Business - Unit 1: Business Activity - 1.2

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  • 1.2 - Business planning
    • Business plans
      • Often written before the business is set up and updated as changes occur
      • Aims to reduce risk by analysing competitor activity and and creating financial forecasts
      • Aims to increase chances of success by focusing ideas. However, it can never guarantee success
    • What is in a business plan?
      • People - details who will run the business and their experience
        • Helps them find an investment from banks
      • Market research - determines whether customers want their product.
        • Details price, advertising methods, distribution methods and product design
      • Finance - calculate the cost of setting up a business and where finance will come from
      • Objectives - SMART objectives that can be measured and track progress
      • Target market - have a clear idea on who they will sell to in order to focus ideas
      • Competitors - how the product is unique
    • The role of a business plan
      • Finance, resources and aims/objective
      • Without a business plan, there is greater risk as the ideas are not fully thought through
        • Banks are less likely to invest, lack of well-judged objectives, unclear TM


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