Topic 1.4.4 Business Plans Flashcards
What is the aim of a business plan?
to reduce risk associated with starting a new business and help owners to raise finance
Elements of a business plan
identify the business idea
- business aims and objectives
- target market
- forecast revenue, costs and profit
- cash flow forecast
- sources of finance
- location
- marketing mix
Who uses a business plan?
-owners
-partners and employees
-investors
-lenders
Benefits of a business plan
-forces you to think critically
-reduces risk
-analyse concept/industry
Problems of a business plan
-uncertainty
-lack of experience
-change
minimising risk
one of the roles of a business plan
reducing the chances of failure to an acceptable level, ideally close to zero
obtaining finance
one of the roles of a business plan
the process of finding funds for investment or for business activities
target market
a group of customers which the business is aiming to sell its goods or services to
business planning allows this group to be identified through market research
revenue forecast
a prediction about the amount of revenue coming into the business, which can be a judgement or based on past sales
projected costs and profits
predicting the expenses that the business will have to pay, and the excess of revenue over costs
business location
the place where the business decides to base its operations
market research can help to decide this
SMART acronym
Specific, Measurable, Achievable, Realistic, Time-bound
should be used when setting business aims and objectives
