Business plans

• A business plan is an essential part of starting any business, providing details about each element of the business
• Entrepreneurs create business plans to consider all elements needed for their new business to succeed
• Sections of a business plan include:

  • Business idea
  • Aims and objectives
  • Target market
  • Revenue forecast
  • Projected costs and profit
  • Cash flow forecast
  • Sources of finance
  • Location
  • Marketing mix (product, price, place, promotion)
• Completing each section of the business plan helps an entrepreneur gain a full understanding of their business elements and assess the likelihood of success
• If there's a risk of business failure, the entrepreneur can amend the business plan to minimize this risk
• A business plan is an essential part of starting any business, allowing an entrepreneur to consider all elements needed for success
• Entrepreneurs create business plans to help them minimize the level of risk when setting up a business, crucial due to the high risk of business failure within the first year
• When creating a business plan, entrepreneurs must conduct market research to understand the market, potential customers, and where to locate the business
• Market research involves gathering data about customers, competitors, and market trends to help create aims and objectives for the business
• Two types of market research a business might undertake are primary and secondary research
• A cash flow forecast is a key document used to minimize risk in a business plan, predicting the money flowing in and out of a business over a period of time
• By completing a cash flow forecast, an entrepreneur can identify times when they may lose money and make changes to their budget and payments or increase receipts
• A business plan is essential when attempting to raise finance from a bank or potential business investors, providing evidence of the business's potential success
• Investors want to see a business plan to ensure they will not lose money and that the business has the potential to be a success