Business planning (L1) Flashcards
What is your Employer’s business plan?
My Employer’s business plan for AMP8 is to provide great water for a Stronger, Greener and Healthier North West. Highlights from the plan include:
- Reducing spills by 60%
- Doubling financial support for those who need it, and
- Supporting 30,000 jobs across UU and its supply chain
What is a business plan?
It is where a business outlines future objectives and how it will get there.
What are the elements that may be included in a companies business plan?
- Executive summary
- Business description
- Market analysis
- Operating plan
- Company structure
- Objectives
- Summary of strategy
What is a SWOT analysis?
It is a framework that can help businesses identify Strengths, Weaknesses, Opportunities and Threats as they relate to internal and external factors that affect its performance.
What is Working Capital?
It is the money available for a business to meet short-term obligations and fund its day-to-day operations.
How is Working Capital calculated?
Current Assets - Current Liabilities
What is a Debtor?
A company or individual that owes the business money.
What is a Creditor?
A business or individual that has lent money to another business or individual.
Why is maintaining good payment practices important?
Being aware of when sums are due is essential for business planning to maintain good relationships with Creditors.
Likewise, understanding the amount owed by Debtors and recognising red flags that they are not able to pay can help avoid cash-flow issues.
What is liquidity?
Liquidity refers to the ease in which assets can be converted into cash quickly.
What is the problem with a business lacking liquidity?
If a business is lacking liquidity it may struggle to meet its short-term obligations like payroll which could lead to bankruptcy.
What is the problem with a business being too liquid?
Holding too much money in liquid sources such as cash can limit a business’s capital growth.
What is the most liquid asset?
Cash
What are examples of illiquid assets?
Property, fine art and collectibles
What makes an asset illiquid?
If it takes time and effort and costs to convert the asset into cash