Business planning

Question 1

What is a business plan?

Answer 1

A business plan is a document provided to lenders/investors which sets out the reasoning and evidence to obtain funding.

The plan will highlight the reasons for the set up of the business as well as provide an outline of the goals and objectives along with how and why these are achievable.

The plan will assess the benefits and value of the business idea for investors/lenders.

The plan will cover: the main idea, objectives, sales reports, financial forecasts, any potential issues, goals and dates to achieve said goals.

Question 2

What is your company’s business plan?

Answer 2

• Broadly speaking my company’s summary business plan for 2022/2023 covers 7 key areas which include:

Strategic framework

The specifics of the framework are to be detailed in the coming months but the framework will be based on four key foundations for the framework will be:

• For our people: as we transfer to an Employee owned trust those people who make up the company are more important than ever. Measures will include clear career progression, management support, engagement and wellbeing.
• For our clients: New measures will identify how effectively client offers are meeting our demand for growth, how satisfied clients are and how effectively we innovate for them.
• For our resilience: Measures will focus on robustness as a business - including financial security and quality of data around KPIs.
• For our future: Measures will focus on how the company will give back and ensure we are sustainable.

People

• Focusing on wellbeing, engagement and happiness. With covid restrictions ceased the company is wanting to provide more opportunities for in person training and collaboration - summer training day planned for this year.
• Encouraging diversity and celebrating differences.

Clients

• Encouraging the return of face to face meetings and engagement with clients.
• Rising inflation / volatile markets- pension funds will deem commercial property safe investments which will benefit our firm, also negotiating uplifts in fees to tackle inflation.
• Expected that industrial + logistics will remain one of strongest market performers, HOL also want to exploit the increase in shopping centre investment which clients are now converting into warehousing or mixed use resi.

Resilience

• ESG has now become the norm. To ensure we are positively impacting communities we need to try and deliver this through our clients.

Innovation

• Creating new products and services - drone surveys now growing and offering solar PV services too and using better technology internally to increase collaboration.

Budget:

• Wanting to achieve a turnover of at least £64m and looking to achieve a net profit of at least 15%.

Question 3

What is gross profit?

Answer 3

Net turnover less staff costs allocated to your projects via timesheets

Question 4

What is the importance of a business plan?

Answer 4

A business plan is a very important strategic tool, It will help businesses collectively focus on the specific steps necessary to achieve their business objectives that can be short and long term.

Question 5

How do you job updates aid your clients?

Question 6

How does your company measure performance of its’ employees?

Answer 6

• Performance is generally measured through my project related time (time spent working that is earning the firm money), sums billed and write off for instructions.

Question 7

What are the different types of business plan?

Answer 7

Start up plan – how the business will operate long term
Annual Growth Plan – financial, marketing and operations
Scenario Plan – for companies in rapidly changing industry

Question 8

What are the essential elements of a business plan?

Answer 8

• Overview
• executive summary
• general company description
• opportunity
• industry and market
• strategy
• team
• marketing plan
• operational plan
• financial plan
• appendix

Question 9

What are the key financial indicators that can allow financial benchmarking?

Question 10

What is capital?

Question 11

What is stock?

Question 12

What are creditors?

Question 13

What are debtors?

Question 14

What forecasting techniques can a firm use for forecast financial performance?

Question 15

What is an Employee Owned Trust? What are the positives and benefits?

Answer 15

• EOTs are a government initiative aimed to promote employee ownership by giving business owners the opportunity to sell their shares to an employee owned trust free from capital gains tax (tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value). EOTs do not involve direct share ownership by employees, rather a controlling interest in the company is transferred to an all-employee trust held for the benefit of employees. Employees hold controlling stake in company.

Positives:

• Allows quick and streamlined exit route for shareholders (sell their shares).
• Allows an exit where there is no obvious third party purchaser.
• Share capital available to incentivise management and key employees.
• Owner (s) can still retain some involvement (up to 49%),

Negatives:

• If the company’s performance declines after sale to an EOT then repaying the funding used to buy the shares can be problematic.

Question 16

What is a partnership?

Answer 16

In a general partnership, all parties share legal and financial liability equally. The individuals are personally responsible for the debts the partnership takes on. Profits are also shared equally. The specifics of profit sharing will almost certainly be laid out in writing in a partnership agreement.

Question 17

What is your companies short and long term goals?

Answer 17

Short term

Continue to provide a high level of service to our existing clients.

Encourage diversity and inclusion within our firm by setting up an internal board to guide and inform policy.

With COVID subsiding we are now encouraging face to face client meetings and events to increase our client base and provide a good quality service.

Long term

Long term sustainability

Move into markets that are growing such as out of town shopping centres that are being converted into warehousing due to its boom - we are well placed in this sector.

Question 18

How did you generate the fee? what other methods could you use?

Answer 18

• Hourly charge
• % of project value
• Fixed fee

Question 19

What is a SWOT analysis?

