Planning a Business: Research and the Business Plan

Coursework, not an exam paper

Unit 3 is worth **20%** of the qualification and there is no exam for it. Instead you produce two booklets under the conditions your centre sets. - **Booklet A, Planning**: proposing research methods, action planning, and designing the research tools. - **Booklet B, Communicate Findings**: presenting and referencing what you found, using it to support your responses, and evaluating it to reach logical conclusions. ⚠️ **You are not asked to produce a complete business plan.** The booklets set the task. What you do need is to KNOW what goes into a plan, because your research has to support those sections. **It is synoptic**, which means it pulls together what you learned in Units 1 and 2. The plan contains a marketing plan, a production plan, a resource plan and a financial plan, and all of those are things you have already studied. **This module is about assembling them, not learning them again.** ⚠️ **The work must be your own and completed under your centre's supervision arrangements.** What follows is about doing it well, not about doing less of it.

Marked on how you worked

This is the single most important difference between coursework and an exam, and it changes what you spend your time on. **In an exam, the answer is the evidence.** Nobody sees how you got there, so what is on the page is all that counts. **In controlled assessment, the process IS the evidence.** The marks are for proposing sensible research methods, planning the work, designing the tools, carrying it out, presenting and referencing what you found, and evaluating it before you conclude anything. **So a brilliant conclusion with nothing behind it scores badly**, and a modest conclusion that is properly researched, referenced and evaluated scores well. **Three habits follow from that.** Show the working rather than only the result. Reference every secondary source, because an unreferenced figure cannot be evaluated by anyone including you. And make sure **every conclusion can be traced back to a piece of evidence that actually appears in your booklet.**

What goes in a business plan

Six sections. Notice how much of this you have already studied: the plan is where it all comes together.

Match each section to what belongs in it

Where do the financial figures come from?

Your financial plan needs a break-even output and a cash flow forecast. Where should those numbers come from?

• From your own research: the prices you found competitors charging, the costs you found for premises and materials, and the demand your survey suggested
• Estimated so that the business appears profitable
• Copied from a worked example in a textbook
• Supplied by your teacher

Primary and secondary

A good Booklet A uses both, and says why each was chosen.

Writing a questionnaire that works

Select the TWO pieces of advice that would genuinely improve a questionnaire.

• Use mostly closed questions, which are quick to answer and easy to count, with one or two open ones for detail
• Test it on a few people first, and change anything they misunderstood
• Word the questions so that respondents are encouraged towards the answer you are hoping for
• Make it as long as possible so you gather the maximum amount of data

The order of the research

Put the stages of the research into the order they should happen.

• Decide what you actually need to find out, and write it down as a question
• Choose the research methods that would answer it, and say why each was chosen
• Make an action plan: what will be done, by when, and how you will know it is finished
• Design the tools, pilot them, and collect the data
• Present the findings in tables and charts, and reference every secondary source
• Evaluate the evidence, then draw conclusions that follow from it

Spot the leading questions

Four questions from a draft questionnaire for a new sandwich shop. Tap the TWO that would produce data you could not rely on.

• How often do you buy lunch away from home?
• Do you agree that there are not enough good sandwich shops in this area?
• What would you expect to pay for a sandwich and a drink?
• How much would you spend each week in our new shop?
• Which of these fillings would you choose most often?

Research and the plan

Research you collect yourself, such as a questionnaire or an interview, is called _____ research, while data that already exists, such as official statistics, is _____ research. Every secondary source must be _____ so that its age and reliability can be judged. A question worded to push respondents towards a particular answer is a _____ question and produces data you cannot use. Testing a questionnaire on a few people before using it properly is called _____ it. In this unit the marks are given for the _____ as well as for the conclusion.

Evaluating a piece of evidence

**A student writes: "My survey showed that 80% of people would use my shop, so there is clearly demand."** That sentence contains a conclusion with no evaluation in it at all. Here is what the evaluation should have said. **How many people?** If 80% means eight people out of ten, the figure is far too small to support a conclusion about a whole area, and saying so is worth more than the 80% itself. **Who were they?** Ten friends asked at school is not the same as fifty people asked outside the proposed premises at lunchtime. The sample has to resemble the customers. **What were they asked?** "Would you use my shop?" invites a polite yes. "How often do you buy lunch away from home, and what do you spend?" produces something you can build a forecast on. **Does it answer the question?** Willingness to use a shop is not the same as spending, and the financial plan needs spending. **A properly evaluated version:** "Fifty people surveyed outside the proposed premises reported spending an average of £4.20 on lunch, four days a week. The sample was taken on two weekdays only, so it may under-represent weekend trade, and it was self-reported rather than observed. Even allowing for that, the figures support a cautious estimate of demand, which I have used in the cash flow forecast at a reduced level." **Notice the last clause.** The conclusion is traceable to the evidence, and the caution is visible in the numbers that follow. That is what the evaluation marks are for.

Write a conclusion that follows

Build a conclusion that a marker can trace straight back to the evidence.

Working through the assessment

You are partway through Unit 3. Work through the decisions.

• Your survey results are disappointing and do not support the business idea you wanted. What do you do?
• You have found a useful statistic on a competitor's website. What must you do with it?
• Your cash flow forecast shows a shortfall in month three. Does that spoil the plan?

Your turn: plan the research

Choose a small business idea and plan how you would research it for Unit 3.

• State the business idea and write down the single question your research most needs to answer
• Choose one primary and one secondary method, and justify each in terms of what it will tell you
• Write three questionnaire questions, at least two of them closed, and check none of them leads the respondent
• Explain how you would evaluate your results before using them in the financial plan