Activity Five illustrates the importance of financial information and forecasting when starting a business. Financial information is important; it provides entrepreneurs with the evidence to support their decisions about a business and helps to justify those decisions when they present them to other people.
About this case study
The case study illustrates the importance of financial information and forecasting when starting a business. Financial information is important; it provides entrepreneurs with the evidence to support their decisions about a business and helps to justify those decisions when they present them to other people.
In this activity you will:
- Find out about the theory of forecasting and financial planning
- Meet Hannah our fifth entrepreneur and learn about her business challenges
- Hear the advice of the business professionals
- Provide your advice through an online poll
- Hear what Hannah actually did
- Check your understanding
- Relate the learning to your own business ideas
Having completed this activity you will be able to:
- Understand the purpose of a sales revenue forecast and a profit forecast
- Understand the link between cash flow forecasting and funding requirements
- Know if a business idea is going to be profitable and sustainable
Interpreting financial performance
In this Lecture Dr. Richard Tunstall explains why forecasting and planning are key skills within any successful business.
During the video Richard poses 3 questions that you might like to consider:
1. What would be the best combination of price per unit & number of sales to achieve a sales revenue of £100?
2. How could you improve the gross profit and net profit of the enterprise?
3. How could you improve the long term viability of the business proposition?
Feel free to share your thoughts and ideas in the comments section before moving on to find out about the challenges that Hannah faced when deciding how to ensure her business is profitable.
Hannah’s Business Challenge
In this case study the entrepreneur has a challenge regarding the financial implications of taking her business forward. Hannah has identified a number of options and she is asking you to consider these options and discuss your thoughts with your fellow learners.
Watch the video case study and then, having considered the importance of business processes and information systems for a successful company, decide what you think Hannah should do.
Having reached your decision move on to the next step where our four advisers give their response.
Each adviser has provided their thoughts on how Hannah should move her business forward. The video above provides a consolidated response featuring key points from each adviser.
What do you think?
Our entrepreneur needs your help! Having watched the case study and adviser videos it’s time for you to vote for the option(s) you think our entrepreneur should choose.
Hannah Gillicker: Break the Boundary Records
In this video Hannah explains which options she chose and why. Are you surprised by her choices?
If you would like to know more about Hannah you can access her profile on the University website.
Check your Understanding
Check your understanding by completing our short online quiz. You can download the answers once you have completed the questions.