Syllabus: Pearson Edexcel AS Business
Module: Raising Finance
Lesson: 2.1.4 Planning

Introduction

This article is aligned to Pearson Edexcel AS Level Business, Theme 2: Managing Business Activities, specifically Section 2.1.4 – Planning. It supports teachers, SLT, careers leads and headteachers by demystifying how planning connects financial concepts to practical business realities, and how it’s assessed in exams. The focus is on helping students grasp how cash flow forecasts and business plans underpin decisions about raising finance. This is an area where theory can feel abstract – so we’ve anchored it in real-world applications and made space for enterprise thinking that supports skills for life, not just the exam hall.

Key Concepts

According to the Edexcel specification, 2.1.4 Planning covers:

• Cash flow forecasts: Students need to understand their structure, purpose and limitations. This includes:

  • Inflows and outflows

  • Net cash flow

  • Opening and closing balances

• Interpretation and analysis: Ability to spot problems such as negative cash flow, delayed inflows, or rising costs.

• Solutions to cash flow issues: Strategies such as overdrafts, delaying payments, or increasing sales.

• Limitations of cash flow forecasts: Including uncertainty, reliance on estimates, and unforeseen changes in the market.

• Business plans: What they contain, how they support financial planning and investor confidence, and how they evolve over time.

These are fundamental to understanding how and why businesses raise finance, and how they ensure that money is available when it’s needed.

Real-World Relevance

Teaching cash flow forecasting often risks becoming a spreadsheet exercise. But framing it as a survival tool makes it tangible. Take the example of Gymshark, a brand that bootstrapped its way through early financial hurdles. Founder Ben Francis created detailed cash flow forecasts to keep inventory moving and avoid stockouts, knowing his next hoodie drop depended on it.

In a more local context, use the case of a student-led tuck shop or Year 12 Young Enterprise project. These small ventures vividly show what happens when inflows are delayed or outgoings exceed expectations.

Pair this with news stories: think of high-street brands like Wilko, whose failure to manage cash flow and financing led to closure, despite decent revenues. These stories help students see how forecasting isn’t just maths – it’s business strategy.

How It’s Assessed

Assessment comes in the form of short-answer and extended response questions across Paper 1 and Paper 2. Expect:

• Data response questions involving partial cash flow statements or planning documents.

• Use of command words like Analyse, Discuss, Evaluate, and Calculate.

• Students may be asked to:

  • Complete or interpret a cash flow forecast.

  • Suggest and justify solutions to cash flow problems.

  • Evaluate the reliability of forecasts or business plans in real scenarios.

Top-tier responses will balance accurate calculations with well-developed reasoning about business impact and uncertainty.

Enterprise Skills Integration

Planning is a goldmine for skills-based learning. It reinforces:

• Problem-solving: How to tackle cash shortages with limited options.

• Decision-making: Choosing between delaying outflows or sourcing new income.

• Numeracy and digital literacy: Building and interrogating spreadsheets or planning software.

• Resilience and adaptability: Learning how businesses adjust plans when reality shifts.

You can embed Enterprise Skills’ MarketScope AI here to test different sales or cost scenarios, or use Pitch Deck Analyser to critique business plans from a financial perspective.

Careers Links

This topic maps strongly to Gatsby Benchmarks 4 and 5: linking curriculum learning to careers and encounters with employers.

Roles where this content is especially relevant:

• Finance Officer or Analyst: Creating and managing forecasts.

• Entrepreneur: Managing seasonal cash flow or scaling up with minimal capital.

• Banking/Investment Analyst: Evaluating business plans for funding decisions.

• Project Manager: Budget planning and risk mitigation.

Consider inviting a local business owner or accountant to discuss how they use cash flow data to make decisions. Even better if they can bring a real (redacted) example.

Teaching Notes

• Common pitfalls: Students often confuse cash with profit. Reinforce that a business can be profitable and still run out of cash.

• Scaffolding: Start with manual cash flow templates before moving to digital tools. This builds foundational understanding.

• Extension activity: Ask students to analyse a fictional start-up’s cash flow forecast, suggest improvements, and pitch their plan to the class.

• Cross-topic integration: Tie this to 2.1.1 Internal Finance and 2.1.2 External Finance to show why businesses need to plan cash flow in tandem with funding choices.

Use it as a springboard for collaborative work and critical thinking – don’t just stick to worksheets. Real-world application boosts engagement and memory retention.