Business Plans
Aims: To be aware of Business Plans, their purpose and contents. To broaden your awareness of real business opportunities.
What is a business plan?
Why do you need a business plan? Basic business planning is essential: To set the objectives for the business To ensure the business can be viable To raise finance (if required) from third parties
Who would look at the business plan? Suppliers Owner(s) Which stakeholders would be interested? Bank Creditors
What is in a Business Plan?
Log onto this website… http://www.bplans.co.uk/Sample_Business_Plans/all_plans.cfm This website link has a range of completed business plans for you to look at. Select a business plan and complete the following questions: Underscores used here!
Your task…. General Questions What is the name of business on the business plan? What product/services do they intend to offer? What are the company objectives? What are their ‘key’ to success points? What type of ownership do they propose to start under? What is the market segmentation that they have identified? Have they identified their competitive edge issues? What are the total requirements for the start up costs? What are the personnel costs/wages What do they expect their monthly breakeven revenue and units? What is the projected annual NET profit for Year 1, 2 and 3?
Plenary What are company objectives? What is market segmentation? What were the start up costs for your business plan? What were their break-even sales value – how realistic is this for the business?
The exam board expect you to know the content of a business plan! Business Plan Content The Marketing Plan Market analysis showing level of demand Who customers are and what they want The strengths and the weaknesses of competitors The marketing mix – product, price, place and promotion. The Production Plan The methods and stages of production The premises and equipment needed Ways of ensuring quality The Financial Plan Sources of finance required Profit forecast/break-even analysis Cash flow forecast. Introduction Basic business details The type of legal ownership The goals of the business The Business Idea The product/service to be provided Summary of the key selling points Management and Personnel The roles of the managers The experience and skills of the workforce. Print this as 1 slide for notes The exam board expect you to know the content of a business plan!
Benefits of a Business Plan Provides focus and direction Tests the viability of the business proposal through financial forecasts Convinces investors or lenders Plans and review business strategy So what a business plan helps provide focus & direction? Know what needs to be done, where, how, how much…..SO WHAT? Not to waste money, earn revenue = reach breakeven – profits……SO WHAT …. Get a good reputation, grow, expand! So what moment…. How to … analyse issues
Drawbacks of Business Plans So what moment…. How to … analyse issues Lack of flexibility Collecting accurate information Takes time and commitment Planner lacks skills or expertise to analyse results What if the business plan is based on inaccurate data Unrealistic financial projections Need to be flexible – to react to competitors, customer changing requirements, change in the economy….financial crisis! Must be able to adapt, react and change….so not to go bankrupt!
We’re going to plan this now… Essay Q To what extent does having a business plan prevent business failure for an entrepreneur? (15 marks, C = 3, An = 7, E = 5) We’re going to plan this now…
Sources of information & guidance Banks Accountants, solicitors, Insurance advisors Small Business Advice Service www.smallbusiness.co.uk Small business advisors Government agencies – Dept of Trade & Industry, Business Link, Her Majesty’s Revenue & Custom Chamber of Commerce Prince’s Trust – Charity support for 18-30’s to set up businesses Shell Live Wire – for 18-30’s to set up businesses
Further Questions…. List the key areas of a business plan – use the sub heading of non-financial items and financial items. (2 marks) Identify three different stakeholders that might be interested in the business plan. Explain why they might be interested. (9 marks, C = 3 An = 6) Where might an entrepreneur gather the information required for a business plans? (4 marks) Total 15 marks