Business plans

• • business plan-
  • 
a detailed document setting out the marketing and financial thinking behind a proposed new business
• • a business plan has-

  1. the business idea
  2. business aims and objectives
  3. target market
  4. marketing plan
  5. forecast revenue, cost, profit
  6. cash flow forecast
  7. sources of finance
  8. location
  9. marketing mix
• 1. the business idea - what the business will offer from a customer perspective
• 2. business aims and objectives - what the business is aiming to achieve
• 3. target market - what type of customer the business is targeting, supported by market research
• 4. marketing plan - overview of the approach the firm will take to marketing
• 5. forecast revenue, costs, & profit - shows the break even point and margin of safety
• • 6. cash flow forecast - importance for cash flow management at time of start up
• • 7. source of finance - amount of finance required and the nature of the finance
• • 8. location - sorting out right location and details
• 9. marketing mix - 4Ps outlined to show how marketing plan will be enacted
• • benefits of a business plan -
  • forces entrepreneur to think about every aspect of business , which increases chance of success
  • may make the entrepreneur realise that they lack skills needed for part of plan so they need to try harder
  • if plan is well received by investors, they will compete to offer attractive terms for obtaining capital
  • business plan on paper means someone else can keep it going if the original dies
• • purpose of planning business activity-
  • obtaining finance
  • minimising risk
• • minimising risk -
  • so you can see everything before hand smooth out any problems
• • obtain finance 
-
  • get investors attracted to finance it