Business planning Flashcards
1
Q
What is the definition of a business plan
A
- A detailed description of a business, including the strategy , aims and objectives, financial planning and marketing.
2
Q
What are some benefits of a business plan
A
- Helps clarify the business owners and what requires completion
- Identifies problems in advance
- Can be shown to investors and lenders to obtain finance
3
Q
Why are cash flow forecasts useful
A
May help the owner predict when the business may have liquidity issues
4
Q
What is the formula for cashflow
A
- Inflows - Outflows
5
Q
How would a business increase cash flow
A
- Increase inflows by getting a loan from a bank
- Change the price of your products and increasing inflows
- Destocking , reduce amount of stock purchase therefore reduce outgoing
- Rescheduling payments, Debtors and creditors
6
Q
What are some limitations of cash flow forecasts
A
- a FORECAST, may be affected by economic shocks such as pandemics
7
Q
A
