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RICS APC > Business Planning Level 1 > Flashcards

Business Planning Level 1 Flashcards

(47 cards)

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1
Q

Why are businesses analysed?

A
  • analyse the need to set up a new business
  • to manage a change in an existing one
  • identify areas for growth and investment
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2
Q

Name some business analysis methods?

A

SWOT
PESTLE

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3
Q

What is a PESTLE Analysis?

A
  • acronym for Political, Economic, Social, Technological, Legal & Environmental
  • a way of understanding & reviewing how external forces may impact the business
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4
Q

What is the P in PESTLE for?

A

Analyses Political forces such as:
- political stability
- corruption
- foreign trade policy
- tax policy
- funding grants

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5
Q

What is the first E in PESTLE for?

A

Analysis Economic forces such as:
- economic growth
- interest rates
- inflation
- disposable income of consumers
- labour costs

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6
Q

What is the S in PESTLE for?

A

Analyses Social forces such as:
- population growth
- age distribution
- cultural barriers
- consumers views
- workforce trends

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7
Q

What is the T in PESTLE for?

A

Analyses Technological forces such as:
- emerging technologies
- maturing technologies
- copyright and patents
- production & distribution
- research & investment

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8
Q

What is the L in PESTLE for?

A

Analyses Legal forces such as:
- regulation
- employment laws
- consumer protection laws
- tax policies
- anti-trust laws

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9
Q

What is the last E in PESTLE for?

A

Analyses Environmental forces such as:
- climate
- environmental policies
- availability of inputs
- corporate social responsibility

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10
Q

What is a SWOT analysis?

A
  • a strategic planning method used to evaluate strengths, weaknesses, opportunities & threats involved in a project or business venture
  • can be used as a basis for a business strategy
  • can help to identify both internal & external factors that affect its performance and to understand current & future potential
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11
Q

What are the various business types or structures?

A

Business Link identifies 5 types of business structures:
- Sole traders
- Limited companies
- Partnerships
- Limited liability partnerships
- Franchise

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12
Q

What do you know about sole traders?

A
  • very simple way to set up a business
  • but you are personally liable for debts
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13
Q

What do you know about limited companies?

A
  • avoids personal liability associated with those who are sole traders
  • have to pay corporation tax
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14
Q

What do you know about limited liability partnerships?

A
  • avoids personal liability associated with those who are sole traders
  • partners are taxed individually on their share of the profits
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15
Q

What are debtors?

A

Those who owe money to a business

For example, a customer who owes the payment of an invoice

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16
Q

What are creditors?

A

Those who the business owes money to

For example, the lender of a loan

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17
Q

What are the typical elements of a business plan?

A

Executive summary
Marketing strategy
Vision & mission statements
Products & services
Management team & personnel
Financial forecasts
Responsibilities & targets
Training, resource strategy & hierarchy plans
SWOT analysis
Summary

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18
Q

What is a business vision statement?

A

Vision statements focus on tomorrow & what an organisation wants to ultimately become

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19
Q

What is a business mission statement?

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A

Mission statements focuses on today & what an organisation does to achieve it

20
Q

What is business forecasting?

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A
  • considering what may happen in the future
  • often difficult to predict
  • up-to-date data will assist in making forecasting as useful as possible
  • e.g. using work-in-progress schedules or forecast planned billing for instructions currently working on
21
Q

What are business goals?

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A

What a business wants to achieve in the short, medium & long-term

22
Q

What is a SMART goal?

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A

Objectives which are:
- Specific
- Measurable
- Achievable
- Realistic
- Time related

23
Q

What is an investment?

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A
  • At some stage, a business will need investment to grow
  • Can be financial in the form of a loan or equity finance from a creditor
  • can be in training, service development or resourcing such as hiring more staff or buying better equipment
24
Q

What is an investment appraisal?

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A

IA is used to assess whether a business or project would be a worthwhile investment in terms of return (both financially and/or added value)

Considerations are typically:
- Rate of return
- Pay back period
- Net present value (NPV)

25
What are KPIs?
- Key performance indicators - quantifiable measures of performance over time for a specific objective - helps businesses to consistently track progress, identify trends and put plans into place where indicators are not met - can also help businesses focus on the right goals -
26
What is liquidity?
- Measures how quickly a business can convert assets into cash, thus able to meet short-term financial obligations - lacking liquidity can become a problem when payments such as VAT and tax are due - on the other hand, holding too much money in liquid sources such as cash can limit capital growth
27
What are financial ratios?
- a relative magnitude of 2 selective numerical values taken from a businesses financial statements - aim to evaluate overall financial condition of a business - help understand how efficient a business is and inform planning - should be included within the financial analysis section of the business plan
28
What are examples of financial ratios?
working capital, debt & equity, profit margin and current ratio
29
What is an X-Ray approach?
- means exploring all data about a business - speaking with relevant personnel and leaving no stone unturned - helps to ensure business plans are relevant & offer the best chance of success
30
What is working capital?
- represents funds available for a business to meet its current, short-term obligations - its calculated by dividing current assets by current liabilities, with the ideal ratio being between 1.5 and 2 - suggesting a business is healthy & can meet its obligations in the short term
31
What are the issues relating to staff turnover?
- it can be expensive & time consuming to hire staff, having to pay agency fees to help find the right people - training new people is time consuming & expensive - turnover can also affect team dynamics, productivity & continuity
32
What things do you need to consider when setting up a business?
- advise RICS that you are starting a new business & comply with the RICS ROC for member & firms - create a business plan - create a H&S policy - register the business with Companies House & inform HRMC - set-up company & client bank accounts - set-up a complaints handling procedure - get the relevant insurances in place?
33
When setting up a business, what are the relevant insurance tat need to be in place?
- professional indemnity & run off cover - directors' liability - buildings insurance - public liability insurance
34
What is an investment appraisal?
Investment appraisals are used to assess whether a business or project would be a worthwhile investment in terms of return (both financially and / or added value).
35
What is considered as part of an investment appraisal?
- rate of return - payback period - net present value
36
Give some examples of fee earning staff?
- Quantity Surveyors - Project Managers - Architects
37
Give some examples of non-fee earning staff?
- Administration staff - IT technicians
38
What is the purpose of an organisation chart?
- a graphical representation of the roles, responsibilities & relationships between individuals within the organisation - it can be used to depict the structure of an organisation as a whole or broken down by smaller business units
39
What are the levels or types of business plans?
- Corporate Level - Management Level - Operational Level
40
What is a corporate level business plan?
For an entire company, is long term & in fairly broad terms
41
What is a management level business plan?
For an area of an organisation, is in monthly or quarterly periods & quite detailed
42
What is an operational level business plan?
For individuals in an organisation, is in days or even hours & will be very detailed
43
What are the main types of organisational or management structure?
- functional - multi-divisional - flat - matrix
44
What do you know about functional organisational structures?
- the most common structure - breaks up a company based on specialisation of its workforce - most small to medium sized businesses implement this structure
45
What do you know about multi-divisional structures?
- the second most common structure amongst latge companies with many business units - a company using this structures its leadership team based on the products, projects or subsidiaries they operate - each business unit operates its own company with its own president
46
What do you know about flat organisational structures?
- a relatively newer structure - used among start-up companies - it flattens the hierarchy & chain of command, giving its employees a lot of autonomy - companies using this structure have a high speed of implementation
47
What do you know about matrix organisational structures?
- most confusing & least used stuctures - matrixes employees across different superiors, divisions or departments - For example, an employee working for a matrixed company may have duties in 2 departments

RICS APC (34 decks)

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