviewed and regularly updated;
- Inclusive of relevant information, including additional data, in appendices if appropriate;
- Realistic, not overly optimistic or based on inaccurate financials or data;
- A formal, professional document with a cover, contents and visuals.
What is Alban’s business plan?
- Continue focussing on the residential and commercial clients.
- Delivering a turnover of approx. 10% each year.
Why is business planning important?
- To set targets for the business and how those targets are going to be achieved.
- To look for opportunities in the market the business could benefit from.
- To attract the attention of new business including new clients.
What the different types of business you are aware of?
- Sole trader.
- Partnership.
- Limited (Ltd).
- Limited Liability Partnership (LLP).
What is a sole trader?
A sole trader is a person who is the exclusive owner of a business and entitled to keep all profits after tax but is also liable for all losses (unlimited liability). Sometimes liabilities can come in the form of personal assets e.g. house and etc.
Note: a sole trader does not have to register with Companies House but do have to inform HMRC as they retain all profits after tax.
What is a partnership?
A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.
Note: a partnership must be registered with HMRC for income tax through self-assessment. As for liabilities, if one cannot pay, then the other will be liable for their share. This is risky when entering into business with someone else.
What is a limited company?
In a limited company, the shareholders’ liability is limited to the capital they originally invested. If such company becomes insolvent, the shareholders personal assets remain protected as they are essentially ‘ring-fenced.’
Shares in a private limited company are not offered to the general public (distinguishing it from a public limited company - plc.)
Note: limited companies must be registered with Companies House with an SIC code identifying the company’s specific business.
What is an LLP?
A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore exhibits elements of partnerships and corporations.
In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence as it is essentially ‘ring-fenced’ from each partner’s personal assets and finances.
What is VAT and when must a business register for VAT?
VAT is tax added to the purchasing of a product or service a business is providing, usually 20%.
Companies must register for VAT if their turnover exceeds a threshold. As for 1st April 2024, the threshold has increased from £85k to £90k.
Note: companies can voluntarily register for VAT if their turnover is below this threshold.
