Business plan

• What is a business plan?

  A formal written document that explains in detail how a business is going to achieve its objectives.
• Why are business plans important for a start-up business?

  They help the entrepreneur know what they are doing and assess the potential of the business.
• What might happen if a start-up business does not have a business plan?

  It may be impossible to obtain financial backing without a business plan.
• Why are business plans important for established businesses?


  They enable logical development following a strategic review, improving or sustaining business performance.
• What is one benefit of conducting a strategic review?


  Analysis of the key performance indicators from all functional areas can be identified.
• How does a SWOT analysis contribute to a strategic review?


  It provides a better understanding of the current situation.
• What does a strategic review enable among senior managers?


  It enables a consensus on where the business is headed and what needs to be done.
• What are the main contents of a business plan?

  • Company name, address, and contact details
  • Executive summary
  • Business description (idea/history/current position)
  • Management and personnel
  • Products and services (description)
  • The market (sector positioning, target customers, market research)
  • Sales and Marketing (strategy, sales methods)
  • Operations (premises, production facilities, suppliers, distribution, equipment, training)
  • Finance (financial analysis, assumptions for P&L, cash flow)
  • Risk analysis (potential issues and solutions)
• What is included in the executive summary of a business plan?


  A summary of the whole plan.
• What does the 'Products and services' section of a business plan describe?


  It describes the products and services offered by the business.
• What information is provided in the 'Market' section of a business plan?


  It includes market sector positioning, target customers, and market research.
• What does the 'Sales and Marketing' section of a business plan cover?


  It covers the marketing strategy and sales methods.
• What is included in the 'Operations' section of a business plan?


  It includes premises, production facilities, suppliers, distribution, equipment, and training requirements.
• What does the 'Finance' section of a business plan analyze?


  It analyzes financial data and assumptions used to produce profit and loss accounts and cash flow.
• What is the purpose of the 'Risk analysis' section in a business plan?


  It identifies what could go wrong and how to overcome it.
• What is one advantage of a business plan?


  It gives a business a sense of direction.
• How does a business plan encourage communication within a firm?


  It encourages communication, co-ordination, and co-operation between different departments and stakeholders.
• What is the role of a business plan in evaluating functional areas of a business?


  A business plan requires a strategic review of the firm, analyzing how well each functional area is performing.
• What is meant by opportunity cost?


  Opportunity cost is the cost of the next best alternative foregone.
• What is a disadvantage of producing a business plan?


  It takes a lot of time to do, leading to opportunity cost.
• Why is a business plan important for shareholders?


  It can lead to greater dividends and a possible rise in share price.
• How does a business plan benefit employees?


  Employees may have more job security, possibly pay rises, and improved conditions of work/service.
• What advantage does a business plan provide to suppliers?


  Suppliers will be in a more secure position as it may lead to regular or larger orders.
• How can a business plan impact the local community?


  It may lead to more funds available for the community and job creation.
• Why is a business plan important for investors?


  It ensures that interest on loans can be repaid on time.
• What concerns might customers have regarding a business plan?


  Customers may be concerned about improvements in the product and fair pricing, as well as ethical issues in production.
• Which of the following is NOT an advantage of a business plan?


  It guarantees profit.