Component one - Business Plans - Advantages and disadvantages table in A Level and IB Business

Created by: imconnie
Created on: 21-06-16 18:16


	Component one - Business Plans
	Advantages Avoid Big Mistakes - developing a business plan can help you to evaluate the potential to see if the product/service will be successful Counterbalance Emotions - When things become manic, a business plan lets you sit back and take an objective look at what you are doing and why Common Goals - Helps everyone to know what they are doing and go in the same direction Game Plan - Know what you need to do and how youre going to do it To Raise Capital - communicates vision in a clear way so investors know what they are paying for	Disadvantages Banks are still unwilling to lend money after the recession (2008) so a business plan does not guarantee success They can be very time consuming an expensive so if exploiting a specific gap in the market, the opportunity could be lost The business could be too busy to use effectively so it could go overlooked Forecasts are only predictions so it cannot be guaranteed that they are reliable could make the business too rigid
	Evaluation In conclusion, business plans are very important because they act like a map to help a business get to where they need to go and can increase the likelihood of raising capital as investors can clearly see what they are paying for as well as the fact that the entrepreneur is determined. However it depends on how much time the entrepreneur is willing to devote to making one since they can be very time consuming and the nature of the business as if exploiting a gap in the market, spending time on a business plan could cost the opportunity.

Component one - Business Plans

Advantages

Avoid Big Mistakes - developing a business plan can help you to evaluate the potential to see if the product/service will be successful
Counterbalance Emotions - When things become manic, a business plan lets you sit back and take an objective look at what you are doing and why
Common Goals - Helps everyone to know what they are doing and go in the same direction
Game Plan - Know what you need to do and how youre going to do it
To Raise Capital - communicates vision in a clear way so investors know what they are paying for

Disadvantages

Banks are still unwilling to lend money after the recession (2008) so a business plan does not guarantee success
They can be very time consuming an expensive so if exploiting a specific gap in the market, the opportunity could be lost
The business could be too busy to use effectively so it could go overlooked
Forecasts are only predictions so it cannot be guaranteed that they are reliable
could make the business too rigid

Evaluation

In conclusion, business plans are very important because they act like a map to help a business get to where they need to go and can increase the likelihood of raising capital as investors can clearly see what they are paying for as well as the fact that the entrepreneur is determined. However it depends on how much time the entrepreneur is willing to devote to making one since they can be very time consuming and the nature of the business as if exploiting a gap in the market, spending time on a business plan could cost the opportunity.

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Component one - Business Plans