Business Planning
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Transcript of Business Planning
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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”
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The Purpose of a Business Plan
For the providers of finance.
For the managers of the business.
For monitoring of the business.
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Business Sectors
Public.
Private.
Voluntary.
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Business Classification
Sole Trader.
Partnership.
Limited Company. (PLC & LTD)
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Business Classification (cont)
Franchise.
Co-operatives
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Business Objectives
A business may be defined as:
“An organisation which provides goods or services which satisfy customer needs & wants”
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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.
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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?
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Market Research (cont)
Secondary (desk) research.
Primary (field) research.
Broken down, this can be either;
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Market Research (cont)
Quantitative research
Or
Qualitative research.
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Market Research (cont)
Secondary Research An examination of the organisations own
internal records.
A study of external publications, complied by experts in various fields.
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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.
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Market Research (cont)
Collect data in the field.
Collate, analyse & interpret the data
Present your findings, with forecasts if required.
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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?’
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Market Segmentation
‘Is the process whereby the overall
market is divided up into separate sets of
customers (segments) who have
identifiable product needs’
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Market Segmentation (cont)There are a number of ways of identifying
consumer market segments:
Social stratification.
Age groups.
Regional groups.
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Market Segmentation (cont)
Sex.
Income groups.
Ethnic groups
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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…
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Marketing Planning (cont)
SWOT
Marketing Mix.
Ansoff strategy.
PEST analysis.
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Marketing Planning (cont)
Strengths
Weaknesses
Opportunities
Threats
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Marketing Planning (cont)
Product.
Price.
Place.
Promotion
The
Marketing
Mix
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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)
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Marketing Planning (cont)
A: Target Marketing / HNC /MH 7
P.E.S.T. Analysis
P oliticalE conomic
S ocialT echnological
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Marketing Planning (cont)
A: Target Marketing / HNC /MH 11
The Product Life Cycle
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Planning for Resources
2 areas:
Human Resource planning.
Physical & Production Recourse planning.
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Human Resource Planning
Objectives: The productivity & output of the business is
efficient. The profit is maximised. People working in the business are motivated
& satisfied.
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Human Resource Planning (cont)
The skills that are needed:
Administration & management. Finance / book-keeping / payroll. Production & operations. Research & development
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Physical & Production Recourse Planning.
Premises – Work from home, rent or buy?
Things to consider; Planning permission. Licences. Leasehold or freehold. Environmental restrictions.
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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.
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Financial Techniques & Tools
Cash Flow Forecast. Break even analysis. Ratio analysis. Balance sheet. Profit & Loss account.