Theme 1 Flashcards
What is a business plan?
the outline of what a business will do and how it plans to do it
When are business plans useful to existing firms?
when they want to make changes
What are the benefits of a business plan?
- forces the owner to think about what the business will do, how it will be organised + resources (how much money is needed)
- convince financial backers that it is a good investment (shows information, helps backer decide if they can get their money back)
- reduces risk of new business idea
- helps realise if it is a bad business idea before wasting time + money (ie start up costs)
- helps set aims and objectives, then achieve them
- help make business decisions
What does a business plan contain?
- business idea
- business aims and objectives
- target market
- marketing mix
- location
- finance
What factors affect different business aims and objectives?
- size + age of the business
- owner of the business
- level of competition
What are non-financial aims for a business?
- accomplishing a personal challenge
- achieve personal satisfaction
- gaining independence + control
- doing what is right for society
What are financial aims of a business?
- survival
- maximise profit
- increase market share
- maximise sales
- achieve financial security
What is a business objective?
more specific than aims, measurable steps on the way to aims
act as clear targets for firms to work towards
can be used to measure if the business has succeeded or not.
What are types of primary reasearch?
- questionnaires, surveys, focus groups
- observation
- large samples (telephone, internet)
Benefits of primary research
- up to date
- relevant to the business
- specific to needs of business
- specific to target market
- observations= cheap
Negatives to primary research
- expensive
- time consuming
- large samples: people won’t pick up the phone, do the surveys etc
Examples of secondary research
-market research reports
-government reports
-newspapers, magazines, internet
