Topic 3: the business planning process

Question 1

list stages in the business planning process

Answer 1

sources of planning ideas
vision,goals and/or objectives
organising resources
forecasting
monitoring and evaluations
taking corrective actions

Question 2

what goes into the sources of planning ideas

Answer 2

situational analysis

Question 3

what do you do in a situational analysis(6)

Answer 3

Identify the competitive advantage of the business’s products over those of its competitors

Identify factors that limit present operations

Identify competitors

Identify trends in the market

Asses the effectiveness of marketing strategies

Asses market share and where your business is compared to others

Question 4

what do you do when looking at the vision, goals,and/or objectives phase

Answer 4

you outline what your business wants to get to in the future and what goals must be completed in order to get there

Question 5

what is a mission statement

Answer 5

an outline of what the ambitions of the business are, and what it hopes to achieve

Question 6

what are goals

Answer 6

the overall accomplishments that an organisation plans to achieve in the future.

Question 7

what does the organising resources phase refer to

Answer 7

the marketing mix

Question 8

what goes into the forecasting phase of the business plan(3)

Answer 8

total revenue
total cost
break even analysis

Question 9

what is total revenue

Answer 9

the sum of all monies received by the business

Question 10

what is the equation for total revenue

Answer 10

Total revenue= price per unit x number of units sold

Question 11

what is total cost

Answer 11

all cost needed to run the business.both variable and fixed costs

Question 12

what are fixed costs

Answer 12

costs that don’t change

Question 13

what are variable costs

Answer 13

costs that changes with the amount of output

Question 14

what is the equation for total costs

Answer 14

total cost= fixed costs + variable costs

Question 15

what is the equation for profit

Answer 15

Profit= total revenue - total cost

Question 16

what is a break even analysis

Answer 16

a financial planning tool that can be used to forecast how many items to be produced and sold in order to cover costs.

Question 17

what things you will need to create a break even analysis

Answer 17

break even point
total revenue
total cost
total variable costs
total fixed costs

Question 18

what is the equation for the break even point

Answer 18

total fixed costs/unit price- variable costs per unit

Question 19

what is the equation for total revenue

Answer 19

total=quantity x price per unit

Question 20

what are cash flow projections

Answer 20

the prediction of future in flow and outflow of money

Question 21

what is monitoring

Answer 21

checking and recording the performance of the business

Question 22

what is evaluating

Answer 22

assessing the performance of the business.

Question 23

why are both monitoring and evaluating important for business planning

Answer 23

it allows you to check progress and assess if any changes are needed

Question 24

what is a sales report

Answer 24

a comparison of past years level of sales

Question 25

where are budgets and profit usually included in

Answer 25

in the goals and planning stage.

Question 26

why is corrective action necessary in some situations

Answer 26

because if they are not addressed you will deviate to much from the business plan and may make it harder to predict what will happen