1.4.4 - Business plans

What is a business plan

a document by the owner at start up, which provides forecasts of several aspects

What items does the forecast have?

the business’ idea, aims and objectives, target market, revenues, cost, and profit forecast, cash flow forecast, sources of finance, location, planned marketing mix

Describe the business idea

a concept that can be used for financial gain, usually a product or a service, the idea can fix a gap in the market or can be new

Describe the business aims and objective

Allows the business to establish their aims and objective to reac h its goal, it allows any investors to see what they want to achieve

Describe the target market aspect

it encourages the owner to research the potential customers and identify the target market, helps identify whether the business if for a niche or mass target

Describe the cash flow forecast

Will help the business to see where the cash inflows and outflows will be and to identify an months where there may be a shortfall and how they plan to finance it

Describe the sources of finance

Can help the business to obtain finance, as lenders are going to want to see numbers that say the business will grow and they can make a profit. The better the financial information the more confident they will be in investing

describe to identify a location

Should outline the current location of the company and the facilities’ it owns,

Describe to be able to identify the marketing mix

The business plan should include details of the business’ marketing mix, including the pricing strategy, the products/services the company will see, how the business will promote itself and how it intends to distribute to consumers.

Why is a business plan helpful (finance)

it can help obtain finance as it gives possible lenders the ability to make an informed decision on whether the business is credible and worth the financial risk

Why is a business plan important (overall)

allows the business to be well-informed about potential problems and chance of success along with selecting the most