2.4 Financial Planning

Question 1

What is a business plan?

Answer 1

It is a look into the future of the business.

Question 2

Why do businesses use a business plan?

Answer 2

-To persuade lenders
-Attract potential investors
-To give the owners a sense of direction
-To set targets

Question 3

What does a business plan include?

Answer 3

-Cash flow forecast
-Start-up cash flow management

Question 4

What is a cash flow forecast?

Answer 4

It predicts the amount of money that will flow in and out of the business

Question 5

What does the cash flow forecast involve?

Answer 5

-How much money you recieve each month
-Where your money comes from
-How much you spend each month
-Are the any times in the month you have a shortage of cash

Question 6

What are cash inflows?

Answer 6

The money coming into the business. Also known as receipts.

Question 7

What are cash outflows?

Answer 7

This is the money going out of the business. Also known as payments.

Question 8

What are some examples of cash inflows?

Answer 8

-Sales revenue
-Loans
-Grants
-Selling shares

Question 9

What are some examples of cash outflows?

Answer 9

-Buying stock
-Pay expenses
-Repay
-Buy equipment

Question 10

What are some factors that impact cash flow?

Answer 10

-Consumer trends
-Economic variables
-Competitors action