1.1 Business Planning 0.0 / 5 ? Business1.1 Business Planning flashcardsBTEC NationalAQA Created by: cscott20Created on: 11-09-18 12:44 What is a business plan? A document which states what a business is trying to achieve in the next few years and how it will do so. 1 of 15 What are start up costs? The costs invloved in setting up the bsuiness - market research, legal advice, premises, fixtures and fittings, opening stock. 2 of 15 What are running costs? The costs of operating the business on a day to day basis - utilities, replenishing stock, wages. 3 of 15 What is profit? Profit is the surplis of revenue. If a business is to survive it must plan how it will achieve a profit in the medium to long term. 4 of 15 Return on an investment can be calculated as: (Operating profit/Return) x 100 5 of 15 Making a return for the owners of the enterprise The owners will have invested capital in the business and will want to be rewarded for this. The reward will come from a share of the profits. 6 of 15 Setting profit targets A minimum amount of profit to be achieved in a given time period. 7 of 15 Ensuring sufficient cash resources Without sufficient cash to meet day to day expenses a business will not survive. 8 of 15 Long term financing Planning how to finance capital expenditure. 9 of 15 The proportion of long term funding that is debt This relationship is reffered to as GEARING. 10 of 15 What is gearing? A business can be described as highly geared if the % is thought to be higher as this increases the element of risk. 11 of 15 How is gearing calculated? (Debt/Total long term funding) x 100 12 of 15 What is a stakeholder? A person or group who has an interest in the business. 13 of 15 Who are the internal stakeholders of the business? Partners etc., Employees, Owners, Shareholders, Managers. 14 of 15 Who are the external stakeholders of the business? Lenders/Creditors, Government, Suppliers, Customers, Competitors, Community, Pressure Groups. 15 of 15
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