Business Planning
Overview
A bank manager is handed two loan applications on the same morning. The first says: I have been a chef for twelve years and I want to open a restaurant, so I need 60,000. The second says: I will seat 48 people, open six evenings a week, expect an average of 31 covers an evening at 22 each, pay 9,400 a month in rent, wages and utilities, and reach a profit in month seven. Both applicants may be equally good cooks. Only one of them has shown that the numbers work.
A business plan is not paperwork for the sake of it. It is the document in which an idea is forced to become arithmetic. In this lesson you will learn why businesses write plans and what goes in them, and then you will meet the financial vocabulary the whole rest of this course depends on: revenue, fixed costs, variable costs, total costs, profit and loss. You will practise the calculations that come out of those terms, because they appear on both papers and they are among the most reliable marks available to a candidate who has done the work.
Objectives
- The purpose of business planning.
- The main sections within a business plan.
- Basic financial terms.
- Basic financial calculations.
Mind map
This topic is mapped out so you can see how the ideas connect.
Open the mind map in the app
Lesson Note
Complete Note Available on the Green Bridge App
Get the Green Bridge CBT app on your phone or computer for the complete IGCSE library: past papers, mark schemes, mind maps, flashcards and audio lessons.
Lesson Evaluation
Congratulations on completing the lesson on Business Planning. Now that youve explored the key concepts and ideas, its time to put your knowledge to the test. This section offers a variety of practice questions designed to reinforce your understanding and help you gauge your grasp of the material.
You will encounter a mix of question types, including multiple-choice questions, short answer questions, and essay questions. Each question is thoughtfully crafted to assess different aspects of your knowledge and critical thinking skills.
Use this evaluation section as an opportunity to reinforce your understanding of the topic and to identify any areas where you may need additional study. Don't be discouraged by any challenges you encounter; instead, view them as opportunities for growth and improvement.
- A business has fixed costs of 800 and variable costs of 4.50 per unit. What is the total cost of producing 600 units? A. 804.50 B. 2,700 C. 3,500 D. 3,780 Answer: C
- Which one of the following is a fixed cost for a bakery? A. Flour used in the bread B. Insurance on the shop C. Packaging for each loaf D. Wages paid per loaf produced Answer: B
- A business sells 900 units at 12 each. Its total costs are 7,400. What is its profit? A. 3,400 B. 4,600 C. 10,800 D. 18,200 Answer: A
- Which one of the following is NOT normally a section of a business plan? A. Financial forecasts B. Market research and the target market C. The audited accounts of competitors D. The marketing plan Answer: C
- Which one of the following is the main reason a bank asks to see a business plan before lending? A. It guarantees that the business will succeed B. It allows the bank to assess whether the forecast figures support repayment C. It is required by law in every country D. It removes the need for the owner to provide security Answer: B
Work through these questions in the app
Work through these questions in the app
Recommended Books
Practice Mock Questions
Want to practice mock questions on Business Planning? Download the Green Bridge CBT app to access mock questions and full practice assessments for this topic.
Download The App On Google Playstore
Everything you need to excel in your exams
