Business Planning

Question 1

Average unit cost equation

Answer 1

Average cost= total costs/output

Question 2

What is the equation of interest?

Answer 2

Interest= interest rates *size of the loan

Question 3

Why do you need a business plan?

Answer 3

It is important for any new or existing business to create a plan in order to have an understanding of how it plans to achieve its aims and objectives

Question 4

What are the main parts of a business plan?

Answer 4

Executive summary 
Mission statement 
Product or services
Market analysis 
Organisation and management team 
Production details 
Finance

Question 5

What are the advantages of a business plan?

Answer 5

Business plans provide parameters for setting targets.

Management can check staffing, incomes, product ranges and lots of other things against previous business plans and expansion plans.

A business plan can be used as a benchmark against outcomes like cashflow, production outcomes or service delivery

Question 6

What are the disadvantages of a business plan?

Answer 6

Businesses need to be flexible and able to adapt to a changing environment. A business plan may stop a company changing.

Business plans can be costly and time consuming to make.

forecasts of revenue and profit may be misleading and lead to bad decisions.

Question 7

What type of cost are raw materials?

Answer 7

Variable costs

Question 8

What type of cost is rent?

Answer 8

Fixed costs

Question 9

What are the 4Ps of the marketing mix?

Answer 9

Promotion
Product
Place
Price

Question 10

What are the 4 main parts of a business plan?

Answer 10

Mission statement
Executive summary
Financing plans
Market analysis