1.2 - Business Plans

• What is the purpose of a business plan?

  makes clear the objectives of a business and how the business intends to achieve these objectives.

  *start up businesses that follow a business plan are more likely to survive than those that don't
• What are the main components of a business plan?

  1. overview -> provides an overview of the business' aims, objectives and strategy
  2. marketing plan -> market research is carried out
  3. operations plans -> includes details of where the business will be located, production methods and any equipment needed
  4. HR plan -> includes number of employees, skills, experience and qualifications needed
  5. financial plan -> sales forecast indicating potential revenues, cash flow forecast and profit and loss balance sheet for the first 12 months and a break even analysis
• Two sources of advice available to start up businesses

  
  

  -Princes Trust -> work with 18-30 year olds to turn big ideas into business reality through their enterprise programme + offer training and mentoring support.

  -Commercial banks -> offer a dedicated service to small businesses and offer advice on how to construct a business plan and gain financial approval-
• 4 benefits of a business plan

  -presents owner with a clear set of instructions on how to run the business

  -allows the owner to check progress

  -monitor cash flow

  -can clearly see when things are going wrong
• 5 drawbacks of a business plan

  -cost time/money

  -hard to prepare plan for first time owners

  -usually an educated guess on sales revenue

  -may give false hope-> leading to failed investments

  -does not guarantee success -> waste of time??