Business plans - spider diagram
- Created by: AmeliaCooper
- Created on: 09-06-18 19:39
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- BUSINESS PLANS
- REASONS TO GET A BUSINESS PLAN
- To get a loan from the bank
- To show potential investors
- To set out your aims and objectives, organise where your business is heading
- To monitor progress
- To reduce risk of failure
- To make sure an idea is properly planned and the costs are worked out
- SECTIONS OF A BUSINESS PLAN
- 1.Business ides
- What is the product/service?
- What is unique about it?
- Why will it be successful?
- 2.Management
- Who is in charge?
- Who else works for the business?
- What skills do they bring?
- 3.Marketing
- Who are the customers?
- What is the price range?
- Where is it sold?
- Where will it be promoted?
- 4. Finance
- Cash flow forecast
- Income statements (profit and loss account)
- Statement of financial postion (balance sheet)
- 1.Business ides
- PROBLEMS WITH A BUSINESS PLAN
- Actions of competitors
- Changing fashio - things come in and out of style
- Changing business environment
- Lack of money
- Lack of knowledge/experience
- SOURCES OF FINANCE
- Bank loan
- A sum of money which is payed back in monthly instalments with interest added. e.g borrow £10,000 and pay £12,000 back
- Friends and family
- You aren't pressured to pay it back, however it can break relationships if you can't pay it back in time or at all.
- Venture capitalists
- Rich people who invest in businesses in order to make money, they will usually than take a percentage of the business
- Sale of assets
- Selling assets of value to make a sum of money
- Renting/Leasing/Hiring
- If you rent then you don't have to pay the large amount of money you would if you bought it. You rent a kitchen, lease a machine and hire a car
- Owners funds
- Owners saving being put into the business to reduce costs
- Retained profit
- Profit the business has made being put back into the business
- Overdraft
- When the bank allows you to take out more money than you actually have, this has a high interest rate
- mortgage
- Money borrowed from the bank secured against a piece of property
- Made credit
- When a business buys goods in a month which are invoiced at the end of the month and have to be payed in the 30 days after
- Bank loan
- TYPES OF COSTS
- Running costs
- Wages, utility's, phone bill and mortgage
- Start off costs
- One off costs are costs you have to pay when you first set up a business. You pay these once. e.g property, machinery and technology
- Fixed costs
- Indirect costs that don't change no matter what. e.g rent and utility's
- Variable costs
- Direct costs , these are affected by the amount of goods you sell a month?year. e.g if a sandwich shop recieves a lot of customers who want lettuce on their sandwich one month then they would have to pay for more lettuce to but that month
- Running costs
- REASONS TO GET A BUSINESS PLAN
- Business plan - A detailed document which sets out how a business idea is going to be successful
- Revenue - Income generated by a business for selling goods or providing a service
- Cost - Anything a business has to pay for in order to start up or keep running
- Profit - Money made when revenue is greater than costs
- Variable costs + Fixed costs = Total costs
- Revenue = Quantity sold x price
- Revenue - Total costs = profit
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