The Business Plan

Question 1

What is a business plan

Answer 1

A formal document that a business owner needs to submit when they apply for a bank loan or for financial assistance

It describes the future strategy and financial development of the business, it covers a period of several years

Question 2

What does a business plan do

Answer 2

It sets out the goals of the business, usually for the immediate to medium future (3 to 5 years)

Question 3

What does a business plan need to do

Answer 3

Convince leaders, funders and investors that the business which the owner wantd to start or expand has a good chance of success

It also needs to provide all the information that will enable lenders, fuders or investors to assess the business concept, the management of the business and the financial state of the business

Question 4

Define venture capatilist

Answer 4

Someone who invests in New or young businesses with no proven record

Question 5

Define prospective

Answer 5

That is planning to be, for example a prospective worker is one who plans to be a worker

Question 6

describe an informal business plan

Answer 6

can be in any format that the business owner prefers, but it should cover each of the important aspects of the business. it should also lead to clear decisions about what needs to be done, and to prompt follow up action

Question 7

why do we need a formal business plan for

Answer 7

to apply for a loan from a commercial bank

apply for financial assistance from a government institution or a non-governmental organization (NGO) that promoters small business development

negotiate with investors(venture capitalists) or prospective business partners who may be interested in buying a share in the business

Question 8

how can a business plan be convincing

Answer 8

it needs to contain thorough research. it must show that the owners have a clear idea of where they want to go

Question 9

what are the components of a business plan

Answer 9

• a description of the product or services offered by the business
• the goals of the business, for example plans to expand or to increase turnover
• particulars of the business owner(s) and form of ownership
• management plan
• marketing plan
• production plan
• analysis of the current state of the business and of its future possibilities
• financial plan, for example fixed and variable costs, break-even points, mark-up on sales and percentage of profit