essential elements of a business plan rics

APC Support and mentoring

Rics apc – business planning.

Posted on June 23, 2018 Updated on June 23, 2018

Introduction.

Business Planning is a mandatory competency that APC candidates from all pathways need to achieve at Level 1.

Candidates from the Art & Antiques pathway may elect to take this competency to Level 2 or 3 as part of their optional selection.

Business Planning is a Core Competency at Level 3 for the Management Consultancy pathway.

Please note that the requirements at Level 1 when taken as a Technical Competency within the aforementioned pathways are slightly different from the requirements as a Mandatory Competency. You should refer to your specific Pathway Guide for more details.

What is it about?

The official RICS definition is:

Level 1 = ‘ Demonstrate knowledge and understanding of how business planning activities contribute to the achievement of corporate objectives’.

It includes several topics:

• Legislation and principles of law – See Pg. 33 of the RICS Practice Management Guidelines
• Types and essential elements of Business Plans
• Short term / long term strategies
• Market analysis (SWOT / PEST)
• Organisational structures / Staffing levels – recruitment / turnover
• Business support services – administration, secretarial, HR, IT etc.

Most APC candidates will have come across the key concepts of Business Planning – knowingly or not – at some point during their graduate studies. Some of the largest employers may also offer on-line management training modules. Alternatively nothing stops you from picking up a basic book on business management to brush on your knowledge in strategy, organisational structures, market analysis, etc

I also strongly recommend you to read the  RICS Practice Management Guidelines   to understand how business planning is relevant to surveyors. It has now been withdrawn but we have saved a copy for you!

Those working in the largest companies may recognise some of the tools used by their employers and gain an understanding of why those are in place. Those working in small practices or as self-employed may find very useful advice to grow their business acumen.

Potential APC Questions

Due to time constraints, assessors will only have time to ask you a few questions on Business Planning. As a minimum they will expect you to know what a business plan is, be familiar with your company’s business plan and business model, and understand how you can contribute to the achievement of your company’s corporate objectives.

If you are applying under the Senior Professional Route (SPA), assessors will expect you to have a detailed understanding of the development and implementation of your company’ s business plan.

Some very classic questions would be;

• What is a business plan? What do you find in a business plan?
• Can you tell us about your company’s current business plan?
• What is your company’s management structure / business model?
• What are your company’s values?
• What tools does your company use to manage its business?
• How do you ensure that you contribute to the achievement of your company’s objectives / business plan?
• What is contained within an appointment document? What are your company’s terms of business?
• What is the relevance of a SWOT or PEST analysis to business planning?

Some points that you will have stated in your Summary of Experience may trigger some questions more specific to your experience and personal knowledge .

For example you may state in your Summary of Experience that you have studied Porter’s Five Forces Model, SWOT analysis and PEST analysis as part of a business module at University. This may lead the APC assessors to ask you to explain what they are and to give an example specific to your company.

Business Planning is a crucial competency for those considering setting up their own practice or progressing to a management role after attainment of the MRICS status. I therefore recommend that you do not neglect it, both for your APC and future career development.

Familiarise yourself with your company’s business plan and its management structure and tools. Consider how you personally contribute to achieving its objectives (‘achievement of corporate objectives’ is contained within the definition of this competency). This may be by completing your timesheets and expenses in a timely manner or assessing your own competences and planning your CPD’s to acquire the relevant skills.

Make sure that you understand how to prepare a business plan and what it should look like.

All our past APC candidates will give you the same advice: do not underestimate the time required to revise (learn?) for your APC! It will easily take you 3 months of solid studying every evening.

To make this task a little easier, APC Support Ltd offer on-demand revision webinars covering all the technical and mandatory competencies in Quantity Surveying, Built Infrastructure, Building Surveying, Building Control, Project Management and Facilities Management.

Alternatively, we offer face-to-face training for corporate clients across the UK. Please e-mail us at [email protected] to discuss your requirements.

All the modules are recorded and will provide you with over 30 hours of formal CPD. You can attend them on a pay-as-you-go basis or subscribe to our unlimited revision package .

Best of luck!

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This entry was posted in Mandatory Competencies , Uncategorized and tagged APC , business planning , coaching , Experience , Mandatory competencies , mentoring , Record of Experience , RICS , Summary of Experience , support , tips .

