The purpose of planning business activity

• What is the purpose of a business plan?

  To help entrepreneurs consider business elements
• Why do entrepreneurs create business plans?

  To minimize risk and ensure success
• What does a business plan help to minimize?

  Risk of business failure
• What is a calculated risk-taker?

  An entrepreneur seeking financial gain
• What is risk in a business context?

  Probability of an unwanted outcome
• Why is it important to minimize risk when starting a business?

  High risk of failure exists in the first year
• What must an entrepreneur consider when creating a business plan?

  All key elements and potential issues
• What is market research?

  Gathering data about customers and competitors
• What does market research help entrepreneurs understand?

  The market and potential customers
• What are business aims?

  Overall targets or goals of the business
• How do business objectives differ from business aims?

  Objectives are steps to meet overall aims
• What are the two types of market research?

  Primary and secondary research
• What is a cash flow forecast?

  Prediction of money flowing in and out
• Why is a cash flow forecast important for entrepreneurs?

  It shows potential times of financial loss
• What is a budget in a business context?

  Plan for expected income and spending
• What are receipts in a business?

  Money flowing into a business
• Why is a business plan essential for raising finance?

  It provides evidence of business potential
• What do investors want to see in a business plan?

  Potential for business success
• What is the primary purpose of an investor?

  To make more money