Business

• the purpose of a business plan is to outline how a new or existing business will operate, what it hopes to achieve, and how it plans to do so.
• a marketing strategy outlines the methods that businesses use to promote their products/services
• marketing mix refers to the combination of elements used by businesses to market their product/service
• Business


  An organisation that produces and sells goods or services to make a profit
• Key business objectives


  • To make money
  • To provide a service
  • Provide employment opportunities
  • Fill a gap in the market
  • Help the community (social enterprise)
  • Be environmentally friendly
  • Improve existing products
  • Survive
• Mission statement


  Provides the overriding goal of a business and the reason for its existence; and a strategic perspective for the business and a vision for the future
• Benefits of a good mission statement


  • Clarifies purpose and focus
  • Motivates staff and those interested in the business
  • Attracts people (such as investors) and resources
  • A good public relations tool
• Characteristics of a good mission statement

  • Contains a formulation of objectives that enables progress towards them to be measured
  • Differentiates the business from its competitors
  • Defines the markets or business in which the firm wants to operate
  • Is relevant to all major stakeholders – not just shareholders and managers
  • Excites, inspires, motivates, and guides – particularly important for employees
• Criticisms of mission statements

  • Not always supported by actions of the business
  • Often too vague and general
  • Views as a public relations exercise
  • Sometimes regarded cynically by employees
  • Not supported wholeheartedly by senior management
• Corporate aims and objectives

  • Mission statement – the overall reason for the business' existence
  • Corporate aims – the long term targets and plans to fulfil the mission statement
  • Corporate objectives – the medium to long term quantifiable targets to fulfil the mission statement
  • Corporate strategy – the actions to be taken by the business to achieve its objectives
• Types of business objectives

  • Ethical
  • Profit
  • Growth
  • Survival
  • Cash flow
  • Social
• Main functions of objectives

  • A clear statement of what needs to be achieved
  • Focus' on all activities of the business (marketing, operations, finance, human resources)
  • Provides targets for individual and group achievements
  • A means of measuring performance (business, departments, individual employees)
  • Provides a clear focus for decision making and a target to aim for
  • Provides criteria for evaluating performance
• Profit


  Revenue - Total Costs
• Fixed costs


  Costs that stay the same regardless of output
• Variable costs


  Costs that change in relation to the number of items produced
• Importance of profit


  • Motivator
  • Further investment
  • Stakeholders
  • Finance
  • Success
• Profit is a guide to see where it is easier to make profits, where profits are high and low
• Before looking at profit, have to look at competitor business objectives
• Business objectives


  A clear statement of what needs to be achieved
• Main functions of objectives

  • Focus on all activities of the business (marketing, operations, finance, human resources)
  • Provide targets for individual and group achievements
  • A means of measuring performance (business, departments, individual employees)
  • Provide a clear focus for decision making and a target to aim for
  • Provide criteria for evaluating performance
• Profit


  Revenue - total costs
• Total costs


  Fixed costs (stay the same regardless of output eg rent) + variable costs (change in relation to the number of items produced)
• Importance of profit


  • Motivator
  • Guide to see where it is easier to make profits
  • Stakeholders - Reliable customers purchase goods, easier to establish links and work with other businesses
  • Finance - Avoiding paying interest, fund expansion plans and capital investment
  • Success - Compare profits to competitors
• Before looking at profit, have to look at competitor business objectives
• Reward


  Many business owners take risks with money, every 6 months plcs pay dividends to shareholders, retain profit to buy more resources to make more profit in the future