Small business planning (Chapter 3) Flashcards
What is planning?
planning is the process of formulating objectives and determining how to achieve them
What is a business plan?
A business plan is exactly what it says, it’s spelt out quote clearly - it’s a plan for a business. It is a written statement of the goals and objectives for the business which involves the steps to be taken to achieve them. So it’s the summary and evaluation of the business concept.
What are the advantages of a business plan?
. helps test the viability of the business
. assists the business to be proactive rather than reactive
. assists in maintaining the business operation, especially focusing attention on the goals and objectives
. indicates the owners ability and level I’m commitment
. forces the small business owner to justify his or her plans and actions
. identifies the business’ strengths and weakness’
What elements should a typical business plan have?
. an executive summary (one page document describing the business and it’s objectives$
. an operations plan (outlining how the bushes will be set up and the human resource needs)
. a financial plan (which details how the business will be financed and projected cash flow, revenue, expense and profit)
. a marketing plan (outlining key information from the industry the business will be entering and how it fits in. and the marketing strategy of the business)
What are resources?
it is any person or product that will help in the production of a good or service.
What human resources?
they are the employees who provide their time, energy and effort. this resource needs to be paid as services are provided.
What are physical resources?
these resources which are referred to as assets and are purchased as they are needed. (eg. computers, machinery, office equipment and stock)
What is an asset?
it is any item of value owned by the business.