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12 Key Elements of a Business Plan (Top Components Explained)

Starting and running a successful business requires proper planning and execution of effective business tactics and strategies .

You need to prepare many essential business documents when starting a business for maximum success; the business plan is one such document.

When creating a business, you want to achieve business objectives and financial goals like productivity, profitability, and business growth. You need an effective business plan to help you get to your desired business destination.

Even if you are already running a business, the proper understanding and review of the key elements of a business plan help you navigate potential crises and obstacles.

This article will teach you why the business document is at the core of any successful business and its key elements you can not avoid.

Let’s get started.

Why Are Business Plans Important?

Business plans are practical steps or guidelines that usually outline what companies need to do to reach their goals. They are essential documents for any business wanting to grow and thrive in a highly-competitive business environment .

1. Proves Your Business Viability

A business plan gives companies an idea of how viable they are and what actions they need to take to grow and reach their financial targets. With a well-written and clearly defined business plan, your business is better positioned to meet its goals.

2. Guides You Throughout the Business Cycle

A business plan is not just important at the start of a business. As a business owner, you must draw up a business plan to remain relevant throughout the business cycle .

During the starting phase of your business, a business plan helps bring your ideas into reality. A solid business plan can secure funding from lenders and investors.

After successfully setting up your business, the next phase is management. Your business plan still has a role to play in this phase, as it assists in communicating your business vision to employees and external partners.

Essentially, your business plan needs to be flexible enough to adapt to changes in the needs of your business.

3. Helps You Make Better Business Decisions

As a business owner, you are involved in an endless decision-making cycle. Your business plan helps you find answers to your most crucial business decisions.

A robust business plan helps you settle your major business components before you launch your product, such as your marketing and sales strategy and competitive advantage.

4. Eliminates Big Mistakes

Many small businesses fail within their first five years for several reasons: lack of financing, stiff competition, low market need, inadequate teams, and inefficient pricing strategy.

Creating an effective plan helps you eliminate these big mistakes that lead to businesses' decline. Every business plan element is crucial for helping you avoid potential mistakes before they happen.

5. Secures Financing and Attracts Top Talents

Having an effective plan increases your chances of securing business loans. One of the essential requirements many lenders ask for to grant your loan request is your business plan.

A business plan helps investors feel confident that your business can attract a significant return on investments ( ROI ).

You can attract and retain top-quality talents with a clear business plan. It inspires your employees and keeps them aligned to achieve your strategic business goals.

Key Elements of Business Plan

Starting and running a successful business requires well-laid actions and supporting documents that better position a company to achieve its business goals and maximize success.

A business plan is a written document with relevant information detailing business objectives and how it intends to achieve its goals.

With an effective business plan, investors, lenders, and potential partners understand your organizational structure and goals, usually around profitability, productivity, and growth.

Every successful business plan is made up of key components that help solidify the efficacy of the business plan in delivering on what it was created to do.

Here are some of the components of an effective business plan.

1. Executive Summary

One of the key elements of a business plan is the executive summary. Write the executive summary as part of the concluding topics in the business plan. Creating an executive summary with all the facts and information available is easier.

In the overall business plan document, the executive summary should be at the forefront of the business plan. It helps set the tone for readers on what to expect from the business plan.

A well-written executive summary includes all vital information about the organization's operations, making it easy for a reader to understand.

The key points that need to be acted upon are highlighted in the executive summary. They should be well spelled out to make decisions easy for the management team.

A good and compelling executive summary points out a company's mission statement and a brief description of its products and services.

An executive summary summarizes a business's expected value proposition to distinct customer segments. It highlights the other key elements to be discussed during the rest of the business plan.

Including your prior experiences as an entrepreneur is a good idea in drawing up an executive summary for your business. A brief but detailed explanation of why you decided to start the business in the first place is essential.

Adding your company's mission statement in your executive summary cannot be overemphasized. It creates a culture that defines how employees and all individuals associated with your company abide when carrying out its related processes and operations.

Your executive summary should be brief and detailed to catch readers' attention and encourage them to learn more about your company.

Components of an Executive Summary

Here are some of the information that makes up an executive summary:

• The name and location of your company
• Products and services offered by your company
• Mission and vision statements
• Success factors of your business plan

2. Business Description

Your business description needs to be exciting and captivating as it is the formal introduction a reader gets about your company.

