Business planning and financial management

Business Planning

Business Plan: A document that summarises the operational and financial objectives of a business and contains the detailed plans and budgets showing how the objectives are to be realised.
SWOT Analysis: A tool used in the planning process that allows a company to understand its Strengths, Weaknesses, Opportunities, and Threats.
Market Research: Collecting and analysing data about the market related to a business’s products and services.
Marketing Plan: Describes the business’s marketing strategy including target customers, pricing, and promotion.
Operational Plan: An outline of how your business will function from the production and delivery standpoint.
Financial Forecast: An estimate of future financial outcomes for a business.
Feasibility Study: An assessment of the practicality of a proposed project or system.

Financial Management

Budgeting: An estimation of the income and expenditure of a business over a set period of time.
Working Capital: The capital of a business which is used in its day-to-day operations, calculated as current assets minus current liabilities.
Cash Flow Statement: A financial statement that shows how much cash (and cash equivalents) comes in and goes out of a business.
Profit and Loss Statement (or Income Statement): Provides a financial summary of a company’s revenues, costs and expenses incurred during a specific period of time.
Balance Sheet: A financial statement that reports a company’s assets, liabilities and shareholders’ equity at a specific point in time.
Financial Ratios: Mathematical comparisons of financial data from a company’s financial statements that help understand a company’s overall financial health.
Break-Even Analysis: The point at which total cost and total revenue are equal, i.e., “break even”. It’s used to determine the minimum output or sales needed for a business to avoid loss.

Key Takeaway

Understanding Business planning and Financial management is instrumental for running a successful business in the land-based sector. Good business planning ensures the business stays on target and adjusts to market changes, while sound financial management steers the business towards profitability and sustainability.