23. Planning Flashcards
The contents of a business plan:
- An executive summary
- Elevator pitch
- The business and its objectives
- The business opportunity
- Owner’s background
- The market
- Personnel
- Premises and equipment
- Costing and finance
- Financial forecasts
- SWOT analysis
An executive summary
Very important as anyone who reads only part of the plan, such as potential investors or banks, will always look at this particular section. It describes briefly the business opportunity to be exploited, the marketing and sales strategy, operations and sales finance
Elevator pitch
This is a summary that can be used in a ‘pitch’ about the business
The business and its objectives
This section should state the name of the business, its trading address, its legal structure and its objectives
The business opportunity
Necessary to explain clearly what the business plans to sell. Important because readers may not be familiar with the products.
Owners background
Potential investors, money lenders and suppliers will need to assess whether the owners should be offered credit. They will have to decide wheather the people running the business are competent and trustworthy.
The market
Show size of the potential market and identify customer profile together with competition.
How the business will communicate with potential customers:
- Methods of adveritising and promotion that might be used
- The role played by social media
- The business website
- Business literature, such as leaflets
- The role played by word-of-mouth advertising
Personnel
The business plan needs to clarify the number of employees needed and the skills, qualification and experience that will be important.
Premises and equipment
This section of the business plan will need to list all the resources that will be needed by a new business
Costing finance
Working out how much it will all cost. It is very important as entrepreneurs will find it almost impossible to raise capital or borrow money if they cannot say with some accuracy how much will be needed before trading can begin
Financial forecasts
Might include sales forecast, a cash flow forecast, a profit and loss forecast
SWOT analysis:
- Strengths
- Weaknesses
- External oportunities
- Threats
Purpose and relevance of a business plan
It is prooved that business that have a business plan are more likely to succeed. A business plan will also be needed for funding, both at the start-up stage and in the future. Also when a company plans to raise money by floating in the stock market, invertors will have to be confident before buying shares.
Business plan
A documented plan for the development of a business, giving details such as the products to be made, resources needed and forecasts such as costs, revenues and cash flow
Undercapitalised
A business with insufficient capital to run effectively
