- 42 pages of business revision notes of high quality
- Complete syllabus cover for unit 2
- Well structured and very easy to read
- This is the only thing I used to get an A in Unit 2
Business plan: A formal report detailing the marketing strategy, production costing and
financial implications of a business.
Why produce a business plan?
Reduce chance of making mistakes
Have a clear objective to look forward to, which encourages motivation
May prevent cash flow problems
To persuade a bank to offer a loan
To persuade new investors to invest in the business
To ensure that the financial projections of the future are achievable and realistic
Determines whether your business will make a profit
Provides an estimate of your start-up costs
Competitive advantage
Measures your business performance
Who are your customers?
Are they other businesses? B2B
Are they individual consumers? B2C
Are they the wider public?
Where are they based?
Business Plan format (What do I include?)
Type of business
Your details (experience and entrepreneurial mindset)
Competition
Business aims and objectives
The product or service
The target markets
Personnel
Marketing (market research too)
Customers
Resources available
Finance details – cash flow forecast, sales forecast, sources of finance used, break-
even analysis.
Separate objectives into short-term and long-term goals.
2
,Questions the plan should answer?
What is the business idea or opportunity?
What is the product and how is it different or unique?
What is the target market segment and who are the potential competitors?
How large is the target market and is it growing?
Who are the customers; how much will they buy and at what price?
How much will it cost to produce and sell the product?
At what stage will the business break-even and what are the likely profits?
What investment is required to launch and establish the business?
Where will the money come from and what type of finance is required?
What are the main risks facing the business and how to handle them?
Who is the supplier?
Where will you promote your products?
How will you differentiate your product?
Advantages and disadvantages of having a business plan
Advantages Disadvantages
Increases chance of success Making a forecast doesn´t mean it will happen
May make the entrepreneur realise that he lacks Problems arise if the plan is too rigid, better make
the skills needed for making part of the plan, it more flexible so that they are prepared if things
therefore try harder to employ an expert don´t go as planned.
If plan is well received by investors, this may raise
Business success is often about people not paper
more capital
TYPES OF BUSINESSES
Sole Traders:
3
, This is the smallest type of business in the UK
A sole trader:
Is owned and controlled by one person
May nor require a lot of money to set-up
Is the easiest type of business to set-up
Is unincorporated:
This means that legally the owner and the business are the same
Has unlimited liability
E.g. hair dressers, small shops, ice cream vans.
Unlimited liability: If a business has unlimited liability then the owner is responsible for ALL
debts, these debts have to be paid even if the business hasn´t got the money so they may have
to sell their own assets to raise money.
Limited liability: Owners or shareholders can only lose the money they have put in to the
business. E.g. if you have put 1,000$ then that if the mostly you will lose. Also, you do not have
to pay off the debts using their own money so their own possessions are not at risk.
ADVANTAGES DISADVANTAGES
Unlimited liability (can lose more than he put
They are easy to set up
into the business)
They are usually small so little money is needed Money may be difficult to obtain
The owner makes all the decisions Costs are usually higher
The owner can keep all the profits Prices are usually higher
Accounts can be kept private Holidays may be difficult to take
Can respond to customer needs quickly Illness can close the business
Owners may have to work long hours
4
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