What your company aims to provide, its products and services, goals and objectives, target audience , and potential customers it plans to serve need to be highlighted in your business description.

A company description helps point out notable qualities that make your company stand out from other businesses in the industry. It details its unique strengths and the competitive advantages that give it an edge to succeed over its direct and indirect competitors.

Spell out how your business aims to deliver on the particular needs and wants of identified customers in your company description, as well as the particular industry and target market of the particular focus of the company.

Include trends and significant competitors within your particular industry in your company description. Your business description should contain what sets your company apart from other businesses and provides it with the needed competitive advantage.

In essence, if there is any area in your business plan where you need to brag about your business, your company description provides that unique opportunity as readers look to get a high-level overview.

Components of a Business Description

Your business description needs to contain these categories of information.

• Business location
• The legal structure of your business
• Summary of your business’s short and long-term goals

3. Market Analysis

The market analysis section should be solely based on analytical research as it details trends particular to the market you want to penetrate.

Graphs, spreadsheets, and histograms are handy data and statistical tools you need to utilize in your market analysis. They make it easy to understand the relationship between your current ideas and the future goals you have for the business.

All details about the target customers you plan to sell products or services should be in the market analysis section. It helps readers with a helpful overview of the market.

In your market analysis, you provide the needed data and statistics about industry and market share, the identified strengths in your company description, and compare them against other businesses in the same industry.

The market analysis section aims to define your target audience and estimate how your product or service would fare with these identified audiences.

Market analysis helps visualize a target market by researching and identifying the primary target audience of your company and detailing steps and plans based on your audience location.

Obtaining this information through market research is essential as it helps shape how your business achieves its short-term and long-term goals.

Market Analysis Factors

Here are some of the factors to be included in your market analysis.

• The geographical location of your target market
• Needs of your target market and how your products and services can meet those needs
• Demographics of your target audience

Components of the Market Analysis Section

Here is some of the information to be included in your market analysis.

• Industry description and statistics
• Demographics and profile of target customers
• Marketing data for your products and services
• Detailed evaluation of your competitors

4. Marketing Plan

A marketing plan defines how your business aims to reach its target customers, generate sales leads, and, ultimately, make sales.

Promotion is at the center of any successful marketing plan. It is a series of steps to pitch a product or service to a larger audience to generate engagement. Note that the marketing strategy for a business should not be stagnant and must evolve depending on its outcome.

Include the budgetary requirement for successfully implementing your marketing plan in this section to make it easy for readers to measure your marketing plan's impact in terms of numbers.

The information to include in your marketing plan includes marketing and promotion strategies, pricing plans and strategies , and sales proposals. You need to include how you intend to get customers to return and make repeat purchases in your business plan.

5. Sales Strategy

Sales strategy defines how you intend to get your product or service to your target customers and works hand in hand with your business marketing strategy.

Your sales strategy approach should not be complex. Break it down into simple and understandable steps to promote your product or service to target customers.

Apart from the steps to promote your product or service, define the budget you need to implement your sales strategies and the number of sales reps needed to help the business assist in direct sales.

Your sales strategy should be specific on what you need and how you intend to deliver on your sales targets, where numbers are reflected to make it easier for readers to understand and relate better.

6. Competitive Analysis

Providing transparent and honest information, even with direct and indirect competitors, defines a good business plan. Provide the reader with a clear picture of your rank against major competitors.

Identifying your competitors' weaknesses and strengths is useful in drawing up a market analysis. It is one information investors look out for when assessing business plans.

The competitive analysis section clearly defines the notable differences between your company and your competitors as measured against their strengths and weaknesses.

This section should define the following:

• Your competitors' identified advantages in the market
• How do you plan to set up your company to challenge your competitors’ advantage and gain grounds from them?
• The standout qualities that distinguish you from other companies
• Potential bottlenecks you have identified that have plagued competitors in the same industry and how you intend to overcome these bottlenecks

In your business plan, you need to prove your industry knowledge to anyone who reads your business plan. The competitive analysis section is designed for that purpose.

7. Management and Organization

Management and organization are key components of a business plan. They define its structure and how it is positioned to run.

Whether you intend to run a sole proprietorship, general or limited partnership, or corporation, the legal structure of your business needs to be clearly defined in your business plan.

