2.1.4 planning and cashflow

Question 1

name 1 role of a business plan in raising finance

Answer 1

helps finance givers assess the business model - more likely to gain finance

Question 2

name the key contents of a business plan

Answer 2

introduction/business model - type of business
product and market positioning
management team
market assessment
financial forecasts
key opportunities and threats
investment requirements

Question 3

why is cashflow important

Answer 3

its fluid - unpredictable
its the main reasona business fails

Question 4

why produce a cashflow forecast

Answer 4

to give advanced warning of cash shortages
sort problems with customer payments
provide reassurance to investors

Question 5

what is a cashflow problem?

Answer 5

when a business does not have enough cash to be able to pay for its liabilities

Question 6

possible solutions to cash flow problems

Answer 6

improve inflows:
customers (debtors) to pay earlier
increase sales - marketing, product development
slow outflows:
reduce costs
lease rather than buying