*EP APC Business Planning Flashcards
What is a business plan?
A business plan is a written document that describes in detail how a business—usually a startup—defines its objectives and how it is to go about achieving its goals.
A business plan lays out a written roadmap for the firm from marketing, financial, and operational standpoints.
Why is business planning important?
important and strategic tool to help focus on the specific steps necessary to make business succeed.
Helps them to achieve short-term and long-term objectives and plan against any risks.
Why do you have to ensure fee forecasting is accurate?
It will enable you to assess the performance of the team / business
Will ensure you can plan your income and expenditure correctly.
How has COVID 19 affected business planning?
During the pandemic, planning becomes difficult in an uncertain market/economy.
Business activities become short term and reactionary.
Potentially reduce staffing and discretionary expenditure.
Focus on maintaining income rather than growing it.
Post Covid, need to plan for a similar event. Office space, staffing numbers, PPE and H&S policy.
READ UP ON RICS COVID 19
How can a business monitor its performance?
- setting and assessing goals and target
- Monitoring KPIs
- competitor analysis
What was your companies performance last year?
TBC
What are your companies short, medium and long term goals?
TBC
Explain a sole-practioner?
an unincorporated business that has just one owner who pays personal income tax on profits earned from the business.
easiest type of business to establish or take apart, due to a lack of government regulation. As such, these types of businesses are very popular among sole owners of businesses, individual self-contractors, and consultants.
Explain a partnership?
A partnership is a formal arrangement by two or more parties to manage and operate a business and share its profits.
There are several types of partnership arrangements. In particular, in a partnership business, all partners share liabilities and profits equally, while in others, partners may have limited liability.
Explain LLP?
Limited Liability Partnerships - LLPs are a flexible legal and tax entity that allows partners to benefit from economies of scale by working together while also reducing their liability for the actions of other partners.
i.e. if partnerships fail, creditors cannot go after a partner’s personal assets or income.
A partner’s liabilities is limited to the amount they put into the business.
Explain PLC?
A public limited company is a public company which offers shares of stock.
Shareholders have limited liability.
Allows a company to raise capital.
However, they are subject to increased scrutiny and regulation?
Explain limited company?
They are incorporated at Company House as a separate legal entity - the company operates separately to the owners.
The company is separate to it’s owners, it’s its own entity.
The liability of shareholders is limited to their stake in the company.
What is corporate social responsibility?
Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable—to itself, its stakeholders, and the public.
By practicing corporate social responsibility companies can be conscious of the kind of impact they are having on all aspects of society, including economic, social, and environmental.
What is your companies CSR policy?
TBC
What is the RICS business plan?
RICS Business Plan 2018 - 21
Long term goal
- wants to remain demand
- will do this by inspiring the next generation
Risks:
- Loss of trust in profession
LOOK FOR 2022 UPDATE
What is the RICS Covid-19 Recovery Plan 20-21?
Details how the RICS is planning to mitigate the risks of COVID.
i.e. acknowledge that some firms might not be able to afford membership fees - will offer concessions for financial hardship and delayed payments.
CHECK FOR UPDATE
What are KPIs and why are they used?
Key performance indicators.
A way of measuring performance and health of your business. Offers an overview of your company.
What are some KPI metrics used?
Individual = Billing - monthly and annual, and fee per job
Company = Revenue, Profit
Estate Agency = Deals, ave fee, Viewings, offers, applicants registered, phones made etc.
What are some of the key things to include in a business plan (An, Re, M/C A, P/S, Ma, FP)?
- Analysis of some of the key risks and opportunities facing the business
- Resources required to service clients
- Market/competitor analysis
- Products and services
- Marketing and sales strategy
- Financial plan
What sort of financial planning would you use (3)?
Budgets, cash flows and financial/audit controls
What are the different forms of business vehicle (4)?
Sole practitioner, partnership, LLP, limited company and PLC
What is a Mission Statement?
A formal summary of the company aims and values.
A mission statement is used by a company to explain, in simple and concise terms, its purpose(s) for being. The statement is generally short, either a single sentence or a short paragraph.
What is a SWOT analysis?
Internal study undertaken by a business to identify its strengths, weaknesses, opportunities and threats.
How does an up-to-date business plan help an organisation?
- Strategic tool to align activities with targets
- Helps set budgets and resources
- Understand market and competitors
- Attract funding/investment
What use is building target lists for business development?
A prospect list is a group consisting of people who may potentially be interested in your product offering or who may benefit from your company and its product or service. Prospects are individuals who have never had contact or very minimal contact with your company
Why is business development important to achieving consistent revenue for a firm?
Building a prospect list is essential for establishing a solid customer base as it provides you with a pool of potential customers who could be treated, nurtured, and followed-up on. Effective prospecting requires planning, organization, and management to ensure each lead potentially turns into a committed customer.
