102 - Business plans

Question 1

what is a business plan?

Answer 1

A statement that outlines the way in which a business will attempt to achieve its objectives - giving a clear idea of its operation and direction.
- they are ongoing not to be written and forgotten about

Question 2

what does a business plan include?

Answer 2

• Overview or executive summary
• The marketing plan
• The operations plan
• The human resources plan
• The financial plan

Question 3

what is included in the overview or executive summary?

Answer 3

-first clearly describe the business idea
- overview of the business will briefly describe the business opportunity that is to be explored

Question 4

what is included in the marketing plan?

Answer 4

• the market research (MR) carried out
• description of the pricing and promotional strategies
• the product and where/how it will be sold
• MR needs to establish is if possible, size of market, needs of customers and level of competition

Question 5

what is included in the operations plan?

Answer 5

-details of where the business will be located
-production method and any equipment needed
- in addition, information on the costs of production and where the business will buy supplies

Question 6

what is included in the human resources plan?

Answer 6

the number of employees and the skills, experience and qualifications they require will be outlined. Any management team will also be identified

Question 7

what is included in the finance plan?

Answer 7

• a sales forecast indicating potential revenues
• cash flow forecast for first 12 months
• profit and loss balance forecast for the end of the first year
• break even analysis
• where finance for starting and running the business will come from

Question 8

evaluate the importance of a business plan

Answer 8

(+) clear idea of direction and operation -> help run more smoothly
(+)allows to check progress against objectives and take action when they aren’t being achieved
(+)needed for potential investors and when seeking finance from banks
(-)if inaccurate it gives false hope, leading to failed investments
(-) in fast changing markets it could be harder to predict sales and costs accurately
(-) time consuming

Question 9

identify the main sources of information and guidance available to entrepreneurs

Answer 9

• The government
• Business support charities such as the Princes trust
• Banks and business financiers
• Ventures capitalists and investors