1.4 Bussines Plan Flashcards
What is consisted in a business plan?
-[aims and objectives]
-[idea]
-detail about owner(Experience)
-[business structure ]
-business functioned are organised
-detail about product
-include market research(shows target market, price of product, market for product, location) [marketing mix]
- provide a unique selling point
-market info: product reach customers and why they hit it
-legal structure
-[finance (sources, costs)]
-[cash flow forecast]
-[target market]
What are the Benefits to a business plan?
Reduce risk (think carefully)
Used to raise capital (loans)(stakeholders)
- help managers decide what aim & objectives for business
-make business decisions
What are the disadvantages to a business plan?
- requires long time
-costly to set up
— not a guarantee to succeed
-requires flexibility to adapt to market.
What are sole traders? And there ADV and DSV
A privately owned business that is self employed(plumbers, hairdressers)
DSV
Have unlimited liability (liable for business debts, risk house/assets)
Unincorporated (one single legal identity, cussing them to personally be payed back)
NO PROFIT FOR YEARS(long work hours, banks reluctant to loan money)
ADV
Easy and low cost(small start up capital fund)
Owner has total control of business(little argument)
-low running cost(pay not corporation tax
-owner keep all profits after taxes payed)
What is a limited company?
The business is unincorporated (owner and business has separate legal identity)
Has limited liability(personal assets protected)
What are partnerships?
A business owned and managed by two Poeple. May require more owners to invest. Which must sign a deed of partnership . Sharing the work loans and skills.
-the finance includes banks
-it has unlimited liability and is unincorporated
Although owners may disagree over key decisions.
(Not usefal if the bussines expands)
What is a private limited company?(ltd)
The business has limited liability and is incorporated .
Involves company selling shares of ownership to private owners.m, which can be friends or family. Meaning they only lose capital they invest(less financial risk)
-can continue to operate after death.
Has wider variety of skills and expertise
Also the Owners pay dividends too shareholders
Information is record to the government and hidden from public views. Although bussines model is more complicated than a sol trader
What 3 factors must a bussines consider when relocating bussines
-proximity. To market
-proximity to resources
-proximity to labour
What is a franchising
Established business licencses some else(franchisee) to use it name, to sell its products/services.
(Used for multinational companies)
What is a franchisee?
An individual who has the right to use the business model to start there own business.
(Can operate as sole trader, partnership & private limited company)
Using franchisees:
-trade name
-trademarks
-products
-logo
-training services
What are the ADV(5) and DSV (4)of franchising?
AdV
-franchiser quickly establish new stores
-franchiser share risk with franchisee
-franchisee are motivated & provide excellent customer service=bussines success
-(franchisee) lower risk of failure
-(franchisee) support and guidance [training]
-(franchisee) established connections
DSV
-franchisee: must provide capital and open/run new stores
-franchisee has strict guidelines (price, layout)
-franchiser enter agreements with poor-entrepreneurs
-franchisee may purchase cheaper supplies- from not following guidelines =damage brand image
-(franchisee) share profits, substantial money pay back
What is a joint venture?
Where 2 or more business agree to work together on particular project/product
What does the marketing mix consist of?
-price
-product
-promotion
-place
(Makes bussines competitive, adapting to change in customer needs
What does price mean in the marketing mix?
How mucha business want customers to pay products/services .
(Dependant on quality. & niche)
What does product mean in the marketing mix?
Refers to items being sold, for customers to buy (USP helps)
