Download Unit 5 Principles of Business Workbook Part 2

BePro Workbook
Unit 5 LO 3 Understand Financial Management, 3.1 3.2, 3.3,
Unit 5 LO 4 Understand Business Budgeting 4.1, 4.2
Good financial management is essential for any business to survive in the short term and
to be profitable in the long term. Financial management involves effective planning,
including financial analysis and budgeting, to make sure that costs and income can be
balanced to cover the cash flow requirements of the business. This, in turn, allows the
business to achieve its operating objectives and goals. Financial decision-making is
undertaken to determine resource allocation and to control business expenditure.
The finances of a business need to be continuously monitored and controlled to ensure
that planned incomes and expenditures occur as and when needed, and that there is as
little variation from the planned budget as possible.
Consequences of poor financial management include:
●
wide variances against the budget and business plan
●
large amounts of wastage
●
cash flow problems
●
possibly even insolvency.
A budget is a financial plan. Examples of budgets include a marketing budget, a training
budget and a sales budget. Budgets are created in order to:
●
control income and expenditure
●
establish financial priorities and targets
●
provide direction and co-ordination for the organisation
●
monitor performance
●
inform management decisions to plan future activities
●
improve overall efficiency.
Budgets are managed by:
●
identifying priorities and timescales
●
negotiating and agreeing financial resources
●
accurate recording of income and expenditure
●
monitoring income and expenditure against planned activity.
By doing this, corrective actions can be taken, if required.
Complete the table below to show your understanding of financial management and
budgeting.
Understanding financial
management and
budgeting
Your answers
Explain the importance of
financial viability for an
organisation.
Viability means:
................................................................................
................................................................................
Financial viability is important for an organisation
because ................................................................
...............................................................................
...............................................................................
...............................................................................
Explain three consequences of
1.
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poor financial management.
2.
3.
Explain in detail at least five of
the financial terms listed below.
● income
● fixed costs
● expenditure
● variable
costs
● transaction
● cash flow
● accounts
● gross profit
● net profit
● capital
● debtors
● creditors
● turnover
● profit and
loss
account
● breakeven
point
1.
2.
● tax
● VAT
● assets
● depreciation
● investments
3.
● accruals
● stock
● liabilities
● shares
● balance
sheet
4.
5.
Explain three uses of a budget.
1.
2.
3.
Explain in detail the different
ways in which a budget can be
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managed.
Unit 5 LO 5: Sales and marketing
Unit 5 5.1,
5.2, 5.3, 5.4,
5.5
The next section explores the principles of marketing and will examine the nature of a
sales process. You will outline the main types of market research that are commonly
used to make marketing decisions. These include primary (desk-based) and secondary
(field-based) types of research. You will also gain an understanding of the relationship
between sales and marketing in business, and consider how they can work together to
achieve a common goal. Traditionally, a sales approach is a short-term view of selling
that concentrates on achieving a single sales transaction with a customer. A marketing
process, on the other hand, focuses on maintaining a longer-term and ongoing
relationship with customers, to understand their needs better, to find ways of increasing
customer retention and customer loyalty to the business.
http://www.cim.co.uk/files/7ps.pdf Have a look at what the Chartered Institute of
Marketing have to say about Marketing and the 7Ps.
1.
The principles of marketing consist of the 7 Ps. Complete the table below explaining
each element of the 7 Ps. You should use examples from your own workplace
wherever possible to illustrate your answer.
Marketing principles – the 7 Ps
P
Explanation
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Physical presence
7. Process
2.
A sales process consists of seven stages. Complete the table below to explain what
happens at each stage.
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https://www.nasp.com/article/AE1B7061-3F39/the-seven-stages-of-the-sales-cycle.html
See what nasp say about the seven stages or find your own examples then complete the
table below.
Stage of sales process
What happens at this stage
1. Prospecting for sales
2. The approach
3. Establishing customer needs
4. The presentation
5. Overcoming objections
6. The close
7. Following up
3. Explain the features and uses of market research in the following table – Do some
research on market research and answer the following questions.
Market research
Definition of market
research
Market research can be defined as
.....................................................................
(Remember to
include your source.)
................................................................................................................
..............
................................................................................................................
..............
Source: ...........................................................................................
The two main types
of market research,
with brief explanation
of each
1.
2.
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Two uses of market
research
1.
2.
Branding
Explain in detail the value of a ‘brand’ to an organisation
Sales vs Marketing
Explain in detail the relationship between sales and marketing
Stretch
If you would like to learn more about sales and marketing, you can look at the
following resources:
Books:
Brassington, F. and Pettitt, S. (2012) Essentials of Marketing (3rd edition), Harlow:
Pearson (ISBN 978-0-273727-64-4).
Evans, V. (2013) Key Strategy Tools: The 80+ Tools for Every Manager to Build a
Winning Strategy (1st edition), Harlow: FT Publishing International (ISBN 978-0273778-86-8).
Jobber, D. and Ellis-Chadwick, F. (2013) Principles and Practice of Marketing (7th
edition), London: McGraw-Hill Education (ISBN 978-0-077140-00-7).
Liker, J. (2004) The Toyota Way: Fourteen Management Principles from the World’s
Greatest Manufacturer (reissue edition), London: McGraw-Hill Education (ISBN 978-0071392-31-0).
Meerman-Scott, D. (2013) The New Rules of Marketing and PR (4th edition), New
York: Wiley (ISBN 978-1-118488-76-8).
Zimmerman, J. (2012) Social Media Marketing All-in-One for Dummies (2nd edition),
New York: Wiley (ISBN 978-1-118215-52-4).
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