Lesson 3

Question 1

what is a business plan?

Answer 1

• A business plan is a document which sets out the future plans for a business. - it is how a business owner will explain how they will turn their idea into a successful business.
• The owner may then show the plan to a bank or another investor to ask for finance to help the business grow and expand.

Question 2

Why does a business write a business plan?

Answer 2

• To persuade lenders that the business will make enough profit to be able to pay back interest and loan capital on any finance taken out
  . -Attract potential investors to the business
• to be able to understand and achieve its aims and objectives,
• A business plan will help to identify early on any problem areas that the business might face

Question 3

What is included on a business plan?

Answer 3

A cash flow forecast: which shows the expected income and expenditure of a business over the coming year./ shows a bank that the interest rates can be afforded on any finance that they borrow. / shows the liquidity of the business (how quickly it con raise cash) and its ability to pay its bills.

Question 4

What goes into a business plan?

Answer 4

• name of the business
• product or service
• targets market
  -4ps - premises and how it will be finance’s

Question 5

What is the purpose of a business plan?

Answer 5

• help to set up a new business
  -help to set business objectives
  -help to raises business finance
  -to outline how functions of the business will be organised