Business planning — AQA GCSE Business
Test yourself on Business planning with AQA GCSE practice questions.
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Business planning explained
Basic financial calculations in a business plan turn raw figures into decisions.
Read the full explanation
A business plan requires estimates of revenue, costs and profit to assess viability. Revenue is calculated as selling price × quantity sold. Total costs are the sum of fixed costs and total variable costs (variable cost per unit × output). Profit or loss is then found by subtracting total costs from total revenue. For example, if a business sells 500 units at £10 each, revenue is £5,000. If fixed costs are £2,000 and variable costs are £6 per unit (£3,000 total), total costs are £5,000, resulting in £0 profit. These basic calculations support planning, help secure finance from investors or banks, and allow owners to set realistic financial objectives.
Your focus
- Calculate revenue, total costs, and profit or loss accurately from given data.
- Explain the difference between revenue, costs and profit in a business plan.
- Interpret a calculated financial result in the context of a business plan and explain what it suggests for the business.
Business planning exam tips
Marking Points
- Calculate revenue as selling price × quantity sold, keeping units consistent (for example £10 × 500 = £5,000).
- Calculate total variable costs by multiplying variable cost per unit by the output (for example £6 × 500 = £3,000).
- Calculate total costs as fixed costs + total variable costs, for example £2,000 + £3,000 = £5,000.
- Calculate profit or loss as total revenue − total costs, stating clearly whether the result is a profit or a loss.
- Interpret a calculated figure in context, for example stating that £0 profit means the business is only just covering its costs.
Examiner Tips
- 💡Show every stage of working, including the formula, substitution and answer with units, because method marks can be awarded even when the final figure is wrong.
- 💡Check the direction of each calculation: revenue, costs and profit are totals in pounds, not units.
- 💡When a question says 'using the data', quote the relevant figures from the case so the calculation is clearly linked to the business context.
Common Mistakes
- Adding fixed costs to variable cost per unit instead of multiplying variable cost per unit by output; correct by calculating total variable costs first, then adding fixed costs.
- Treating a negative profit as a positive figure; correct by labelling it a loss and keeping the minus sign in the working.
- Confusing revenue with profit; correct by remembering that revenue is the total money coming in from sales, whereas profit is what remains after deducting all costs.