Use an organizational chart that illustrates the hierarchy of operations of your company and spells out separate departments and their roles and functions in this business plan section.

The management and organization section includes profiles of advisors, board of directors, and executive team members and their roles and responsibilities in guaranteeing the company's success.

Apparent factors that influence your company's corporate culture, such as human resources requirements and legal structure, should be well defined in the management and organization section.

Defining the business's chain of command if you are not a sole proprietor is necessary. It leaves room for little or no confusion about who is in charge or responsible during business operations.

This section provides relevant information on how the management team intends to help employees maximize their strengths and address their identified weaknesses to help all quarters improve for the business's success.

8. Products and Services

This business plan section describes what a company has to offer regarding products and services to the maximum benefit and satisfaction of its target market.

Boldly spell out pending patents or copyright products and intellectual property in this section alongside costs, expected sales revenue, research and development, and competitors' advantage as an overview.

At this stage of your business plan, the reader needs to know what your business plans to produce and sell and the benefits these products offer in meeting customers' needs.

The supply network of your business product, production costs, and how you intend to sell the products are crucial components of the products and services section.

Investors are always keen on this information to help them reach a balanced assessment of if investing in your business is risky or offer benefits to them.

You need to create a link in this section on how your products or services are designed to meet the market's needs and how you intend to keep those customers and carve out a market share for your company.

Repeat purchases are the backing that a successful business relies on and measure how much customers are into what your company is offering.

This section is more like an expansion of the executive summary section. You need to analyze each product or service under the business.

9. Operating Plan

An operations plan describes how you plan to carry out your business operations and processes.

The operating plan for your business should include:

• Information about how your company plans to carry out its operations.
• The base location from which your company intends to operate.
• The number of employees to be utilized and other information about your company's operations.
• Key business processes.

This section should highlight how your organization is set up to run. You can also introduce your company's management team in this section, alongside their skills, roles, and responsibilities in the company.

The best way to introduce the company team is by drawing up an organizational chart that effectively maps out an organization's rank and chain of command.

What should be spelled out to readers when they come across this business plan section is how the business plans to operate day-in and day-out successfully.

10. Financial Projections and Assumptions

Bringing your great business ideas into reality is why business plans are important. They help create a sustainable and viable business.

The financial section of your business plan offers significant value. A business uses a financial plan to solve all its financial concerns, which usually involves startup costs, labor expenses, financial projections, and funding and investor pitches.

All key assumptions about the business finances need to be listed alongside the business financial projection, and changes to be made on the assumptions side until it balances with the projection for the business.

The financial plan should also include how the business plans to generate income and the capital expenditure budgets that tend to eat into the budget to arrive at an accurate cash flow projection for the business.

Base your financial goals and expectations on extensive market research backed with relevant financial statements for the relevant period.

Examples of financial statements you can include in the financial projections and assumptions section of your business plan include:

• Projected income statements
• Cash flow statements
• Balance sheets
• Income statements

Revealing the financial goals and potentials of the business is what the financial projection and assumption section of your business plan is all about. It needs to be purely based on facts that can be measurable and attainable.

11. Request For Funding

The request for funding section focuses on the amount of money needed to set up your business and underlying plans for raising the money required. This section includes plans for utilizing the funds for your business's operational and manufacturing processes.

When seeking funding, a reasonable timeline is required alongside it. If the need arises for additional funding to complete other business-related projects, you are not left scampering and desperate for funds.

If you do not have the funds to start up your business, then you should devote a whole section of your business plan to explaining the amount of money you need and how you plan to utilize every penny of the funds. You need to explain it in detail for a future funding request.

When an investor picks up your business plan to analyze it, with all your plans for the funds well spelled out, they are motivated to invest as they have gotten a backing guarantee from your funding request section.

Include timelines and plans for how you intend to repay the loans received in your funding request section. This addition keeps investors assured that they could recoup their investment in the business.

12. Exhibits and Appendices

Exhibits and appendices comprise the final section of your business plan and contain all supporting documents for other sections of the business plan.

Some of the documents that comprise the exhibits and appendices section includes:

• Legal documents
• Licenses and permits
• Credit histories
• Customer lists

The choice of what additional document to include in your business plan to support your statements depends mainly on the intended audience of your business plan. Hence, it is better to play it safe and not leave anything out when drawing up the appendix and exhibit section.

