Unit 1 Topic 1.3.5. Must learn: the purpose of a business plan Should learn: the process of setting up a business step by step Could learn: the.

Unit 1 Topic 1.3.5

Must learn: the purpose of a business plan

Should learn: the process of setting up a business step by step

Could learn: the importance of minimising risk by doing a business plan

What does a business plan consist of?

A business plan is a detailed development plan for a business. It includes information about the company’s:

Location Ownership Products/services Resources Production methods Marketing Financial details It is usually completed on a 2-5 year basis

A business plan helps you to: Clarify your vision and decide whether or not to go

ahead with an idea.

Determine if your product and/or service has a sufficient market to support it and whether or not it will be profitable.

Estimate your start-up costs and how much you'll need to invest or finance.

Convince investors and lenders to fund your business.

Define your target market

Establish or revaluate your competitive position within the marketplace.

Define corporate objectives and programs to achieve those objectives.

Help your business make money from the start by developing effective operational strategies.

Understand the risks involved and anticipating potential problems so that you can solve them.

Set a value on a business for sale or for legal purposes.

Let’s watch some clips

http://www.youtube.com/watch?v=hbysbP7Q0aM

What happened when Santa didn’t write a business plan?

http://www.youtube.com/watch?v=bX1hDJBwoPc

In your groups decide on a company that you will start up.

Using the example, draw up a business plan and include a cash flow forecast.

Next week you will deliver a presentation to a very important panel (the bankers, who will decide whether or not to give you a loan).

You must be able to justify your business plan details, decisions and forecasts. You should dress appropriately.

The plan must include:

Section 1: The business idea and legal structure

Section 2: Resources, production and quality issues

Section 3: Marketing

Section 4: Financial resources

Guidance notes Your business plan should be explicit Think about the type of ownership Be able to justify the contents and

financial forecasts Consider your PR strategy Be confident, speak clearly and don’t

waffle! Be realistic!

State 3 elements of a business plan?

Name 2 advantages of having a business plan?

State 2 reasons why a business plan may be inaccurate?

Who might be interested in seeing a business plan?

How does a business plan minimise risk?