Business plan Flashcards
Business plan
A business plan is a document containing the business objectives and important details about the operations, finance and owners of the new business.
What does a business plan do
It provides a complete description of a business and its plans for the first few years; explains what the business does, who will buy the product or service and why; provides financial forecasts demonstrating overall viability; indicates the finance available and explains the financial requirements to start and operate the business.
Some of the content of a regular business plan are:
Executive summary: brief summary of the key features of the business and the business plan
The owner: educational background and what any previous experience in doing previously
The business: name and address of the business and detailed description of the product or service being produced and sold; how and where it will be produced, who is likely to buy it, and in what quantities
The market: describe the market research that has been carried out, what it has revealed and details of prospective customers and competitors
Advertising and promotion: how the business will be advertised to potential customers and details of estimated costs of marketing
Premises and equipment: details of planning regulations, costs of premises and the need for equipment and buildings
Business organisation: whether the enterprise will take the form of sole trader, partnership, company or cooperative
Costs: indication of the cost of producing the product or service, the prices it proposes to charge for the products
Finance: how much of the capital will come from savings and how much will come from borrowings
Cash flow: forecast income (revenue) and outgoings (expenditures) over the first year
Expansion: brief explanation of future plans
What can a business help you with
Making a business plan before actually starting the business can be very helpful. By documenting the various details about the business, the owners will find it much easier to run it. There is a lesser chance of losing sight of the mission and vision of the business as the objectives have been written down. Moreover, having the objectives of the business set down clearly will help motivate the employees. A new entrepreneur will find it easier to get a loan or overdraft from the bank if they have a business plan.
