Business Planning

• business plan:

  -a detailed statement of how the business intends to operate, either at start-up or during a given period of time

  -business plans are based on forecasts and so cover only a short time
• a business plan includes:

  -the business idea (product/service)

  -business aims + objectives

  -target market (through market research)

  -revenue forecast

  -projected costs and profit

  -cash flow forecast

  -sources of finance

  -location

  -marketing mix (4 p's)
• what are the 4 p's? (marketing)

  -product

  -price

  -place

  -promotion
• if a business plan is correct, it should:

  minimise risk of business failure
• market research:

  collecting information about the customers' needs, wants and preferences that will help the business to make design, production and marketing decisions
• two types of market research:

  -primary

  -secondary
• primary research:

  collecting information first-hand direct from the public; field research including surveys, questionnaires and testing designed specifically for the market/product
• secondary research:

  examining information from published sources; desk research using information that has been collected for other purposes
• cash flow forecast:

  a financial planning tool that estimates the money coming into and going out of the business on a month-by-month basis; it allows the business to predict times when additional finance may be needed to maintain liquidity
• whats the advantages of a cash flow forecast:

  -make changes to budgets

  -make changes to payments

  -increase receipts
• business plan uses:

  -raise finance from banks

  -show to potential investors

  -applying for loans/mortgages