Business Plans Flashcards
What is a business plan?
A business plan is a forecast of business operations including a statement of business objectives, a cash flow forecast a plan of staffing needs and marketing methods.
What will a business plan include?
1) Marketing plan.
2) An operational plan.
3) A financial plan.
4) A human resource plan.
5) An executive plan.
What is the marketing plan?
Plan that includes market research such as market mapping of key competitors and their products together with a medium - long term plan for achieving objectives such a higher market share or a stronger product portfolio.
What is an operational plan?
A plan showing how the product will be produced and delivered tp customers in its target market.
What is a financial plan?
With a prediction of the business’s income from sales and expenditure from costs over a period time. This will help the business to assess its short - medium- long term needs in terms of finance.
What is a human resources plan?
A plan which will predict the staff needs of the business, including the level of skills and numbers of staff needed to achieve the business objectives. This plan will include predictions of staff turnover and managers required to supervise.
What is an executive plan?
A plan which is a short term summary of the main points from the detailed plan, such as key objectives of the business, key staff and financial information.
Why are business plans important?
1) For investors and lenders of finance they will want to see detailed forecasts of how the business will perform over time.
2) To obtain finance there must also be evidence of an analysis of the market and that there are sufficient skills and commitment to meet the forecast in the business plan. Lenders and investors will then be able to assess the risks of their potential investment in terms of the ability of the business to pay it back.
3) The benefit to the business is that reducing the risk to investors means they may be able to pay lower interest rates on loans or give smaller shares of the business to venture capitalists, keeping costs to a minimum while keeping as much ownership and control of the business as possible.
4) A business plan helps the business to look logically and methodically at the steps needed to achieve its aims and objectives.
5) A plan can be compared to actual progress to see whether deadlines, costs and profits are as predicted.
6) All parts of the business can measure their performance in achieving the plan and any problems can be identified and addressed before any major ones occur.
What is a forecast?
A calculation or estimate of how the business will perform in future in terms of financial and other measurements of success.
Why might a business plan not be as helpful to a business’s success?
If the business plan is unrealistic then businesses will fail to follow it making it useless.
What makes a great business plan?
The best business plans regularly amended to allow for any unexpected problems such as changes in costs or significantly more demand than can be be produced.
What are the main sources of information available to entrepreneurs?
1) Government organisations such as GOV.UK, Business Wales and Department for business, Energy and Industrial strategy. Government is keen to help SMEs as one day they can generate a lot of money for the economy.
2) Many other privately run organisations that support businesses such as Federation of Small Businesses, the British Chamber of Commerce, Antur Teifi in Wales and various banks and financial institutions. Advice is often free with some emphasising networking and training and others offering free services that lead to paid ones, such as banks offering help with writing business plans, which can assist with a loan application.
How might new businesses get financial assistance from the government?
Government organisations also offer grants for new businesses, which are non-repayable, and loans which must be repaid. For example, SMEs can apply for innovation grants these can be applied for where businesses have a new idea such as manufacturing products out of new materials, such as graphene.
