3.1.6 Business planning

Which of the following is an advantage to a new business start-up of producing a business plan?

• It will guarantee survival

• It will help test financial viability

• It will ensure sales targets are met

• It will not need to be referred to again by the business owner

In which section of the business plan would you expect to find details about market size and market research?

• Objectives and key targets

• Cash flow forecast

• Market overview

• Forecast revenue, costs and profit

Which of the following best describes a business plan? A written document that describes:

• The business, its objectives, strategies, financial forecasts and market

• The marketing plan of the business

• The objectives and key targets of the business

• How the business will produce its products

Which of the following is the formula for total costs?

• Total costs minus total variable costs

• Total fixed costs plus total variable costs

• Total costs plus total variable costs

• Total fixed costs minus total variable costs

Which of the following is a drawback of business planning?

• Reduces risk by providing a guide for the business

• The plan will need to be constantly updated

• It will help to secure any finance required

• Allows the business to review its progress

Which of the following best defines the term variable cost? A cost which:

• Stays the same regardless of output

• Changes according to output

• Changes with time

• Changes according to revenue

An existing business may use a business plan to:

• Focus on the business idea before start-up

• Present to shareholders at the AGM

• Secure external finance for business expansion

• To share with employees in the business

A business makes a profit when:

• Total revenue is greater than total costs

• Total revenue is less than total fixed costs

• Total revenue is greater than total variable costs

• Total revenue is less than total costs

Which of the following is a functional area of a business?

• Outsourcing

• Operations

• Enterprise

• Capital

Selling price x quantity is the formula for which of the following?

• Profit

• Total costs

• Revenue

• Variable costs