Business Planning

Business Planning

Defined as:

“A plan presented to a bank or other provider of finance, describing what the business intends to do, explaining what the costs will be, what it expects to earn, how it will repay the money it has borrowed, & how soon it will make a profit”

The Purpose of a Business Plan

For the providers of finance.

For the managers of the business.

For monitoring of the business.

Business Sectors

Public.

Private.

Voluntary.

Business Classification

Sole Trader.

Partnership.

Limited Company. (PLC & LTD)

Business Classification (cont)

Franchise.

Co-operatives

Business Objectives

A business may be defined as:

“An organisation which provides goods or services which satisfy customer needs & wants”

Business Objectives (cont)

To cover costs & make a profit. To grow – increase sales & market share. To provide quality. To develop a skilled workforce. To serve the community.

Market ResearchQuestions that need to be answered:

Is there a demand for the product / service? Who are the customers? What is the competition doing? What should I charge?

Market Research (cont)

Secondary (desk) research.

Primary (field) research.

Broken down, this can be either;

Market Research (cont)

Quantitative research

Or

Qualitative research.

Market Research (cont)

Secondary Research An examination of the organisations own

internal records.

A study of external publications, complied by experts in various fields.

Market Research (cont)Primary Research

Consists of several stages: Clarify the objectives of the research. Choose a suitable data collection method. Construct a questionnaire. Decide on sampling techniques.

Market Research (cont)

Collect data in the field.

Collate, analyse & interpret the data

Present your findings, with forecasts if required.

Market Research (cont)

Whichever method(s) of market research

are used the answers should answer the

question ‘Is there a demand for the

product / service?’

Market Segmentation

‘Is the process whereby the overall

market is divided up into separate sets of

customers (segments) who have

identifiable product needs’

Market Segmentation (cont)There are a number of ways of identifying

consumer market segments:

Social stratification.

Age groups.

Regional groups.

Market Segmentation (cont)

Sex.

Income groups.

Ethnic groups

Marketing Planning

A marketing plan is a result of careful research, consultation & discussion. It will analyse past performance & present trends & attempt to predict the future.

There are a number of planning tools and techniques used to aid decisions…

Marketing Planning (cont)

SWOT

Marketing Mix.

Ansoff strategy.

PEST analysis.

Marketing Planning (cont)

Strengths

Weaknesses

Opportunities

Threats

Marketing Planning (cont)

Product.

Price.

Place.

Promotion

The

Marketing

Mix

Marketing Planning (cont)

A: Target Marketing / HNC /MH 10

Diversification

Market Penetration Market Development

Product Development

Existing Markets New Markets

New

Pro

du

cts

Ansoff’s Matrix (Product/Market Matrix)

Marketing Planning (cont)

A: Target Marketing / HNC /MH 7

P.E.S.T. Analysis

P oliticalE conomic

S ocialT echnological

Marketing Planning (cont)

A: Target Marketing / HNC /MH 11

The Product Life Cycle

Planning for Resources

2 areas:

Human Resource planning.

Physical & Production Recourse planning.

Human Resource Planning

Objectives: The productivity & output of the business is

efficient. The profit is maximised. People working in the business are motivated

& satisfied.

Human Resource Planning (cont)

The skills that are needed:

Administration & management. Finance / book-keeping / payroll. Production & operations. Research & development

Physical & Production Recourse Planning.

Premises – Work from home, rent or buy?

Things to consider; Planning permission. Licences. Leasehold or freehold. Environmental restrictions.

Physical & Production Recourse Planning. (cont)

Machinery – buy or lease?

Purchasing stock & materials – getting the right quality, in the right quantity, at the right time at the right price.

Financial Techniques & Tools

Cash Flow Forecast. Break even analysis. Ratio analysis. Balance sheet. Profit & Loss account.