Business plan

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Business plan

AdvantagesGetting Started

  • SAS ltd need £3m . To convince bank or potential new investor to inject finance into the business. This is important to show a business plan with careful cash flow projections, particularly how the finance will be spent
  • Business plan would force SAS ltd to carry out extensive market research , part of a marketing plan. This involves researching competitors and potential customers. Helps to ensure that Sheena's service meets customers needs however sold at competitive prices.
  • SAS ltd to conduct a profit forecast for the first year of trading, to see if it is actually worth starting up. They need to see if the proposed investment is financially viable due to the £3m. And make a profit, market research and estimating potential sales are useful towards what the revenue may be. They don't want to pay out the high set up costs for the helicopter until they're certain that the business is profitable .
  • Cash flow is vital especially involving an expensive project. Sheena has no business experience, she would need to ensure that the business has sufficient cash to survive . Business plan would involve a financial plan with cash flow forecast where SAS ltd can see when action needs to be taken such as arranging an overdraft.

Disadvantages

  • Business plan for business venture alone will not show full picture as even if the project makes losses in the early years, the project may help SAS to become established in a growing profitable market. This market is very competitive, so could take time to become established.
  • Success for any business depends upon a variety of factors, not just a business plan.SAS ltd must ensure she has a quality product ( as the market is very competitive), good distribution networks and a competitive price.

Evaluation

Raising the funding for the new business may depend upon an accurate business plan, so it would be advisable if SAS ltd can ensure the figure are as accurate as possible and reflect the current price level they would expect.

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