Supporting documentation is particularly helpful when you need funding or support for your business. This section provides investors with a clearer understanding of the research that backs the claims made in your business plan.

There are key points to include in the appendix and exhibits section of your business plan.

• The management team and other stakeholders resume
• Marketing research
• Permits and relevant legal documents
• Financial documents

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BUILT ENVIRONMENT JOURNAL

How to achieve the design and specification competency

Given that all successful construction projects rely on proper design and specification, how can APC candidates in building surveying show they have attained this competency?

• Jen Lemen FRICS

02 April 2024

Building surveying

RICS standards and guidance

Design and specification are two essential areas of technical competence that all building surveyors need to demonstrate.

The RICS pathway guide for building surveying states that: 'Building surveyors are usually involved in refurbishment of property, and in some cases new-build projects. Knowledge of the stages of design and specification from inception to completion is an essential building surveying skill.'

The requirements for this competency by level are, briefly, as follows.

• At Level 1, you should demonstrate your knowledge and understanding of the design process and the scope and content of related documentation, including different types of specification.
• At Level 2, you should provide evidence of preparing designs and specifications, at both outline and detail levels.
• At Level 3, you should provide evidence of giving reasoned advice and preparing the full design and specification for a variety of projects.

Level 1 requires understanding of how design works

Key areas of knowledge at level 1 you should be aware of include:

• the design process and the stages within it
• how design fits into the RIBA Plan of Work
• the functional requirements and performance of building materials and components
• key health and safety legislation and regulations, such as the Health and Safety at Work etc. Act 1974 and The Construction (Design and Management) Regulations 2015 , including their implications for design
• the effect of technical standards and statutory regulations, such as the Building Regulations and various British Standards, on the design process and on planning
• the structural implications of design for the load-bearing components of building fabric
• your ability to interpret a client's brief to satisfy their requirements
• the general issues relating to design sustainability, such as materials and their sources as well as transportation and energy efficiency
• modern methods of construction
• preambles to contract documentation.

Related article

An A-Z of building pathology for APC

Higher levels attested by project preparation and management

Typical examples of level 2 experience that you might include in your case study or summary of experience include:

• preparing sketch designs based on a client's brief and adhering to any statutory requirements
• detailing the installation and performance of components on a project
• preparing a design risk assessment
• developing an initial proposal to a detailed stage, and obtaining statutory consents.

Meanwhile, typical examples of advice that prove you have achieved level 3 include:

• preparing and advising on the design and specification of a project
• advising on sustainability issues
• managing the design process, including incorporating design work by other professionals in a specification for the project.

Answer should clarify practical design process

You should be familiar with the building surveyor's role and responsibilities relating to design and specification for a variety of projects. Your summary of experience will need to convey this, with two or three practical examples at both levels 2 and 3. These need to be written in the first person and past tense.

Elements of this competency can also be included in your case study, and you can cover relevant knowledge acquisition in your CPD record as well.

You will then need to be ready to address questions on your examples and knowledge in your final assessment interview. You should always answer the assessors' questions according to your own practical experience, ensuring that you explain the advice you gave at level 3 or what you did at level 2. Talk through the rationale for the advice you provided, and think logically about the actions you took.

Although it may sound like a long time, the 60-minute interview is actually very short, so your answers should be concise and considered. Avoid the temptation to tell the panel everything you know about a specific example or the competency as a whole.

A sample answer at level 3 is given below, although you should think about how you could be asked a similar question in relation to your own experience. For example, where in your submission did you give advice, and what was it based on? If you were asked by an assessor what advice you gave, what would you say?

Ensure you can articulate your answers clearly and succinctly, and provide background knowledge and justification if you are asked.

Q: Explain the advice you gave during the development of the design process, from the initial outline proposals through to tendering for the works.

A: I worked closely with the client to develop and advise on the initial brief for a ground-floor extension. Following my development of outline proposals, I advised the client on its statutory obligations relating to planning and party wall matters.

Given the siting of the property and proximity to other buildings, I advised seeking pre-application advice from the local authority, and then amended the design accordingly.

To control and manage the risks associated with the client's requirements, the final design and building aesthetics, I recommended specialist input from a glazing contractor. I also coordinated input from the project engineer to help in the production of the structural and waterproofing packages.

