Business plans - spider diagram

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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)
    • 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
    • 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
  • 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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