(1)Business plans

Business plan

Detailed document that outlines a business' development

• Should contain objectives, strategies, g&s to be sold, financial forecasts and resources required to achieve its goals

Key areas

• Business objectives and missions

• Market research

• operations plan (location, distribution, production)

• Human resources

• Financial forecast

• Sources of finance

• Risks and contigency (unexpected events) planning

Contingency

An event or situation that might occur, especially one that is planned for, such as an unforeseen circumstance or emergency.

Benefits of a business plan

• Reduce risk of failure

• Clear direction

• Attract investors: A comprehensive plan showcases viability and potential returns, essential for securing funding.

• Facilitate decision-making: Provides a framework for strategic choices, ensuring they align with overall objectives.

• Motivate and align stakeholders: Communicates vision and goals, fostering a shared understanding and commitment among team members and external partners.

• Identity future difficulties (cash flow, interest rates, etc)

Limitations of a business plan

• Static Nature: A business plan is a snapshot in time; it quickly becomes outdated in a dynamic business environment, limiting long-term relevance and requiring frequent revisions.
• Reliance on Assumptions: Plans rely on forecasts and assumptions about market, customers, and competition. Inaccurate assumptions can undermine the entire strategy.
• Time and Resource Intensive: Developing a comprehensive plan demands significant time and resources, potentially diverting focus from critical operational activities or execution.
• Potential for Over-optimism/Bias: Often created by proponents, plans can be overly optimistic, underestimating risks and inflating