Once the design was frozen and signed off by the client, I prepared a tender package, consisting of a National Building Specification – in addition to a schedule of works referencing the quality and products or materials to be used – pre-construction health and safety phase plan and the tender form itself.

I also advised my client of its obligations under The Construction (Design and Management) Regulations 2015 .

'You should be familiar with the building surveyor's role and responsibilities relating to design and specification for a variety of projects'

Jen Lemen FRICS is a co-founder and partner at Property Elite Contact Jen: Email

Related competencies include: Design and specification, Legal/regulatory compliance, Sustainability

RICS Building Surveying Conference

07 May | 9:30-17:00 GMT | 133 Houndsditch, London, EC3A 7BX

The conference provides an opportunity to keep abreast of sector updates, the latest regulations, and emerging trends in the building surveying industry.

Expert speakers will provide comprehensive insights into how these changes will affect professionals in the industry by delivering case studies and essential updates from a range of specialisms including building and fire safety, dilapidations, party walls, building conservation, rights of light, retrofitting and sustainability.

Find out more and book now

Enabling RICS SME members to thrive

At RICS, we want our SME members to flourish. Our SME Business Support Hub  is a great place to start finding out more.

Whether an experienced or start-up SME, you'll find tailored support and resources, such as: 

• guidance on business models
• statutory requirements
• financial management
• marketing and promotion
• practical advice on aspects of buying, selling or leasing property.

We also send a monthly SME newsletter, sharing relevant support, insight and knowledge. You can sign up for this by emailing  RICS directly.

Our quarterly UK Economy and property market update  is also designed with SMEs in mind, providing the kind of detailed analysis and insight that may otherwise be out of reach. We conduct regular webinars as well, to take members through the latest updates and provide a forum for their questions.

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The 10 Components of a Business Plan

Whether you’re planning to open a shop that makes the best coffee  or you want to sell eco-friendly office supplies, you’ll need to explain why your business is necessary and how it’ll differ from its competitors. That’s where your business plan comes in. It provides investors, lenders and potential partners with an understanding of your company’s structure and goals. If you want to gain the financial autonomy to run a business or become an entrepreneur, a financial advisor can help align your finances.

1. Executive Summary

Your executive summary should appear first in your business plan. It should summarize what you expect your business to accomplish. Since it’s meant to highlight what you intend to discuss in the rest of the plan, the Small Business Administration suggests that you write this section last.

A good executive summary is compelling. It reveals the company’s mission statement, along with a short description of its products and services. It might also be a good idea to briefly explain why you’re starting your company and include details about your experience in the industry that you’re entering.

2. Company Description

A company description includes key information about your business, goals and the target customers that you want to serve. This is where you explain why your company stands out from other competitors in the industry and break down its strengths, including how it offers solutions for customers, and the competitive advantages that will give your business an edge to succeed.

3. Market Analysis

This is where you show that you have a key understanding of the ins and outs of the industry and the specific market you plan to enter. Here you will substantiate the strengths that you highlighted in your company description with data and statistics that break down industry trends and themes. Show what other businesses are doing and how they are succeeding or failing. Your market analysis should also help visualize your target customers. This includes how much money they make, what their buying habits are, which services they want and need, among other target customer preferences. Above all, the numbers should help answer why your business can do it better.

4. Competitive Analysis

A good business plan will present a clear comparison of your business vs your direct and indirect competitors. This is where you prove your knowledge of the industry by breaking down their strengths and weaknesses. Your end goal is show how your business will stack up. And if there are any issues that could prevent you from jumping into the market, like high upfront costs, this is where you will need to be forthcoming. Your competitive analysis will go in your market analysis section.

5. Description of Management and Organization

Your business must also outline how your organization is set up. Introduce your company managers here and summarize their skills and primary job responsibilities. An effective way could be to create a diagram that maps out your chain of command.

Don’t forget to indicate whether your business will operate as a partnership, a sole proprietorship or a business with a different ownership structure. If you have a board of directors, you’ll need to identify the members.

6. Breakdown of Your Products and Services

While your company description is an overview, a detailed breakdown of your products and services is intended to give a complementary but fuller description about the products that you are creating and selling, how long they could last and how they will meet existing demand.

This is where you should mention your suppliers, as well as other key information about how much it will cost to make your products and how much money you are hoping to bring in. You should also list here all relevant information pertaining to patents and copyright concerns as well.

