Business planning Flashcards
What is a business plan?
A business plan is a document provided to lenders/investors which sets out the reasoning and evidence to obtain funding.
The plan will highlight the reasons for the set up of the business as well as provide an outline of the goals and objectives along with how and why these are achievable.
The plan will assess the benefits and value of the business idea for investors/lenders.
The plan will cover: the main idea, objectives, sales reports, financial forecasts, any potential issues, goals and dates to achieve said goals.
What is your company’s business plan?
- Broadly speaking my company’s summary business plan for 2022/2023 covers 7 key areas which include:
Strategic framework
The specifics of the framework are to be detailed in the coming months but the framework will be based on four key foundations for the framework will be:
- For our people: as we transfer to an Employee owned trust those people who make up the company are more important than ever. Measures will include clear career progression, management support, engagement and wellbeing.
- For our clients: New measures will identify how effectively client offers are meeting our demand for growth, how satisfied clients are and how effectively we innovate for them.
- For our resilience: Measures will focus on robustness as a business - including financial security and quality of data around KPIs.
- For our future: Measures will focus on how the company will give back and ensure we are sustainable.
People
- Focusing on wellbeing, engagement and happiness. With covid restrictions ceased the company is wanting to provide more opportunities for in person training and collaboration - summer training day planned for this year.
- Encouraging diversity and celebrating differences.
Clients
- Encouraging the return of face to face meetings and engagement with clients.
- Rising inflation / volatile markets- pension funds will deem commercial property safe investments which will benefit our firm, also negotiating uplifts in fees to tackle inflation.
- Expected that industrial + logistics will remain one of strongest market performers, HOL also want to exploit the increase in shopping centre investment which clients are now converting into warehousing or mixed use resi.
Resilience
- ESG has now become the norm. To ensure we are positively impacting communities we need to try and deliver this through our clients.
Innovation
- Creating new products and services - drone surveys now growing and offering solar PV services too and using better technology internally to increase collaboration.
Budget:
- Wanting to achieve a turnover of at least £64m and looking to achieve a net profit of at least 15%.
What is gross profit?
Net turnover less staff costs allocated to your projects via timesheets
What is the importance of a business plan?
A business plan is a very important strategic tool, It will help businesses collectively focus on the specific steps necessary to achieve their business objectives that can be short and long term.
How do you job updates aid your clients?
How does your company measure performance of its’ employees?
- Performance is generally measured through my project related time (time spent working that is earning the firm money), sums billed and write off for instructions.
What are the different types of business plan?
Start up plan – how the business will operate long term
Annual Growth Plan – financial, marketing and operations
Scenario Plan – for companies in rapidly changing industry
What are the essential elements of a business plan?
- Overview
- executive summary
- general company description
- opportunity
- industry and market
- strategy
- team
- marketing plan
- operational plan
- financial plan
- appendix
What are the key financial indicators that can allow financial benchmarking?
What is capital?
What is stock?
What are creditors?
What are debtors?
What forecasting techniques can a firm use for forecast financial performance?
What is an Employee Owned Trust? What are the positives and benefits?
- EOTs are a government initiative aimed to promote employee ownership by giving business owners the opportunity to sell their shares to an employee owned trust free from capital gains tax (tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value). EOTs do not involve direct share ownership by employees, rather a controlling interest in the company is transferred to an all-employee trust held for the benefit of employees. Employees hold controlling stake in company.
Positives:
- Allows quick and streamlined exit route for shareholders (sell their shares).
- Allows an exit where there is no obvious third party purchaser.
- Share capital available to incentivise management and key employees.
- Owner (s) can still retain some involvement (up to 49%),
Negatives:
- If the company’s performance declines after sale to an EOT then repaying the funding used to buy the shares can be problematic.
What is a partnership?
In a general partnership, all parties share legal and financial liability equally. The individuals are personally responsible for the debts the partnership takes on. Profits are also shared equally. The specifics of profit sharing will almost certainly be laid out in writing in a partnership agreement.
What is your companies short and long term goals?
Short term
Continue to provide a high level of service to our existing clients.
Encourage diversity and inclusion within our firm by setting up an internal board to guide and inform policy.
With COVID subsiding we are now encouraging face to face client meetings and events to increase our client base and provide a good quality service.
Long term
Long term sustainability
Move into markets that are growing such as out of town shopping centres that are being converted into warehousing due to its boom - we are well placed in this sector.
How did you generate the fee? what other methods could you use?
- Hourly charge
- % of project value
- Fixed fee
What is a SWOT analysis?
SWOT analysis is analysing Strengths, Weaknesses, Opportunities and Threats. Competitors, prices of services, and consumer trends
What is the difference between a Sole Trader, Partnership, Limited, and a LLP?
Sole Trader A person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses (unlimited liability).
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.
Limited 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. Shares in a private limited company are not offered to the general public (distinguishing it from a public limited company - plc.)
Limited Liability Partnership (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.
What do you look for when analysing consultant fee proposals?
- Total fee and how it was calculated.
- Level of resources; seniority, experience and allocation;
- Fee drawdown;
- Agreement of client Terms and Conditions;
- Agreement of client payment terms / period;
- Agreement of scope of services;
- Exclusions;
- Assumptions e.g. programme.
What might be included in a SWOT analysis?
SWOT analysis is analysing Strengths, Weaknesses, Opportunities and Threats. Competitors, prices of services, and consumer trends
Give me some examples of some new business areas you could considering moving into.
- Asset management
- Drone surveying
- Environmental services - Solar PV consultancy.
How can/have you measure performance on a project?
With the use of KPI’s - for me it is time spent on the job in comparison to the job fee and the resulting profit or write-off (time / resources spent on instruction that cannot be feed).
