Chapter 5 - Business planning

Question 1

What is the main difference between an aim and an objective?

Answer 1

time

Question 2

Aim

Answer 2

an overall goal that an enterprise wants to achieve.

Question 3

Objective

Answer 3

a specific target that an enterprise wants to reach so it can achieve its aims

Question 4

Which is long-term and which is short-term between an aim and an objective?

Answer 4

aim is long-term and objective is short-term

Question 5

What characteristics should an objective have?

Answer 5

SMART
specific
measurable
achievable
realistic
time-based

Question 6

Name 5 objectives an enterprise may have

Answer 6

• survival
• maximising profit
• satisfying profit
• growth
• sales growth
• sales revenue
• cash flow
• provide a good service
• environmental
• ethical
• social
• not-for-profit
• legal compliance

Question 7

Survival (objective)

Answer 7

try to keep the enterprise running

Question 8

Maximising profit (objective)

Answer 8

try to make as much profit as possible

Question 9

Satisfying profit (objective)

Answer 9

try to make enough profit to keep the owners comfortable

Question 10

Growth (objective)

Answer 10

try to increase its size including market share

Question 11

Sales growth (objective)

Answer 11

try to make as many sales as possible

Question 12

Sales revenue (objective)

Answer 12

try to make as much revenue as possible

Question 13

Cash flow (objective)

Answer 13

try to ensure they have enough cash to pay its day-to-day costs

Question 14

Provide a good service (objective)

Answer 14

try to provide a positive experience to its customers

Question 15

Environmental (objective)

Answer 15

try to protect the environment

Question 16

Ethical (objective)

Answer 16

try to treat all its stakeholders fairly

Question 17

Social (objective)

Answer 17

try to meet the needs of less fortunate members of society

Question 18

Not-for-profit (objective)

Answer 18

try to use any extra revenue to help it achieve its purpose or mission

Question 19

Legal compliance (objective)

Answer 19

meet all laws and regulations to avoid legal action or damage to reputation

Question 20

What are some different planing tools an enterprise can use?

Answer 20

• action plans
• business plans
• marketing plans
• plans for negotiations and meetings

Question 21

Action plan

Answer 21

a list of tasks that need to be completed in order for a set goal to be achieved

Question 22

Purpose and importance of action plans

Answer 22

• better understand what needs to be done so the right things are done at the right times
• carefully identify the key stages of a project to avoid mistakes that might waste time and effort
• identify potential obstacles and issues and think of how to avoid them
• keep track of responsibilities
• acting as a checklist to monitor progress and so that any problems and delays are spotted quickly

Question 23

Define prepare

Answer 23

present information in a suitable format

Question 24

What is the general format of an action plan?

Answer 24

take picture at home from textbook

Question 25

Stages in constructing an action plan

Answer 25

1. set the goal you want to achieve 2. identify key actions - what do you need to do to achieve the goal? 3. break actions into small, simple activities 4. put activities into a logical order 5. decide how much time will be spent on and who will do each activity 6. monitor - how will you check is a stage is completed 7. start implementation 8. review and update plan as you carry out each activity 9. achieve goal

Question 26

Define monitor

Answer 26

to check or review the progress of something over a period of time

Question 27

Why is monitoring important for an enterprise?

Answer 27

- check progress of project - identify actions to be taken - allow for alternative steps if necessary - know stages are completed in the right order and on time

Question 28

What 5 methods can be used for monitoring?

Answer 28

- checklists - data - surveys and interviews to costumers - testing to check if equipment or products work - reporting

Question 29

What should you keep in mind when choosing a monitoring method?

Answer 29

- What is its purpose - what do you need to check? - Is it simple to use? - Does it provide the information you require?

Question 30

Define business plan

Answer 30

a formal document that gives the aims of the enterprise and outlines ways those aims will be achieved

Question 31

Purpose and importance of a business plan

Answer 31

- acts as a focus - provides information about market, competitors, and the potential demand - identifies costs and financial needs - provides evidence to show an idea is possible - makes entrepreneur think ahead - used to produce targets - helps with organisation

Question 32

What are the contents of a business plan? What do they mean?

Answer 32

- **preliminary information** (details about the business) - **marketing** (size of market, competition, pricing, etc.) - **operation** (how the enterprise will work, e. g. production details, resources) - **human resources** (number of employees, who will have each role) - **financial** (targets, budgets, cash flow forecast, etc.)

Question 33

Comparing actual numbers against those identified in marketing plans and budgets is an important way to check progress. What should an enterprise consider depending on the objectives set?

Answer 33

- financial data - operations data (total level of output) - marketing data (feedback from customers) - human resource data (number of employees, attendance, hours worked)

Question 34

Why should a business plan be updated?

Answer 34

to monitor progress