Business Plans- content, advantages and problems

Question 1

Business Plan:

Answer 1

a report describing the marketing strategy, operational issues and financial implications of a business start-up.

Question 2

Content of a business plan: (11)

Answer 2

details about the business
personal information
objectives
marketing plan
production plan
fixed assets
financial forecasts
details of finance needed and repayment
collateral offered 
long-term plans
SWOT analysis - stands for strengths, weaknesses, opportunities and threats

Question 3

Benefits of a business plan: (6)

Answer 3

clarify objectives
consider business idea throughly from every perspective
improve likelihood of success
what needs to be done to meet objectives
persuades lenders to invest capital- why it will succeed
valuable tool to help in running the business

Question 4

Problems with a business plan: (6)

Answer 4

underestimate how much it will cost to start up
operating costs turn out to be more than budgeted for
overly optimistic view of the business
assumptions about the size of market without supporting research.
overly optimistic in their sales forecasts
unrealistic about when payment can be expected