PLANNING: success + failure Flashcards
importance business plan
- assist SME owner when arranging finance for business
- acts as link or bridge between business owner’s ideas and actual operation of business
- sets goals and decides how to achieve them
management: staffing and teams
-must make best use of limited resources
- responsible for business achieving goals
recruitment: outsourcing to hire best people - success
skills audit: process that established current skills of employees and future skill requirements
skills inventory: infro on skills, abilities and qualifications of existing staff
aims of skill audit
indentify:
skills will give competitive advantage
weaknesses that will threaten business survival
trend analysis
what: examination of business’s financial infor or total sales are two of the most common applications of trend analysis
help forcast:
- potential sales
- total revenue
- total operating costs
- gross and net profits
- availability of labout
Identifying and sustaining competitive advantage
price/cost strategy: lowest production costs, reduce product price - important not to compromise products quality in relation to competitions products
differentiation strategy: offer new value, quality, product, brand image, service/flexibility
ensuring long term success: difficult if unable to develop competitive advantage
Avoiding overextension of financing and other resources
results in excess expenditure that is financed primarily by external sources such as banks
causes: using hire purchase/leasing commitments such as cars, equipment, office furniture
using technology
in machinery and workplace environment
economic conditions - failure
lower levels of spending: reduced capacity to sell goods and services and profits will decline
rising unemployment - cannot support current employee numbers when sales and profits decrease/negative
decreased production: output decrease in response to fall in consumer spending
