1.2 Business Planning Flashcards

All 14 cards in this deck

Give one thing a business plan sets out, other than the business idea, its finances and its marketing.

Any one of: who the owners and key staff are and what experience they bring; how the product will be made or the service delivered, including the equipment needed; how many staff are needed and what they will cost.

Give one drawback or problem of producing a business plan.

Any one of: it takes time to write; it is based on predictions that may be wrong; market conditions may change after it is written.

True or false? A business plan guarantees that a start-up will succeed.

False. It reduces risk by making the entrepreneur plan ahead, but it is only a forecast and may be wrong.

How does including a cash-flow forecast in a business plan help minimise risk?

It identifies potential cash problems in advance, so the business can plan for them.

What is a business plan?

A document setting out the business idea and how it will be run, including aims, target market, finances, location and marketing mix.

Name four things a business plan identifies.

Any four of: the business idea; aims and objectives; target market (market research); forecast revenue, cost and profit; cash-flow forecast; sources of finance; location; marketing mix.

How does a business plan help a business obtain finance?

A bank can review the figures and judge whether the business will be able to repay a loan.

What are the two main purposes of planning business activity?

Reducing risk and helping the business to succeed.

List the four main uses of a business plan.

Identifying markets, helping to obtain finance, identifying the resources needed to operate, and achieving aims and objectives.

How does a business plan help identify resources?

It sets out the resources the business needs to operate, e.g. staff, equipment and premises.

How does a business plan help a business achieve its aims and objectives?

It sets out clear goals, so the owner can monitor progress against them and measure success.

In a business plan, what does 'identifying markets' mean?

Setting out which customers and markets the business will sell to, and what it will produce for them.

When is a business plan usually written?

Before a business starts, or when an existing business plans a major change, such as expanding.

Why should a business plan include information about competitors?

To show how the business will compete with rivals already in the market, e.g. how its product will be different from theirs.