Business Plans (Edexcel GCSE Business)

• A business plan is a document produced by the owner at start-up, which provides forecasts of items such as:
  
  • The business idea (sub-topic 1.1.1)
  • The business aims and objectives (sub-topic 1.3.1)
  • The target market (sub-topic 1.2.2)
  • The forecast revenues, costs and profits (sub-topic 1.3.2)
  • The cash-flow forecast (sub-topic 1.3.5)
  • The sources of finance (sub-topic 1.3.6)
  • The business location (sub-topic 1.4.2)
  • The planned marketing mix (sub-topic 1.4.3)
     
• The main aim of producing a business plan is to reduce the risk associated with starting a new business and help the owners to raise finance
  • Producing a business plan forces the owner to think about every aspect of the business before they start which should reduce the risk of failure  

Elements of a business plan

• Having carried out research to support the plan, the business will be well-informed about the potential problems and chance of success and can select the most appropriate source of finance based on this information 

• A well-written business plan can help a business to obtain finance
  • Lenders (e.g. banks) and other investors will be able to explore the plan and make an informed decision about whether the business is credible and worth the financial risk
  • Investors (e.g. venture capitalists) will use the business plan to explore whether there is an opportunity to increase the value of their investment and make a worthwhile profit
  • The business, having carried out research to support the plan, will be well-informed about the potential problems and chance of success and can select the most appropriate source of finance based on this information
     

• A clear action plan provides direction for the business and helps lenders and investors to have confidence in the future success of the business 
• Most high street banks can provide a detailed template for business owners to complete when applying for finance.