2.1.4 planning

• what are the elements of a business plan

  . overview of the business

  . competitor analysis

  . type of finance used

  . financial forecasts e.g. cash flow + statement of comprehensive income

  . market analysis

  . objectives

  . product portfolio
• cash flow forecast advantages

  . helps financial decision making

  . identify potential shortfalls in cash and whether the business needs to aquire more finance

  . can increase investor confidence

  . makes sure they can pay suppliers and wages
• cash flow forecast negative

  . forecasts are often wrong

  . does not factor external shocks

  . some expenses may not be planned, e.g. machinery repairs

  . customers may not pay in time, delaying flows