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Description
Flashcards by Samraj Virdi, updated more than 1 year ago
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Created by Samraj Virdi
almost 7 years ago
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| Question | Answer |
| Business plan | A plan about your business to help you achieve your targets. |
| Business planning | The process of producing a business plan |
| Total costs | Fixed costs + variable costs = Total Costs |
| Uncertainty | Occurs where there is a lack of information about a situation. |
| The purpose of business planning | A business plan is a document setting out what a business does and what it hopes to achieve in the future. It is used to help anticipate problems. |
| Revenue | The income that a firm receives from selling its goods or services; it is also referred to as ‘turnover’. Measured by the amount of units sold. |
| Fixed Costs | Costs that do not change when a business changes its output |
| Risk | The possibility of something going wrong |
| Variable Costs | Costs that vary directly with the business’s level of output |
| Why a business plan may be created? | Gather and analyse data to assess risk and make better decisions. Also to raise finance- investors, such as bankers. To set objectives and provide clear targets for the business. |
| Problems of business planning | You might have a lack of experience. Uncertainty (lack of information about a situation). Change - Business environments changes over time. |
| Reducing the risk of business planning | - Research the market in detail. - Get guidance from experts. - Plan for possible different situations. - Regularly review and update the business plan. |
| The main sections of a business plan | Background information on the founders. An analysis on the market. The firms objectives Details of the price An explanation on how the business will complete against its rivals An analysis of the finical position of the business. |
| What is in the financial section? | Prediction of profits Revenue is the value of the business's sale Profit = revenue – total costs Revenue = number of units/products sold × selling price Revenue = 500 × £3 Revenue = £1,500 |
| What is in the financial section? | If revenue is greater than total costs a profit is made. If revenue is less than total costs a loss is made. |
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