business plan

• business plan - statement made by a business which outlines the objectives of the business and how to achieve it
• How a business plan is used

  • Make sure the firm develops a healthy financial structure
  • Identify problems
  • Set target and check firm developments
  • provide realistic expectations to achieve
  • Specific ,achievable, time-based and measurable objectives
• Why make a business plan - Financial institutions (Banks) will not lend money to businesses that have not set out all of their plans as the consequences that could rise could make the investment risky
• What a business plan needs to include:

  • Executive summary - synopsis of plan (set aims + objectives)
  • The market - size , share , competitors
  • Marketing strategy - research customer needs and how the business will try to achieve it
  • What makes your business different from the rest
  • Skills of entrepreneur and other employees
  • Financial forecast
  • Estimate of cost , revenues and profit
  • Sales estimate
• Advantages of business plan

  • Sets clear instructions on how to run business
  • check progress and take action if objectives not achieved
  • See where its going wrong
  • Monitor cash flow
• Disadvantages of business plan

  • Market research costs money and time , those resources could be spent on other areas of business
  • Cannot predict the income
  • No business plan means investors will be unlikely to invest into the business
  • Inaccurate business plan with unachievable objectives can mislead entrepreneurs and lead to failed investment
  • Most new business will not have market research and take educated guess which can be a weakness of the business plan