Answer 19

SWOT analysis is analysing Strengths, Weaknesses, Opportunities and Threats. Competitors, prices of services, and consumer trends

Question 20

What is the difference between a Sole Trader, Partnership, Limited, and a LLP?

Answer 20

Sole Trader A person who is the exclusive owner of a business, entitled to keep all profits after tax has been paid but liable for all losses (unlimited liability).

Partnership A business organization in which two or more individuals manage and operate the business. Both owners are equally and personally liable for the debts from the business.

Limited In a limited company, the shareholders’ liability is limited to the capital they originally invested. If such company becomes insolvent, the shareholders personal assets remain protected. Shares in a private limited company are not offered to the general public (distinguishing it from a public limited company - plc.)

Limited Liability Partnership (LLP)A limited liability partnership (LLP) is a partnership in which some or all partners have limited liabilities. It therefore exhibits elements of partnerships and corporations. In an LLP, one partner is not responsible or liable for another partner’s misconduct or negligence.

Question 21

What do you look for when analysing consultant fee proposals?

Answer 21

• Total fee and how it was calculated.
• Level of resources; seniority, experience and allocation;
• Fee drawdown;
• Agreement of client Terms and Conditions;
• Agreement of client payment terms / period;
• Agreement of scope of services;
• Exclusions;
• Assumptions e.g. programme.

Question 22

What might be included in a SWOT analysis?

Answer 22

SWOT analysis is analysing Strengths, Weaknesses, Opportunities and Threats. Competitors, prices of services, and consumer trends

Question 23

Give me some examples of some new business areas you could considering moving into.

Answer 23

• Asset management
• Drone surveying
• Environmental services - Solar PV consultancy.

Question 24

How can/have you measure performance on a project?

Answer 24

With the use of KPI’s - for me it is time spent on the job in comparison to the job fee and the resulting profit or write-off (time / resources spent on instruction that cannot be feed).

Question 25

What is a limited company?

Answer 25

General form of incorporation that limits the liability undertaken by shareholders. The liability of a company’s members is limited to their stake in the company.

Question 26

What is the difference between LLP and Ltd?

Answer 26

Partnership must have a minimum of 2 partners, a Ltd company can be non-profit/charity whereas LLP is always profit making. Ltd pays Corp tax and LLP doesn’t as they are classed as self employed.

Question 27

What is a business plan ?

Answer 27

A business plan is a formal written document containing the goals of a business, the methods for attaining those goals, and the time-frame for the achievement of the goals.

Question 28

What affect has Covid 19 had on your business planning ?

Answer 28

High contractor demand, material delays, labour shortages etc

Question 29

What is a PEST analysis?

Answer 29

This is a structured method of analysing the key factors influencing markets (the
demand side).
▪︎These factors are;
▪︎Political influences
▪︎Economical influences
▪︎Socio demographical influences
▪︎Technological influences
▪︎Environment

Question 30

What is a SWOT analysis?

Answer 30

It is a structure analysis of the market (demand side). It is used to analyse internal :
• Strengths
• Weaknesses
• Opportunities
• Threats

Question 31

How do companies write a business plan?

Answer 31

The analysis of the markets and industry enable companies to identify business opportunities and critical success factors in their markets and industry.

Companies should focus their resources in developing their competences in the critical success factors.

This then leads to the development of goals and objectives with their associated strategies and actions.

Question 32

What is a Key Performance Indicator?

Answer 32

A measurable value to determine the success of project/venture.

Question 33

What is PESTLE analysis ?

Answer 33

Marketing framework or tool used by marketers to analyse and monitor the external marketing factors that have an impact on an organisation. Resulting information then used to identify threats and weakness used in a SWOT analysis.

• P- Political
• E- Economic
• S- Social
• T- Technological
• E- Environmental
• L- Legal
• E- Ethical

Question 34

Can you give me some example of Economic Factors from PESTLE analysis ?

Answer 34

Examples include :
• Economic growth
• Interest rates
• Exchange rates
• Inflation,
• Disposable income of consumer

Question 35

How did you generate the fee? what other methods could you use?

Answer 35

• Hourly charge
• % of project value
• Fixed fee

Question 36

How do you protect yourself?

Answer 36

• Ensure that all correspondence is documented, phone calls, emails and messages.
• Ensure there is a service agreement in place which is clear, transpiration and understood by myself and the client.
• I will need to ensure I am competent to do the work and have suitable PII cover.
• Agree any limitations for the survey, agree timescales, a break down of the fee so its clear (fee proposal) and reference my firm operates a complaint handling procedure.

Question 37

What do you do to help you business remain solvent ?

Answer 37

• Forecasting
• Reviewing profit margins
• Marketing
• Ensuring repeat custom
• Working within my competence.

Question 38

How do you know if your company is in profit?

Answer 38

By determining the net profitability over a financial year which will be gross minus overheads.