unit 1.1 Business plan

Question 1

what is a business plan

Answer 1

formal detailed written document that describes a business, its objectives, strategies and financial forecasts. includes products or services, target market, competitive landscape and marketing and sales strategies. Useful planning tool. requires business owner to plan their marketing, financial and human resources of the business

Question 2

purpose of creating and using a business plan

Answer 2

1. devise a suitable and feasible strategy for growth
2. to determine the future needs and direction of the organization
3. allows entrepreneurs and decision makers to make informed and objective decisions about their business
4. to secure sources of finance ( from lenders such as commercial banks) to attract potential investors (strategic partners, shareholders and business angels)

Question 3

Advantages of a business plan

Answer 3

• helps focus the entrepreneur
• it adds substance to a business idea or proposal, in order to support strategic decision-making and planning
• entrepreneurs are more likely to succeed id their business strategy is carefully planned
• helpful for raising finance ia banks, angel investors
• means for making all employees aware of the business´s strategic plan and direction

Question 4

disadvantages of a business plan

Answer 4

• takes lon g time to write, rarely updated or used after creation (specially for startups)
• often only the executive summary is looked at by potential investors or banks
• only as good as the research and forecasts that went into making it
• external factors can affect the accuracy of the plan

Question 5

elements of a business plan

Answer 5

1. executive summary: summary of business plan
2. introduction of business, legal status (type of business entity), vision and mission statements and goals and objectives. Will also include details of the key personnel (owners or CEO) and could contain organizational chart
3. market- included details of the market or industry in which the organization operates, a competitor analysis and possibly SWOT analysis
4. product- description of planned product or service being offered
5. financial- identifying the funds needed to cover both set-up and operating costs as well as future projections of sales, profit and cash flow
6. Marketing: pricing strategies, distribution, promotional comapigns and product

Question 6

what is a business plan used for

Answer 6

versatile and can be used as an organization grows and seeks to persue various growth strategies