Definition of a business plan?
- a document setting out the business idea
- showing how the business can be pu in to practice
- crucial part of an attempt to raise finance - from outside sources such as the bank
- increase chances of success
- may make the entrepreneur realise they lack the right skills so then they can employ an expert
- risks are lower
- if the plan is well recieved by investors they can obtain capital
- overfocus on a perfect plan means less time spent visiting suppliers or talking to customers
- business plan may be wrong
- problems occur if plan is to rigid: better to make it flexible, so that the business is prepared
- things are always changing so it wont be up to date
Why do we have a business plan?
- used by investment seeking entreprenuers to convey their vision to potential investers
- understand how to manage their businesses better
Internal uses of a Business Plan?
- provides a checklist to help run and control a business
- monitor progress & success
- improve performance - set high goals
Contents of a Business Plan?
- The business idea - where from? Is it good?
- the people running the business
- Market Research - competition?
- Marketing - who to? How?
- Finance - how much is required?
- Cash flow forecast
Other useful info on business plans:
Banks and Business Link (government funded) offer support and provide information for business plans.
- Business Plans are only as good as the info inside
- they are estimated and guessed so not to be treated as a factual document
- steers the business in generally the right direction