Document that outlines what a business plans to achieve, and how it plans to achieve it
What does a business plans include
Cash flow forecast- shows the expected income and expenditure of a business over the year (financial info)
Who is setting up the business- why
Location of business
Name of business
Product or service the market is aimed
Human resources- managers, owners etc
Why do businesses write business plans
To persuade lenders that the business will make enough profit to be able to pay back interest and loan capital on any finance taken out
Attract potential investors- shows how profitable the business expects to be and when
To give owners some direction - once a plan is written down it is more likely to be folllowed
How can business plan help business to obtain finance
Can help business to get cheaper long term finance- if cash flow forecasts show loan repayments can be made successfully and on time, business could get loan for lower interest rate
If business plan shows business will be highly profitable, investors may be happier to accept a smaller share of the business in return for their investment.
Purpose of business plan
To help set up new business
Help business raise finance
Help business set objectives
Help business set objectives
To outline how functions of the business will be organised
purpose- help set up new business
Business plan will help entrepreneur to decide what resources they need to start new busines. E.g.
