A-Level AQA Business Revision Unit 1(Part 6) : Developing Business Plans

A business plan is of the utmost importance to a business. It helps them obtain a loan to get the business underway and keeps records of all transactions.

Business plan - A document designed to allow a business to plan for the future, allocate resources, identify key decisions and prepare for problems and opportunities.

An entrepenuer can get help or advice on a business plan from:

- Small business advisors/consultants - Accountants and bank managers

- Govermnent agencies - Internet websites

A business needs to be a living document (continously added to) because it can contain all details of sales, purchases or losses as the business can change. Records must be kept to insure correct procedures are taken if problems arise

The business plan covers the four factors of production:

- Land (where) - Labour (workforce)

- Capital (finance) - Enterprise (decisions)

The benefits of a business plan are:

- Lays out a direction that the business will follow

- Identifies possible financial problems and allows for steps to solve them

- Can be used to attract business investors (banks, business angels, venture capitalists)

- Can be used to measure the success of the business (targets met? Profit achieved?)

The drawbacks of a business plan are:

-Planning can lead to inflexibility ~

sticking to the plan instead of adapting

- Difficult to get the correct information and have realistic details