2.1.4 Planning

Question 1

What is a business plan?

Answer 1

Sets out aims and objectives and how a business will achieve them

Question 2

Strength of business plan

Answer 2

helps access sources of finance so bank can confidently see how you’ll repay

Question 3

What will a business plan provide?

Answer 3

-a plan with goals
-a roadmap for development
-flag ups of potential problems in the future

Question 4

What is a cash flow forecast?

Answer 4

Receipts of cash inflows and cash outflows over a future period of time

Question 5

Whats included in a cash flow forecast

Answer 5

Cash inflow
Cash outflow
Net cash flow
Opening balance
Closing balance

Question 6

What is the formula for the opening balance?

Answer 6

The previous closing balance

Question 7

What is the formula for closing the balance?

Answer 7

Opening balance + net cash flow

Question 8

What is the formula for net cash flow?

Answer 8

cash inflow- cash outflow

250-300= (50)

Question 9

What is the use for a cash flow forecast?

Answer 9

-To control and monitor cash flow

Question 10

What are the advantages of using a cash flow forecast?

Answer 10

-Risk management
-Financial planning (when bus may need to borrow money)
-Helps with decision-making

Question 11

What are the disadvantages of using a cash flow forecast?

Answer 11

Uncertainty as it is based on estimates
-Changes in the economy could affect