Business Plan

Question 1

Business plan

Answer 1

Is a written description of a business’s
aims, strategies, target markets and financial forecasts.

Question 2

Reasons to prepare a business plan

Answer 2

● Sets targets to be achieved to help focus the
business
● Identifies problems in advance so solutions can be
found
● It is a required document when applying for a
business loan
● Useful tool to review performance (compare plan to
actual performance)

Question 3

Swot analysis

Answer 3

Before preparing a Business Plan it is important to prepare a SWOT Analysis
SWOT Analysis: identifies the Strengths, Weaknesses, Opportunities and Threats facing the business.
● Strength: things that the business does well (internal)
● Weakness: things that the business does badly (internal)
● Opportunity: things the business could take advantage of infuture (external)

Question 4

Business plan layout

Answer 4

A Business Plan has the following headings:
1. Title: Business Plan for “Business Name”
2. Background of the Business
3. The Business Team
4. Market and Marketing
5. Production
6. Costings and Finance
7. Structure of the Business
8. Signed and Dated

Question 5

Details

Answer 5

Title: Business Plan for [insert business name]
1. Background of the Business
● Aims and objectives of the business - what it is set up to do
● Name and Address of Business
2. The Business Team
● The people involved in the business (education & work experience)

Question 6

Details

Answer 6

t and Marketing
● Description of target market
● The current and potential size of market (no. of people)
● Current competitors in the market
● Marketing Mix (Product, Place, Price, Promotion)
4. Production
● List of premises and equipment the business owns
● Production process (job, batch or mass production)

Question 7

Details

Answer 7

5. Costing and Finance
   ● How much it costs to produce item
   ● Details of loans the business has
   ● Amount of finance (loan) needed
   ● How will finance (loan) be repaid
   ● Cashflow Forecast
6. Structure of Business
   ● Type of Business (Sole Trader, Private Limited Company,
   Partnership)

Question 8

Smart goals

Answer 8

Specific
Measurable
Agreed
Realistic
Timed

Question 9

Terms of business ownership

Answer 9

1. Sole Trader:
   ● is a person who owns, manages and provides the money (capital) for the
   business with the aim of making a profit.
   ● Examples of Sole Trader: Hairdresser, Plumber, Farmer
   Unlimited Liability
   ● This means that a sole trader could lose everything
   ● They are personally responsible for all the bills and loans in the business
   ● This is a major Financial Risk

Question 10

Forms of business ownership

Answer 10

2. Private Limited Company (LTD):
   ● a business owned by between 1 and 149 shareholders. If only one shareholder, must
   have two directors.
   ● The company is separate from its owners.
   ● The company makes contracts and sues and can be sued, NOT the individual
   shareholders.
   ● Limited Liability: This means that the shareholders will only lose what has been
   invested in the business. They are NOT personally responsible for the bills and
   loans in the business. This is a smaller financial risk