Chapter 12 Business Plan

Question 1

A business plan entails:

Answer 1

WHERE A BUSINESS VENTURE IS HEADED

WHAT IT HAS TO DO TO GET THERE

WHAT IT WILL LOOK LIKE ON ARRIVAL

Question 2

Reasons for preparing a business plan?

Answer 2

Helps entrepreneur:

WORK SMARTER RATHER THAN HARDER

DEVELOP AND UPDATE BUSINESS STRATEGY TO ASSESS EFFICACY OF IDEAS AND APPROACHES

DEVELOP A CONCERN FOR REALIZING GOALS AND SHOWING PROGRESS IF STATED CLEARLY, THUS ALLOWING EVALUATION OF PERFORMANCE AND PROGRESS

SET REALISTIC GOALS

ESTABLISHES A BLUEPRINT FOR STARTUP OR ACQUISITION PROCESS

IMPROVES MOTIVATION

Question 3

A business plan CANNOT

Answer 3

PREDICT THE FUTURE

GUARANTEE FUNDING

RAISE ALL THE MONEY REQUIRED

FOOL ALL THE PEOPLE ALL THE TIME

Question 4

NEGATIVES OF BUSINESS PLANS

Answer 4

CAN BECOME RAPIDLY OUTDATED

MAY RESULT IN INFLEXIBILITY WHEN FOLLOWED TO STRINGENTLY

CANNOT REALIZE UNFORESEEN EVENTS

BUSINESS PLAN FORMULATION NEEDS VARIOUS RESOURCES WHICH MAY NOT BE AVAILABLE OR IN SHORT SUPPLY

Question 5

3 STEPS TO BUSINESS PLAN FORMULATION

Answer 5

1. DETERMINE THE PRESENT STATUS OF BUSINESS
2. DESCRIBE WHERE YOU WANT TO GO WITH THE BUSINESS AND DEVELOP OBJECTIVES TO TAKE YOU THERE
3. FORMULATE AN ACTION PLAN TO FACILITATE THE REALIZATION OF OBJECTIVES

Question 6

PLAN OF ACTION TO FORMULATE BUSINESS PLAN

Answer 6

1. DECIDE ON FORMAT AND OUTLINE
2. DECIDE ON SPECIFIC TASKS TO GE COMPLETED IN STARTING OR ACQUIRING A BUSINESS
3. PLACE TASKS ON AN ACTION CALENDAR
4. FORMULATE B.P AND MAKE ADJUSTMENTS TO TARGET DATES AND ACTION TO BE COMPLETED

Question 7

ASPECTS TO COVER ON BUSINESS PLAN

Answer 7

COVER SHEET

EXECUTIVE SUMMARY

TABLE OF CONTENTS

BRIEF HISTORY OF BUSINESS AND ITS PRINCIPLES

DESCRIPTION OF BUSINESS AND ITS MARKET

A DISCUSSION OF P/S

A DELINEATION OF THE MANAGEMENT AND ORGANIZATIONAL STRUCTURE OF BUSINESSES

DESCRIPTION OF GOALS AND OBJ

PRO FORMA STATEMENT

• comprehensive income
• financial position
• cash flows

APPENDICES

Question 8

International business plan

Answer 8

Supplies a detailed analysis of competitive advantage and disadvantages related to possible competitors in a foreign country to identify actions that would optimise strengths and minimise impact of weaknesses

3 IMPORTANT ASPECTS

• should have a set of overall obj
• optimal operating strategies should be decided on
• any business operating transnationally must maintain control over its widespread sections