Business plan Flashcards
1
Q
Purpose of business planning (8)
A
- Provides a focus on business idea
- Test the financial viability
- Encourages the entrepreneur to set appropriate objectives
- It allows the target market to be identified through market research
- Essential for raising finance
- Allows to outline the marketing mix
- Helps to be more organised
- Provides something that can be used to measure actual performance
2
Q
Information that needs to be included (8)
A
- Idea
- Objectives and key targets
- Finance required
- Market overview
- How the business will operate
- Marketing
- Cash-flow forecast
- Forecast revenue, costs and profits
3
Q
Idea -
A
- simple description of the proposed business; where the idea came from and why it is good one
4
Q
Objectives and key targets -
A
Sales, profit, growth - ideally for the next 3-4 years; this will give the business a sense of direction
5
Q
Finance required -
A
- how much from the owners, how much to be loaned over how long and from whom
6
Q
Market overview -
A
- results of marker research, main segments, market size (value/volume), growth, market shares of main competitors
7
Q
How the business will operate:
A
Location, staff, distribution methods
8
Q
Marketing -
A
- details of the target market and the marketing mix
9
Q
Cash-flow forecast -
A
- very important to ensure the business does not run out of cash
10
Q
Forecast revenue, costs and profit -
A
Show if the business is viable
11
Q
Advantages of business plan (5)
A
- Review ideas
- Reduce risk
- Review business progress against the plan and make any changes if required
- Secure finance
- Conducting and including market research will reduce risk of business failure
12
Q
Disadvantages of business plan (4)
A
- Poor quality, due to lack of research and a general lack of experience of the authors; sales might be overestimated
- Needs to be constantly updated
- Requires time and effort which might be expensive
- Can cause new opportunities to be missed, if they are not in the plan
