Business Planning Flashcards
What is a business plan
a statement of a companies direction
Types of business plans
- Start up plans, for new businesses
- Growth plans, for a business looking to expand (potentially into a new area)
- Corporate, a top level business plan looking at the business as a whole
- Departmental, this is more strategic and looks at an individual teams objectives to contribute/ achieve the overall business objectives in the corporate business plan
- Operational plan, this is much lower level and looks at the day to day running’s of a business
How is a business plan structured
- an executive summary
- a business description
- market analysis
- marketing and sales plan
- competitor analysis
- operating plan
- detail of companies structure
- financial analysis
- objectives and goals
What is market analysis, why is it required?
analysing a business and the market it is in/ looking to enter is a key part of planning. This can involve the analysis needed to set up a new business, to manage change in an existing one, or to identify areas for growth or investment.
Market research is essential for a business, whether it is at the start-up stage or more mature, to understand the market in which it operates and its trends, as well as potential threats and opportunities.
Analysis tools
strengths, weaknesses, opportunities and threats (SWOT) analysis or Political, economic, sociological, technological, legal and environmental (PESTLE) which is based on the six named external factors. A business can consider these to assess the context in which it is operating for planning purposes. For example, what wider economic factors are affecting business performance? What technological innovations might help make the business more effective?
What is a marketing/ sales plan for?
To understand the most effective ways to advise/ market the business, including the targeted audience, form of marketing (social media, tv, business cards), frequency and cost
What does an operating plan include?
detail on day to day running’s, logistics of the business e.g. premises, vehicles, plant/ materials
Business structures
businesses have a variety of structures, including sole traders, limited companies and partnerships. A sole trader is a simple way to set up a business, but you are then personally liable for its debts. To avoid such liability, you could form a limited company or limited liability partnership (LLP). This comes with greater accounting requirements but provides tax planning and pension benefits.
What financial analysis should be included in a business plan?
financial documents such as cash flow statement (actual & forecast), profit & loss accounts, balance sheets give an idea of the companies financial standing.
Analysis of this will include understanding who owes money to a business – its debtors – or to whom the business itself owes money – its creditors.
Assessing the businesses liquidity (how quickly a business can convert assets into cash), indicates ability to meet short-term financial obligations.
Review of net profit (Gross profit- operating expenses, tax & interest) gives a good indication of business health and available funds, whereas turnover can mask the actual cost of operations.
Measuring financial ratios, such as working capital, debt and equity, profit margin and current ratio, can help to analyse a business’s performance and inform planning.
Objectives/ goals to be included in business plan
Goals are what a business wants to achieve in the short, medium and long term. Goals are most effective when they are specific, measurable, achievable, relevant and time-bound (SMART). It is essential to align a business’s goals with its wider corporate objectives. These are usually developed from the mission statement and set by those at the top of an organisation.
Legislation business should be aware of
Equality Act 2010- This relates to how employees treat their staff, clients/ customers etc. A company can not discriminate against the protected characteristics
Companies Act 2006- is the piece of legislation that serves as the main source for company law governing the UK. It includes information on director duties, reporting requirements and measures affecting all companies whether private, public, SME, etc.
DPA 2018- the processing of information relating to individuals, including the obtaining, holding, use or disclosure of such information
What is the main objective of the TfL business plan
The TfL business plan sets out the businesses plan to secure our funding/ financial stability following Covid as well as how we will deliver the Mayors Transport Strategy
How do you/ your business assess the feasibility of a project
This is usually undertaken by our sponsorship team who look at the budget available, the benefits the project can provide to the business, its value for money and the potential return on investment
How does a private sector business plan differ from a public sector?
Private sector focuses on profits and shareholder returns whilst public is achieving the maximum social benefit within the funding available
