Chapter 4- Developing Business Plans

Question 0

What are the benefits of a business plan?

Answer 0

• help clarify objectives
• help consider business idea thoroughly from every perspective
• enables owners to know precisely what needs to be done to meet objectives (targeting specific customers)
• essential document in persuading lenders to invest capital
• monitor success and should be reviewed regularly

Question 1

What is meant by the term “Business Plan”?

Answer 1

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

Question 2

What are the cons of a business plan?

Answer 2

• needs to be accurate and realistic, should not only show strengths and opportunities
• should not underestimate costs
• vague and many assumptions
• too optimistic in sales forecasts

Question 3

What is the content of a business plan?

Answer 3

• details about the business
• personal information
• objectives: SMART
• marketing plan
• production plan
• fixed assets
• financial forecasts
• details of finance needed and repayment
• collateral offered
• long term plans
• SWOT analysis