2.1.4 Planning Flashcards
What is a Business plan used for?
A business plan will be used both internally by the entrepreneur and externally by banks, external investors or those willing to provide grants
What is the contents of a Business plan?
The executive summary - a synopsis of the entire plan looking at the most important points.
The business and products or services.
The market e.g. size, share, competitors.
The marketing strategy.
The skills of the entrepreneur and other key employees
Operations.
Financial forecasts.
What is the purpose of a Business plan?
To secure external funding
To ensure that the firm develops a healthy financial structure
To help identify problem areas that the business might face
As a focus to set targets and check on the firms development
To provide realistic expectations of what can be achieved
What is a Cash flow forecast?
A forward looking statement that tries to predict cash inflows and outflows in the future.
Cash flow forecasts are an important part of a business plan
What is a Cash flow statement?
A cash flow statement is a backward looking statement that shows what happened to cash inflows and outflows
Cash flow statements are normally presented as a part of a business’ accounts
What is the formula for Net cash flow?
Net cash flow = cash inflows – cash outflows
What is the formula for Closing balance?
Opening balance + net cash flow
