Business plan Lecture Review

We heard people say “If you fail to plan, you plan to fail. “, so to start a business that is really important to have business plan. In this essay I will enclosed the important information which should enclose in business plan. Basic information of business In business plan, we should clearly show the basic information of business, for example; Name of the business . Nature of the business ( what type of goods or services is the business trading). Type of the business ( what is business format, we should show the legal requirement, advantage and disadvantage of the business format)

Aim and Objectives We need to set the aim and objectives for the business, for example most of businesses aim is surviving and making profit. [ Making profit is an important aim of most businesses, because if they fail to make profit they will not be able to do many of the other things that a good business should do] (P. 7, Business 2004, Rob Dransfield, Heinemann). Objectives which can support the aim, we can use SMART technique: Specific, Measurable, Achievable, Relevant, Time related. Specific They must set out exactly what the firm is trying to do Measurable

It must be possible to measure whether the objective Achievable/ agreed There is no point simply telling someone that they have to achieve something. The other person has to be involved in setting the objective so that they fell part of the process. They must agree it is appropriate target Relevant/ Realistic The target has to be achievable. If you set an objective which is not attainable people will be less likely to work toward it because they know it is not realistic Time related. It is important to specific how people have to complete the objective rather than leave it open ended

(P. 26,AS Business 2005, M Surridge and A Gillespie, Hodder and Stoughton) By agreeing objectives with other members of the organization, managers can ensure that everyone is working towards the same overall goal. Without clear objectives, people will tend to do their own thing. Objectives can also be very motivating for employees because they set out exactly what the firm wants them to achieve. If you are set a good target, you know precisely what you have to do. (P. 29,AS Business 2005, M Surridge and A Gillespie, Hodder and Stoughton)

Information on the market and competitors A new business entry the market, we need to do analysis. SWOT analysis is a review of Strengths, Weaknesses, opportunities and Threats for an organization. Strengths and Weaknesses are internal- they factors relating to the product, or to the firm itself. In contrast, opportunities and threats are external- they relate to factors in the market, or to what the competition is doing. (P38, Business 2004, Rob Dransfield, Heinemann) Example: Strengths Well known brand name, distribution network, employees Weaknesses

Lack of new products, high costs, high level of borrowing Opportunities New markets due to economic or political, new technology Threats Economic change, new competitors, change in legislation The purpose of SWOT analyses is to identify the existing position of the firm and to flag up possible future external changes in its environment. This is an important part of the planning process. A firm will seek to build on its strengths and protect itself against its weaknesses. It will also aim to exploit market opportunities whilst trying to reduce the impact of any threats.

By undertaking a SWOT analysis, a firm examines the nature of its market in depth. This is a very valuable exercise because it forces managers to think about the present situation of the firm and what might happen I the future. (P37-39 AS Business 2005, M Surridge and A Gillespie, Hodder & Stoughton) Breakeven point To set the objective relative to surviving or making profit, we need to know he break even point of the business. The formula of break-even analysis: Break-even sales= fixed cost / contribution.

Contribution= Sales price Рvariable cost variable cost= costs go directly into making or sales of the products e. g. sales wages or cost of clothes *Fixed cost= the costs of running the business, regardless of how many goods we sales, e. g. electricity bill, rent of the shops etc. (P16-17 Business 2004, Rob Dransfield, Heinemann) Marketing plan Even the best product, sold in the appropriate places at the right price, may experience poor sales if promotional support is ineffective. In many markets where competition is intense, high levels of promotional support are sometimes necessary if a product is to succeed.