The role and importance of a business plan

• What is a business plan?

  A document detailing elements of a business
• Why do entrepreneurs create business plans?

  To consider elements for business success
• What are the main sections of a business plan?

  • Business idea
  • Aims and objectives
  • Target market
  • Market research
  • Revenue forecast
  • Projected costs and profit
  • Cash flow forecast
  • Sources of finance
  • Location
  • Marketing mix
• What does the business idea section describe?

  What product or service the business provides
• What is the difference between business aims and objectives?

  Aims are overall goals; objectives are steps
• What does SMART stand for in business objectives?

  Specific, Measurable, Agreed, Realistic, Timed
• How is the target market determined?

  Through market research
• What is a revenue forecast?

  A prediction of future revenue
• What does projected costs and profit refer to?

  Estimated expenses and earnings of the business
• What is a cash flow forecast?

  A prediction of money flow in and out
• What are sources of finance in a business plan?

  Forms of money used by a business
• What does the marketing mix describe?

  Product, price, promotion, place
• How does completing a business plan help an entrepreneur?

  It provides understanding of business elements
• What can an entrepreneur do if a business plan indicates potential failure?

  Amend the business plan to minimize risk
• What is risk in a business context?

  Probability of an unwanted outcome
• What factors influence the probability of risk?

  Chance of occurrence and consequences
• What is the role of a calculated risk-taker in business?

  To set up a business for financial gain
• Why is market research important for a business?

  It gathers data about customers and competitors
• What is the definition of profit?

  Money made after all expenses are paid
• What are the two types of finance mentioned?

  Long-term and short-term finance
• Why is location important for a business?

  It affects customer access and sales
• What are the four Ps in the marketing mix?

  Product, price, place, promotion