Business Planning (Level 1) Flashcards
What legislation is applicable to Business Planning?
Business and Planning Act 2020
What is a Partnership?
Two or more individuals manage and operate the business. Equal owners and share liability for debts/profit.
What is a Limited Company?
A business that has a separate legal identity from its owners and managers.
Shareholders liability is limited to the capital invested
If the company becomes insolvent, the shareholders assets remain protected
What is a plc?
A public company in the UK.
All companies are listed on the London Stock Exchange
Offers shares of stock for the general public and the buyers of those have limited liability meaning they cannot be held responsible for business losses.
What is a Limited Liability Partnership (LLP)?
A partnership structure where each partners liabilites are limited to the amount they put into the business.
Limited liability means that if the partnership fails, then creditors cannot go after a partners personal assets or income.
One partner is not responsible or liable for another partners misconduct or negligence
Common in professional businesses like law firms or accounting.
What is a business plan?
Gives an outline of your business and the market it will operate in
How it aims to make money
Defines it’s objectives and how to achieve them
Important documents for external audience (and internal) to attract investment and secure lending
Types of business plans
Strategic - Focuses on long terms goals, major initiatives and vision Operational - Day to day process of achieving the long term, strategic plan Departmental - A plan for a specific department within a larger business Corporate - A plan for the ‘top-level’ - overall corporate strategy
Businesses may have multiple business plans
What would be in a business plan for setting up my own practice?
Revenue forecast
Cost forecast
SWOT/PESTLE Analysis
Resource structure
Growth opportunities - e.g. BTR market for TH
KPI’s - e.g. completing on time, no. of accidents
Condition of market - e.g. competitors, viable market to enter?
Name some advantages of a business plan
Measurable benchmarking, support for funding, helps secure talent, provides structure
What can a business plan can help achieve?
Funding, gain new clients and customers, help focus on priorities, help focus on organisational change, to set targets for staff & set budgets
What are key corporate objectives?
Market share
Innovation
Productivity
Profitability
Physical & Financial Resources
What’s the difference between short and long term strategies?
Short-Term - Usually involves processes with results shown within a year. Includes: training courses, quality fixes, etc.
Long-Term - Solving problems permanently to preserve accomplishments and continued progress. Reacts to social, economic and political environment (PESTLE) to achieve long term goals.
What is market analysis?
Provides information about industries, customers, competitors and other market variables.
Determines the relationship between supply and demand for a specific product or servce.
What is a five year plan?
Strategic roadmap to help businesses better achieve long term goals
What would be included in a public sector business plan?
Outlines the government agency or public sector goals and objectives.
How they will achieve these goals and objectives without public funding.
Types of cases: how will they change? Achieving value for money, increasing affordability and how to deliver this.
Objectives - Markets, clients, turnover, staffing, acquisitions
Markets - Competitive in the market
Clients - Satisfaction and retaining/adding customers
Turnover - Ensuring revenue and profitability
Staffing - Retaining staff and employing the best fit
Acquisitions - Mitigate risks to ensure growth
What are key factors in resourcing within a business?
Recruitment - Employing the best staff/fit
Training - Continuing to grow the staff currently employed to expand knowledge and reduce the need for reemployment/outsourcing
Financing - Ensure employment pay market rates and promote internally to save fees externally
Accommodation - Ensure happiness of employees
FART - Financing, Accommodate, Recruit & Train
SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
What is SWOT analysis?
S - What do you do well? Unique resources?
W - Improvements? Do we have fewer resources? Do others see us as weak?
O - What can we take advantage of? How can you turn strengths into opportunities?
T - What can harm us? What is competition doing? What exposes us?
When to use SWOT analysis
Can be used across industries
Internal and external factors
Can be used at the beginning of a project to utilise the risks however also throughout to monitor
PESTLE Analysis
Political
Economic
Social
Technological
Legal
Environmental
What is PESTLE analysis?
A tool used to gain a macro picture of an industry environment. It allows a company to form an impression of the factors that might impact a new business or industry.
Some factors more important than others.
Helps identify risks for the SWOT analysis.
What is the role of the human resources department?
Division of a business that finds, screens, recruits and trains job applicants.
Administers employee programs
Manages payroll
Holiday management
People management is required for long term success
Types of organisational structure
Hierarchical - Employees are grouped with every employee having one clear supervisor
Matrix - People with similar skills are pooledfor work assignments
Flat/Horizontal - Many levels of middle management are eliminated
Line - Authority flows from top to bottom
Team-based - Teams working towards common goal while working on individual tasks
What is data management?
Process in which businesses gather, store, access and secure data
Helps identify opportunites for improvement
Should be easily accessible for all employees
What is administration?
Overseeing business operations
Planning, organising, commanding, coordinating & controlling
Assist in achieving common goals and objectives
Why is Health and Safety a key factor in business planning?
Responsibility of the employer to ensure the employees are safe in the workplace
Sufficient training to be available
Legally binding
Can boost staff morale and productivity if H&S culture operated
How is equality managed in the recruitment process and can you name any legislation applicable?
Every applicant is to have the equal opportunity and fairness throughout the recruitment phase as well as once employed.
The belief that no one should have poorer life chances because of the way they were born, where they come from, what they believe, or whether they have a disability.
Equality Act 2010 - Prohibits discrimination
How can a company analyse its position in the market?
Analyse its market share
Review its profitability compared to its competitors
3 Levels of business management
Corporate, Management & Operational Level
How do surveyors contribute to business planning?
Early involvement to test the budget in the market (early warning of profit/loss on packages)
Measurement
Risk management
Cashflow forecasting
Does RICS have corporate strategy?
Yes, it sets out long term strategic goals for the organisation.
Benefits of an up-to-date business plan
Helps achieve funding
You can market previous work to clients
Bring focus to the companies priorities
Allows staff to align goals with the company’s
Helps set budgets
What is working capital?
Difference between current assets (Cash, upaid bills and inventories of raw materials) and current liabilities (accounts payable and debts)
Measure of companys liquidity, operational efficiency and short term financial health
What is stock?
Represents the ownership of a fraction of a corporation. Can be bought and sold on stock exchanges for public limited companies only (plc in UK)
Who are debtors?
Firm that owes money to either a loan creditor or trade creditor. Debt is either lump sum or split to repayments until paid off - potential to pay interest on these debts
Who are creditors?
Firm that is owed money as they have provided goods or services. Loan creditors are banks and building societies & trade creditors are suppliers that haven’t been paid yet for their goods/services
Types of forecasting in business planning?
Cashflow forecasting, balance sheet and P&L reviews