7. Marketing Plan

This is where you describe how you intend to get your products and services in front of your target customers. Break down here the steps that you will take to promote your products and the budget that you will need to implement your strategies.

8. Sales Strategy

This section should answer how you will sell the products that you are building or carry out the services that you intend to offer. Your sales strategy must be specific. Break down how many sales reps you will need to hire and how you will recruit them and bring them on board. Make sure to include your sales targets as well.

9. Request for Funding

If you need funding, this section focuses on the amount of money that you need to set up your business and how you plan to use the capital that you are raising. You might want to include a timeline here for additional funding that you may require to complete other important projects.

10. Financial Projections

This final section breaks down the financial goals and expectations that you’ve set based on market research. You’ll report your anticipated revenue for the first 12 months and your annual projected earnings for the second, third, fourth and fifth years of business.

If you’re trying to apply for a personal loan or a small business loan, you can always add an appendix or another section that provides additional financial or background information.

Bottom Line

Every company is different so your business plan might look nothing like another entrepreneur’s. But there are key components that every good plan needs to have, and it’s always a good idea to provide a clear and accurate summary of your business goals in your business plan.

Tips for Business Owners

• A financial advisor can help you align your personal finances to give you an edge as a business owner or an entrepreneur.  Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool  matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals,  get started now .
• If you are thinking of buying real estate, equipment, developing new products and other big-ticket activities for your business, you should consider using a capital asset pricing model  to determine whether an investment is worth your risk.

Photo credit: ©iStock.com/nandyphotos, ©iStock.com/shironosov, ©iStock.com/cigdemhizal

• Farhan Tanvir
• May 2, 2022

#040 Business Planning 💼

Updated: Jun 26, 2022

Hello folks 👋

This is post number 40! I like a good round number!

In this post, we are covering the Business Planning competency. If you are interested in one day taking a management role within the business, the contents of this competency are useful to understand. Generally, as QSs we focus on the technical side, but if you ever wanted to set up your own business or indeed delve into the operations of the firm you work for you need to understand the concept of business planning. This subject matter is also useful for some client work where you support the client with identifying their goals and objectives!

I would highly advise you to go through the candidate guide and the QS pathway guide to understand the basic requirements.

DISCLAIMER : The following is not an exhaustive set of notes, but it's an attempt to help those who, like me at the beginning, did not know where to start! Please feel free to let me know if I have said anything incorrect or out of date!

So what is Level 1 Business Planning all about?

The RICS note that to demonstrate competence at Level 1, you need to demonstrate your ability to:

Demonstrate knowledge and understanding of how business planning activities contribute to the achievement of corporate objectives.

Types of business plan, e.g. strategic, departmental, operational, corporate

A business plan is a guide that defines objectives and details the steps to take to achieve a particular business goal. Business plans are used throughout the growth of a company from its startup to its expansion to provide a path to success. There are many different types!

A strategic plan is generally used for internal purposes as a foundational plan for the entire business.

An operational plan focuses on mapping out the day to day operation activities a business needs to complete to achieve tactical goals as part of the strategic plan.

Although used interchangeably, a corporate plan typically includes strategic planning content, but also tactical or operational plans and budgeting. A strategic plan is therefore a sub-set of corporate planning.

A departmental plan is an individual strategy for a specific department within a business. It’s a micro-level report which identifies the performance, failings and requirements for that department.

The essential elements of a business plan

This is a fairly straightforward bullet point, have a look at this link to understand what a business plan looks like.

Organisational structures

An organisational structure is a system that outlines how certain activities are directed in order to achieve the goals of an organization. These activities can include rules, roles, and responsibilities.

The organisational structure also determines how information flows between levels within the company. For example, in a centralized structure, decisions flow from the top down, while in a decentralized structure, decision-making power is distributed among various levels of the organisation.

Here’s a link which describes some of the main org structures .

Methods for financial benchmarking (e.g. key financial ratios)

Financial analysis involves using financial data to assess a company’s performance and make recommendations about how it can improve going forward.

Use this link to learn more !

Meaning of working capital, stock, debtors and creditors

Working capital : this is a financial metric that is the difference between a company’s current assets and current liabilities. As a financial metric, working capital helps plan for future needs and ensure the company has enough cash and cash equivalents to meet short-term obligations such as unpaid taxes and short-term debt. More info here.

