CONTENTS OF A BUSINESS PLAN AND HOW THEY ASSIST

• Business plan is a document containing the business objectives and important details about the operations, finance and owners of the new business.
• By completing a business plan, banks are able to agree to a loan or overdraft to help finance the new business. The entrepreneur is forced to think ahead and plan the first few years.
• They will have to consider: What products or services do I intend to provide and which consumers am I targeting? What will my main costs and will enough products be sold to pay for them? Where will the firm be located? What machinery and how many people will be required in the business?
• The content of a business plan usually include the following: DESCRIPTION OF THE BUSINESS, PRODUCT AND SERVICES, THE MARKET, BUSINESS LOCATION AND HOW PRODUCTS WILL REACH CUSTOMERS, ORGANISATION STRUCTURE AND MANAGEMENT, FINANCIAL INFORMATION, BUSINESS STRATEGY.
• Without this detailed business plan, the bank will be reluctant to lend money to the business. This is because new owners of the new business cannot show that they have thought seriously about the future. Even with a detailed business plan, the bank might not offer a loan if the bank manager believes that the plan is not well executed or completed. E.g. Poorly forecasted cash flow)