Business plan

• What is the purpose of a business plan?

  To explain how a business will achieve objectives
• Who needs a business plan?

  All businesses, new or established
• Why is a business plan crucial for start-ups?

  It helps secure financial backing and shows capability
• What is the first step of the strategic plan?

  The business plan
• How does planning occur for established companies?

  It follows a strategic review of the firm
• What questions does a strategic review address?

  Current position, future goals, and methods
• Why should stakeholders be involved in a business plan?

  To align with their individual objectives
• What is strategic planning?

  Identifying long-term direction and objectives
• What are the benefits of a strategic review?

  Identifies performance issues and future options
• How does a strategic review impact long-term profitability?

  It likely improves profitability and stakeholder satisfaction
• What is tactical planning?

  Short-term planning by middle managers
• What are the advantages of having a business plan?

  Provides direction and evaluates performance
• What quantitative techniques are used in strategic planning?

  Forecasting, decision trees, network analysis
• What does a business plan require from the firm?

  A strategic review and performance evaluation
• How does a business plan encourage communication?

  By promoting coordination among departments
• What is an opportunity cost?

  The benefit lost from the next best alternative
• If an individual spends £50 on shoes, what is the opportunity cost?

  The benefit lost from not buying clothes
• If a firm spends on advertising instead of product development, what is the opportunity cost?

  The benefit lost from not developing products
• If the government spends on health instead of education, what is the opportunity cost?

  The benefit lost from not funding education
• What does scarcity mean in economics?

  Limited resources to meet unlimited wants
• What is the fundamental economic problem?

  Allocating scarce resources to maximize welfare
• How does scarcity affect consumer choices?

  It forces choices due to limited resources
• What is utility in economics?

  Satisfaction derived from goods and services
• What is the relationship between opportunity cost and consumer choices?

  Opportunity cost arises from making choices
• What happens if resources are scarce and incomes are limited?

  Choices must be made due to constraints
• What is the significance of a business plan for stakeholders?

  It aligns business objectives with stakeholder interests
• How can a business plan be disregarded?

  If not followed by responsible individuals
• What risk does a leaked business plan pose?

  Competitors gain knowledge to undermine the business