Stock : is any item stored by a business for use in production or sales

Debtors : This is a company or individual who owes money to a lender and is also often referred to as a borrower.

Creditors : are individuals, people, or other entities (i.e., organisations, government bodies, etc.) that are owed money because they have provided goods or services or loaned money to another entity.

Accounting techniques

See blog post #039 Accounting principles and procedures !

Cash accounting reports revenues and expenses as they are received and paid through cash inflows and outflows; accrual accounting reports them as they are earned and incurred through sales and purchases on credit and by using accounts receivable & accounts payable. Generally accepted accounting principles (GAAP) require accrual accounting.

Forecasting techniques

Business forecasting refers to the tools and techniques used to predict developments in business, such as sales, expenditures, and profits. The purpose of business forecasting is to develop better strategies based on these informed predictions.

Planning to meet corporate objectives

A corporate plan sets out the actions required, and identifies the resources available, to deliver the stated aims and objectives. The corporate plan is an important document that will help you continually monitor finances and liabilities, identify opportunities and control your internal systems and structures.

That’s it for this post folks - as always if you have any questions drop me a message!

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What are the three levels of business management?

• Corporate Level
• Management Level
• Operational Level

What is a business plan?

A document that defines the business objectives and suggests steps to be taken to realise the business strategy over the next 3 years.

Components of a Business Plan: • Division of the business into service type or client segment • Financial performance targets • Plan business opportunities and allocate staff resource • Budgeting and cash forecasting money in vs. money out to understand what you can afford to pay because you estimate what you will earn • Plan business opportunities, identify the resource required.

A business plan could help to: • Seek funding, • To gain new instructions, new clients, new customers • To help focus on key priorities • To allow the organisation to respond to change • For budgeting, and • To set targets for staff.

What are the business objectives of your company?

• To develop and grow the business sustainably in the sectors:

How do you contribute to business planning within your company?

• By preparing responses to invitations to tender.
• I took part in a tender interview for Project Management services for development works at the Britannia Leisure centre, Hackney .

How do you manage your time so that you do not work beyond your fee allowance?

Recording my time weekly in timesheets spent against each job allows my workload to be reviewed by senior managers in monthly team meetings.

Does the RICS have a business plan?

Yes the current plan covers the three years from 2014-2017:

Our primary focus over the next three years

Does the RICS have a Corporate Strategy?

Yes, the current strategy covers 2012 to 2017.

It sets out long term strategic goals of the organisation.

N1. What should you do when starting a business?

Create a Business Plan, such as a 3 – 5 year business plan.

N2. What is a business plan?

A formal statement of the business goals, how they are obtainable and the plan for reaching these goals.

N3. Why would you create a business plan?

• To help achieve funding.
• Set business objectives.
• Create a business direction.

N4. What would you expect to be included within this business plan?

• Method Statement.
• Goals and Objectives.
• SWOT analysis.
• Key Performance Indicators.

N5. What is a Mission Statement?

A formal summary of the company aims and values.

N6. What is a SWOT analysis?

internal study undertaken by a business to identify its strengths, weaknesses, opportunities and threats.

N7. What goals and objectives would you likely see?

• Expected profit margin.
• Expected Turnover.
• Markets the company are looking to move into.

N8. What is a Key Performance Indicator?

A measureable value to determine the success of project/venture.

N9. How is a business plan laid out?

• Executive summary.
• Financial Forecasts.
• Management team.
• Description of business opportunity.
• Market and Sales Strategy.

N10. What is Natta’s 5 year business plan?

• £60,000,000.00 turnover by 2018.
• Build the company’s main-contracting business, i.e. more Turn Key residential and care home builds.
• Maintain Health and Safety Record.
• Obtain three new clients a year.

N11. Why is Market Analysis important?

Increase sales through identifying areas of strength, and aligning these with opportunities.

N12. How does an up-to-date business plan help an organisation?

• Helps achieve funding.
• Market previous work to clients.
• Bring focus the company priorities.
• Allows staff to align their goals with the company’s.
• Help set budgets.

N13. In terms of Business Planning, how does your management ensure that you make a profit?

• Regular reporting.
• Forward planning.
• Accounting systems to track all costs.

N14. What is a PESTLE Analysis?

• Technological.
• Environmental.

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