Business Plans Flashcards
Define a business plan
A statement that outlines the way in which a business plans to achieve its aims and objectives. It can be used to attract investors or secure loans .
- Owners can use it to check progress and use it as a guide to make decisions
The 5 core parts of a business plan
• The introduction
• The Marketing Plan
• The Operations Plan
• The Human Resources Plan
• The Financial Plan
Explain the intro of the business plan
This provides an overview of the business’s aims, objectives and strategy, and is evidence that the proposal is viable. It sets out how the
business is going to be run
Explain the marketing plan of the business plan
Important part of any business plan based on both field and desk research. Market research carried out needs, if possible, to establish the size of the market, the needs of the customers
and the level of competition. When market research findings have been examined then the marketing plan can be prepared
Explain the operations plan of the business plan
Include details of where the business will be located, production methods and any equipment needed. Plus, information on the costs of production and where the business will buy supplies may be included.
Explain the human resources plan of the business plan
The number of employees and the skills, experience and qualifications they require will be outlined. Any management team will also be
identified.
Explain the financial plan of the business plan
A variety of forecasting will be necessary:
- a sales forecast indicating potential revenues
- a cash flow forecast for the first 12 months
- a profit and loss and balance forecast for the end of the first year
- a break-even analysis.
In addition, information on where the finance for starting and running the business will come from, indicating the available start-up capital as well as any potential borrowing.
Explain the benefits of a business plan
•Sets out their objectives and strategy - plan of how business will develop over a period of time that outlines the way in which they will attempt to achieve their business objectives.
• Outlines its marketing strategy – researches vital information such as the size of the potential market,
the strength of the competition, etc.
•Clear idea of direction and operation – strategic planning/setting objectives.
•Helps to convince banks and lending institutions of its ability to pay back loans – cash flow forecast.
Without one, obtaining finance, e.g. from banks, is less likely.
•Highlights strengths and identifies possible problems that can then be dealt with in advance.
•Sets out what personnel/skills will be required to run the business effectively.
•Helps them think ideas through – giving a clear idea of direction and operation. May help to identify
difficulties that may occur and allow the business to deal with them before they become a problem.
•Useful as a monitoring tool – e.g. compare actual performance with forecasts in the business plan.
•Used by a business customer they are supplying
Explain the drawbacks of a business plan
• May succeed if the product or service proves so popular that sales are very high and profits are made consistently.
• May succeed without one if the business is small and easily-managed, e.g. window cleaner.
•No business can be guaranteed success however good the business plan.
•External factors may make the business successful even if business plan not drawn up – economic upturn, change in the law/government policies.
The main information that should be included in a business plan
- the business idea (services/products they offer)
- how the business will be funded
- marketing strategies
- competition
- employees or skills required
- background info on the entrepreneur
Where can entrepreneurs get access to information and guidance on completing a business plan and starting a business ?
- Friends and Family
- Governments
- Business Advisors
- Competitors + industry data
- The Princes Trust
- Start up Donut - website that covers a wealth of information, right from starting to develop a business plan to having to deal with paying taxes and being responsible for looking after staff.
- Business Gateway - specialise in webinars and events that bring networking opportunities to small business owners.
- Shell LiveWIRE
