Business Planning

• Business plan


  A document created by a business or entrepreneur that provides details about each element of the business
• Business plan


  • Considers all of the different elements of the business
  • Usually made up of several sections: business idea, aims and objectives, target market, revenue forecast, projected costs and profit, cash flow forecast, sources of finance, location, marketing mix
• Aims and objectives

  Business aims are the overall targets or goals, whereas business objectives are the steps a business needs to take to meet its overall aims
• SMART


  An acronym for specific, measurable, agreed, realistic and timed, referred to when setting objectives
• Target market


  A group of people or area of a market that a business aims to sell its products to
• Market research


  Gathering data about customers, competitors and market trends
• Revenue forecast


  A prediction a business makes about the amount of revenue it will have in the future
• Profit


  The amount of money made after all expenses have been paid
• Cash flow forecast


  A prediction of the money flowing in and out of a business
• Finance

  Any form of money used by a business
• Marketing mix

  A description of marketing - product, price, promotion, place
• Risk

  An estimate of the probability of an unwanted outcome
• Business plan


  A document created by a business or entrepreneur that provides details about each element of the business
• Entrepreneur

  A calculated risk-taker who sets up a business in return for financial gain
• Risk

  An estimate of the probability of an unwanted outcome. It depends upon the chance of it happening and the consequences if it did happen
• There is a high risk of business failure within the first year
• Creating a business plan

  1. Consider all key elements of a business

  2. Address any issues

  3. Conduct market research

  4. Gain understanding of market, potential customers, business location

  5. Create aims and objectives
• Market research


  Gathering data about customers, competitors and market trends
• Aims and objectives


  Business aims are the overall targets or goals, business objectives are the steps to meet the aims
• Primary and secondary research

  Two types of market research a business might undertake
• Cash flow forecast


  A prediction of the money flowing in and out of a business
• Budget


  A plan for expected income and spending over a specified time period
• Receipts

  The money flowing into a business, otherwise known as inflows
• Finance

  Any form of money used by a business
• Investor


  A person or group that buys part of a business with the aim of making money
• Mortgage


  A special loan taken out by some property buyers, where the more money you borrow, the more you will pay back in interest payments. Also the longer you take to repay your mortgage, the more interest you will pay
• The primary purpose of an investor is to make more money, so they want to ensure the business has the potential to be a success