What are Porter’s Five Forces?
Used to analyse competitiveness of industry.
- Barriers to entry
- Substitute products
- Bargaining power of suppliers
- Bargaining power of consumers
- Rivalry amongst existing firms
What makes up a business plan?
- The vision
- Objectives and goals
- strategies and actions in place to achieve goals.
Why is market appropriate business planning necessary?
To ensure realistic goals are set for the specific market
What is fee forecasting?
Assessing the level of fees chargeable over a future period. E.g. major works fees.
What is a fee budget?
Level of fee achieveable with current level of resource
How do you assess potential new business?
- Lending charge - first or second
- Risk of lending - second charge bridge
- Lenders property specialism - comm, resi etc
- Level of requirements - against fee
- Likely acceptable fees
How did you set your targets?
AWH = monthly and annual billing
KFH = Monthly and annual billing with additional micro targets and KPI’S
What is a Departmental business plan
a planning document focused on a specific department within a company.
What is an Operational business plan?
highly detailed plan
How a team will contribute to the achievement of the organisation’s goals.
What is a Corporate business plan?
defines the strategies that the employees will take to meet the business’ goals and missions.
What are different types of organisational structures?
- functional
- breaks up a company based on the specialization of its workforce
- divisional
- structures its leadership team based on the products, projects, or subsidiaries they operate
- flatarchy
- it flattens the hierarchy and chain of command and gives its employees a lot of autonomy.
- matrix
- structure matrixes employees across different superiors, divisions, or departments. An employee working for a matrixed company, for example, may have duties in both sales and customer service.
What is benchmarking
a process of assessing your current performance against a peer group of organisations of comparable scale and complexity.
Evaluating by comparison with a ‘standard’.
What are ratios ?
- Financial ratios are created with the use of numerical values taken from financial statements to gain meaningful information about a company.
What are Methods for financial benchmarking
Current ratio
Gross profit margin
Net profit margin
What is Working capital
Working capital represents the difference between a firm’s current assets and current liabilities. Working capital, also called net working capital, is the amount of money a company has available to pay its short-term expenses.
What is a stock
A stock (also known as equity) is a security that represents the ownership of a fraction of a corporation
what is a debtor?
A debtor is a company or individual who owes money.
What is a Creditor?
A creditor is an entity (person or institution) that extends credit by giving another entity permission to borrow money intended to be repaid in the future.
What are Forecasting techniques
Primary forecasting techniques help organizations plan for the future
Name some a Forecasting techniques
Qualitative forecasting is a method of making predictions about a company’s finances that uses judgement from experts.
Quantitative forecasting is an objective, data-based process used to make accurate predictions to guide future business decisions. … A business may use quantitative forecasting methods to track any patterns that appear over time.
Planning to meet corporate objectives
Short-Term Planning
- Short-term planning looks at the characteristics of the company in the present and develops strategies for improving them
Long term
- Long-term planning reacts to the competitive situation of the company in its social, economic and political environment and develops strategies for adapting and influencing its position to achieve long-term goals.
What is PESTLE Analysis
management method whereby an organization can assess major external factors that influence its operation in order to become more competitive
Political
Economic
Social
Technological
Legal
Environmental
Functional Organisational Structure
groups employees according to a specialized or similar set of roles or tasks
Organisational structures - Divisional
splits employees into segments that correspond to particular products, services or markets.
Organisational structures – Matrix
Matrix = a structure in which there is more than one line of reporting managers
Organisational structures - Flatarchy
allows for more decision making among the levels of an organization and, overall, flattens out the vertical appearance of a hierarchy.
RICS business plan
RICS Business Plan 2021-2022
- Responding to the immediate financial implications of the pandemic and reshaping itself over the last year to cope with an agile shift to new ways of operating.
- RICS is also developing plans to better support the profession and the leadership contribution it can make to society in a post COVID-19 world as part of our work following the major consultation with members and stakeholders undertaken in early 2021.
RICS Business Plan 2018-2021
- “Through our credential and our professional standards we will create confidence in markets and be known for effecting positive change in the built and natural environments.”
COVID-19 Recovery Business Plan 2020-21
- A global professional body fit for the 21st century shaping the built and natural environments
- continue the existing strategic direction for RICS and the profession, and delivers on our strategic objectives, in the context of a significantly changed environment.
- While we also set out a 3-year position, our focus is firmly on the next 12 months and establishing a new normal baseline to our forward business planning. 2020-21 is a reset and recovery business plan year, but our aim is to end the year having pioneered a new, more resilient RICS, fit for the future and capable of responding rapidly to ongoing and significant socio-economic changes and trends that impact our profession.
What is the GROW model.
GOAL
REALITY CHECK
OPTIONS
WAY FORWARD
