Chapter #5 - Business Planning

Question 1

Aim

Answer 1

An overall goal that an enterprise wants to achieve

Question 2

Objective

Answer 2

A specific target that an enterprise wants to reach so that it cab achieve its aims

Question 3

Are aims long or short term?

Answer 3

long-term

Question 4

Are objectives long or short term?

Answer 4

short-term

Question 5

What should you keep in mind when setting objectives?

Answer 5

(SMART)
* specific
* measurable
* achievable
* realistic
* time based

Question 6

objectives may include:

Answer 6

• survival
• Maximizing profit
• Growth
• Satisfying profit
• Sales growth
• Sales revenue
• Cash flow
• provide a good service
• Social
• Environmental
• Ethical
• Not for profit
• Legal compliance

Question 7

Why is it important for enterprises to plan aims & objectives?

Answer 7

It allows an enterprise to use its recourses time effectively and help prepare for unexpected events.

Question 8

Action plan

Answer 8

A list of tasks that need to be completed in order for a set goal to be achieved.

Question 9

What different types of a plan can an enterprise use?

Answer 9

*action plans
* business plans
* Marketing plans
* Negotiations
* Meetings

Question 10

What is the purpose of action plan?

Answer 10

• Better understand what needs to be done
• Identify key stages of a project
• Identify possible risks + obstacles that must be resolved so that they can be managed or avoided
• Keep track of who is responsible what when
• By acting as a checklist to monitor progress so that everything is done on time
• Any problems and delays can be spotted fast and suitable steps can be taken before it’s too late

Question 11

What are the stages of an action plan?

Answer 11

1. set the goal you want to achieve
2. identify key actions -what do you need to do to achieve your goal?
3. break actions into small, simple activities
4. put activities into a logical order
5. decide now much time will be spent on and who will do each activity
6. monitor - how will you check if each stage is completed?
7. start implementation
8. review and update plan as you carry out each actvity. review and update plan as you carry out each activity
9. ACHIEVE GOAL

Question 12

Monitor

Answer 12

To check or review the progress of something over a period of time

Question 13

What are the different methods of monitoring action plans?

Answer 13

• checklists (to-do lists, shopping lists)
• data (sales numbers, budgets, production numbers)
• measuring customer needs or customer satisfaction through surveys and interviews

Question 14

Business plan

Answer 14

A formal document that gives the aims of the enterprise and outlines ways those aims will be achieved.

Question 15

Why is it important to update action plans?

Answer 15

Because, circumstances tend to change. It allows you to be aware of problems as soon as possible and adapt accordingly.

Question 16

What is the purpose and importance of a business plan? (list at least 5)

Answer 16

• Acts as a focus so the entrepreneur thinks about what they are doing and why it is a good idea
• Provides info. about market, competitors, and potential demand.
• Identifies costs and financial needs
• Provides evidence to show idea is possible
• Makes entrepreneur think ahead.
• Can be used to produce targets
• Helps with organization

Question 17

What doe info. about the market, competitors and the potential demand help with?

Answer 17

This can help with marketing choices.

Question 18

What does identifying the costs and financial needs help with?

Answer 18

This helps the enterprise arrange finance in advance and avoid potential cash flow problems.

Question 19

What are targets good for?

Answer 19

To measure success

Question 20

What does providing evidence to show idea is possible help with?

Answer 20

This can be used to persuade others to offer credit or finance. Lenders will want to know they will be repaid.

Question 21

What can thinking ahead help with?

Answer 21

This may help them to identify and avoid risks, or put in place measures to reduce them.

Question 22

Contents of business planning

Answer 22

• Preliminary information
• Marketing
• Operation (production)
• Human recourses
• Financial

Question 23

Preliminary information

Answer 23

Examples:
Details of the business including name and address, objectives, organizational structure, and simple description of the proposed idea.

Question 24

Marketing

Answer 24

Example:
* size of market
* competition
* pricing
* promotion
* product
* place

Question 25

Operations (production)

Answer 25

Examples:
* how enterprise will work
* production details
* recourses

Question 26

Human recourses

Answer 26

Examples:
* number of employees
* who will have which roles

Question 27

nothing!!!

Question 28

Methods of monitoring business plans

Answer 28

• Financial data
• Operations data
• Marketing data
• Human recources data

Question 29

Why should you update a business plan?

Answer 29

• Costs change
• External factors such as population change
• Changes in market or competition
• New products developed
• Need additional finance
• Change of ownership or management
• Growth
• Achieved original objectives