chapter 5 Flashcards
what is the definition of an aim?
an overall goal that an enterprise wants to achieve
what is the definition of an objective?
a specific target that an enterprise wants to reach so it can achieve its aims
what is the main difference between an aim and objective?
time
objectives - short term
aims - long term
what is an example of an objective to reach an aim?
an enterprise might aim to increase profits in a fair way
objective might be to increase profits by three percent by the end of the year to reach the aim
what should be your criteria for objectives?
SMART - specific, measurable, achievable, realistic, and time-based
what does setting objectives do for you?
provides a sense of direction
can help motivate employees as they know what they’re working towards
acts as a measure against which progress can be monitored
what are some examples of objectives?
- survival
- maximising profit
- satisfying profit
- growth
- environmental
- ethical
- NPO
- social
what is an action plan?
a list of tasks that need to be completed in order for a set goal to be achieved
how would an enterprise try to increase profit?
by looking for ways to increase sales and decrease costs
increasing prices and lowering number of employees
what are social enterprises and charities more interested in?
providing a service
may look for ways to increase the number of people they help
keeping prices and costs low will be important so more people can be helped
what does planning help with and what are some planning tools?
its important to help achieve aims and objectives and allows an enterprise to use its resources and time effectively to help prepare for events
action plans, business plans, and marketing plans, as well as plans for negotiations and meetings
what would be the outcome of poor planning?
your enterprise failing
what does an action plan do for you?
provides a step by step framework of individual activities needed to complete a project
shows what needs to be done, when it needs to get done, by whom it needs to get done and how progress will get monitored
what does an action plan help an entrepreneur do?
- better understand what needs to get done so the right things get done
- identify key stages of a project by having to think carefully about what they want to do - to stop them from doing the wrong things
- identify potential obstacles and issues that might come up to avoid them
- keep track of who is responsible for what
- by acting as a checklist to monitor progress
define “prepare”
present information in a suitable format
what is a significant activity?
one that would have a major negative impact on the project if it went wrong or didnt happen on time
what does monitor mean? what is the definition?
to check or review the progress of something over a period of time
why is monitoring important?
to know if you are on track, and to check whether a task has been completed or not
what do you need to do when you monitor?
check progress of project
identify actions to be taken
allow for alternative steps if necessary
know stages are completed in the right order and on time
what are some monitoring methods?
- checklists
- data
- measuring customers needs or customer satisfaction
- testing to check that a project is fit for a purpose
- reporting
what should you keep in mind when choosing a monitoring method?
- what is its purpose
- is it simple to use?
- does it provide the info you need?
what do you need to do for an action plan to be successful?
check and review what is happening on a regular basis so you can be aware of problems asap and adapt accordingly
what is a business plan?
it is a formal document that gives the aims of the enterprise and outlines ways those aims will be achieved
why is a business plan important?
it describes what the enterprise is going to do, and makes the entrepreneur think carefully about the aims of the business, market, competition, financial needs, and resources
can help to reduce risk
what are some reasons a business plan is used?
- acts as a focus so entrepreneur thinks about what they are doing and why it is good
- provides info about market, competitors, and potential demand to help with marketing decisions
- identifies costs and financial needs to help arrange finance in advance and avoid cash flow problems
- provides evidence to show an idea is possible to persuade people to offer finance
- makes entrepreneur think ahead to avoid risks
- produces targets to measure success
state the 5 contents of a business plan
- preliminary info: details about the business including name, address, objectives, organisational structure + description of idea
- marketing: size of market, competition, pricing, promotion, product + place
- operations: how will the enterprise work, production details, resources
- human resources: number of employees and who will have which roles
- financial: key targets, cash flow forecast, break even, budgets, income statement, balance sheet, revenue, costs, etc.
what will the enterprise consider when monitoring their business plan?
- financial data: cash flow profit sales costs revenue
- operations data: total level of output + output per employee
- marketing data: feedback from customer surveys
- HR data: number of employees, attendance level hours worked
why should you update a business plan? what are the factors that might change?
- achieved original objectives(!)
- costs change
- external factors change like population
- changes in market or competition
- new products developed
- need additional finance
- growth
- change of ownership or management
