Why is a business plan important when raising finance?

Banks and investors want to see that the business is likely to succeed. A plan shows how their money will be used and repaid.

What are the main sections of a business plan?

A business plan includes the business idea and objectives, and a marketing plan. The plan also includes financial forecasts and details of staffing and operations.

What are the benefits of business planning?

A plan sets clear objectives and helps the owner organise each function. A plan also reduces risk and makes it easier to get finance.

What are the drawbacks of business planning?

Writing a plan takes time and may rely on guesswork. A plan can quickly become out of date if the market changes.

AQA GCSE Business 8132

Business in the Real World

Topic overview What a business is and why people start one Goods, services, needs, wants and factors of production Business sectors, entrepreneurs and a changing business environment Sole traders, partnerships, limited companies and not-for-profit organisations Business aims and objectives Why business objectives differ and change Stakeholders and their influence on businesses Factors affecting business location Business planning and basic financial terms Expanding a business and economies of scale

Influences on Business

Topic overview E-commerce and digital communication Ethics, the environment and sustainability Interest rates, employment and consumer spending Globalisation and exchange rates Employment, health and safety and consumer law Competition, risk and uncertainty

Business Operations

Topic overview Job, flow and lean production Managing stock: just in time and just in case Suppliers, procurement, logistics and supply chains Quality control, quality assurance and TQM Customer service and the sales process

Human Resources

Topic overview Organisational structures, span of control and delegation Recruitment, selection and contracts of employment Financial and non-financial methods of motivation Induction, on-the-job and off-the-job training

Marketing

Topic overview Identifying and satisfying customer needs Market segmentation Purpose of market research and primary and secondary research Market research methods and interpreting findings Pricing methods and factors affecting price New products, USP, brand image and the Boston Matrix Product life cycle and extension strategies Promotional methods and the promotional mix Channels of distribution, e-commerce and m-commerce The integrated marketing mix

Finance

Topic overview Sources of finance Cash flow and cash flow forecasts Financial calculations and average rate of return Break-even charts and margin of safety Income statements and statements of financial position Profit margins and judging financial performance

Business in the Real World

Business planning and basic financial terms

3 things to know
Both papers

Overview

What a business plan contains and why lenders want one, the benefits and drawbacks of planning, revenue, fixed, variable and total costs, and working out profit and loss.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

What is a business plan, and why do new businesses write one?

Key term

What is a business plan?

Key term

Why do new businesses create a business plan?

Questions from this subtopic

Each one with the model answer underneath.

1
What is a business plan?
Model answer
A business plan is a document setting out a business's objectives and how it will achieve them. A business plan covers marketing, finance and operations.
2
Why do new businesses create a business plan?
Model answer
A business plan helps the owner think through the idea and spot problems before starting. A plan is also usually needed to raise finance.
3
Why is a business plan important when raising finance?
Model answer
Banks and investors want to see that the business is likely to succeed. A plan shows how their money will be used and repaid.
4
What are the main sections of a business plan?
Model answer
A business plan includes the business idea and objectives, and a marketing plan. The plan also includes financial forecasts and details of staffing and operations.
5
What are the benefits of business planning?
Model answer
A plan sets clear objectives and helps the owner organise each function. A plan also reduces risk and makes it easier to get finance.
6
What are the drawbacks of business planning?
Model answer
Writing a plan takes time and may rely on guesswork. A plan can quickly become out of date if the market changes.

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Business in the Real World

Influences on Business

Business Operations

Human Resources

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The pays a fee and a share of revenue.

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