Business Plans

Question 1

what is a business plan?

Answer 1

• a statement that outlines the way in which a business will attempt to achieve its objectives
• gives a clear idea of its operation, direction and where finances will come from

Question 2

where can you find advice for starting a business?

Answer 2

• gov.uk
• british chambers of commerce
• commercial banks

Question 3

what are the 5 core parts of a business plan?

Answer 3

1. executive statement
2. marketing plan
3. operations plan
4. HR plan
5. financial plan

Question 4

explain the executive statement

Answer 4

• overview of the business’s aims, objectives and strategy which is evidence that the proposal is viable
• sets out how the business is going to be run

Question 5

explain the marketing plan

Answer 5

• based on desk and field research
• market research establishes the size of the market, the needs of customers and the level of competition

Question 6

explain the operations plan

Answer 6

• details of where the business will be located, production methods and any equipment needed
• cost of production
• source of supplies

Question 7

explain the HR plan

Answer 7

• number of employees, the skills experiences and qualifications required
• management team to be identified

Question 8

explain the financial plan

Answer 8

• sales forecast indicating potential revenues
• cashflow forecast for the first 12 months
• profit/loss balance forecast for the end of the first year
• break-even analysis
• where the finance for starting and running the business will come from

Question 9

what are 4 benefits of having a business plan?

Answer 9

• sets out objectives and strategy
• helps to convince banks and lending institutions for finance
• useful as a monitoring tool
• outlines marketing strategy

Question 10

what are 2 negatives of business plans?

Answer 10

• external factors like economic recessions can impact a business’s success
• time consuming and an opportunity cost