The business planning process

Question 1

What is break-even analysis

Answer 1

It is used to determine the level of sales that needs to be generated to cover the total cost of the production.

Question 2

Define budget

Answer 2

The business’s financial plan for the future.

Question 3

Evaluation

Answer 3

The process of assessing whether the business has achieved stated goals.

Question 4

Grants

Answer 4

Any monetary or financial assistance that does not generally have to be repaid.

Question 5

Modifying

Answer 5

The process of changing existing plans and using updated information to shape the future

Question 6

What is a business plan?

Answer 6

It is a written statement of the goals for the business and steps to be taken to achieve them.

Question 7

What is a situational analysis?

Answer 7

It refers to a collection of methods that managers can use to anaylse a business internal and external environment.

Question 8

What acronym can be used during the planning process to determine internal and external factors? What does this type of analysis stand for?

Answer 8

SWOT.
S- Strength
W- Weakness
O- Opportunities
T- Threats

Question 9

What is a vision statement? What does it do?

Answer 9

It broadly states what the business aspires to become. It guides and directs the business owners, managers, and employees.

Question 10

What are the goals and objectives that are determined by different levels of management?

Answer 10

1. Strategic goals
2. Tactical objectives
3. Operational objectives

Question 11

What is longer term growth?

Answer 11

It is the ability of the business to continually expand. It depends on a business ability to develop and use its assets structure to increase sales, profits, and market share.

Question 12

What is the next stage in the planning process (after SWOT)?

Answer 12

It requires organising resources: human effort, time, money, equipment, and materials - needed to fufill the plan.

Question 13

What are the key business functions?

Answer 13

1. Operations
2. Finance
3. Marketing
4. Human resources

Question 14

What are forecasts (projections)?

Answer 14

They are the business predictions about the future.

Question 15

What is total revenue? State the formula.

Answer 15

The total amount recieved from the sales of goods or services.

P x Q = TR

Question 16

How can costs be classified? Define each one.

Answer 16

It can either be classified into fixed or variable costs.

Fixed costs - costs that do not vary regardless of how many units of a good or service are produced.

Variable costs - costs that depends on the number of goods or services and decreases when fewer goods and services are produced.

Question 17

Define cash flow projections.

Answer 17

Shows the changes to the cash position brought about operating, investing and financial activities of the business.

Question 18

What is evaluation?

Answer 18

The process of assessing whether the business has achieved stated goals.

Question 18

What is (a) grant?

Answer 18

Any monetary or financial assistance that does not generally have to be repaid.

Question 19

Define modifying.

Answer 19

The process of changing existing plans an using updated information to shape future plans.