business planning

Question 1

list 5 common section of a business plan

Answer 1

Personal Details, Mission statements, Objectives, Product description, Staffing requirements, Finance

Question 2

why would a business create a business plan

Answer 2

stability, for future business investors

Question 3

understand the term fixed and variable cost

Answer 3

fixed cost don’t change

variable cost change

Question 4

define: revenue, costs, profit and loss

Answer 4

revenue: Revenue is the income earned by a business over a period of time, eg one month. The amount of revenue earned depends on two things - the number of items sold and their selling price. In short, revenue = price x quantity.
costs: Costs are the expenses involved in making a product. Firms incur costs by trading
profit: Put simply, profit is the surplus left from revenue after paying all costs. Profit is found by deducting total costs from revenue. In short: profit = total revenue - total costs.
loss: A loss is made when the revenue from sales is not enough to cover all the costs of production.

Question 5

calculate the profit or loss if revenue costs change

Answer 5

if revenue decrease profit increases

if revenue increase profit decreases