Business plans

Question 1

What is a Business plan

Answer 1

A written document describing:
- Nature of the business
- Business objectives
- Marketing strategy
- Projected cash flow
- Income statement

Question 2

Why is a Business Plan needed

Answer 2

• Goals/targets
• Plan of action
• Easier to raise finance

Question 3

What are the 5 components of a Business Plan

Answer 3

• Exec Summary (explain the idea + objectives)
• Marketing Plan (displays market research)
• Operations Plan (Location, production and suppliers)
• HR Plan (employees + hierarchy)
• Financial Plan (sales forecast, cash flow, balance sheet)

Question 4

What are the benefits of a Business Plan

Answer 4

• Owner has clear set of instructions on how to run business
• Allows owner to work towards goals and monitor cash flow
• Helps present company to potential investors

Question 5

What are the drawbacks of a Business Plan

Answer 5

• Costs of market research (time and money)
• Naivety on forecasting financials (costs, revenue, profits)
• Inaccurate plan leads to unachievable objectives