A business plan sets out how a business is going to achieve
its aims and objectives.
It is extremely useful for a new business to use a plan
because it can be used to show potential investors how their
money is going to be spent.
A business plan will probably contain the following elements:
Statement of aims and objectives
Description of market the business is selling to
Main competitors (how will they respond to a new
Production and sales forecasts
Distribution plan for how to get product to customers
In the plan, great care should be taken to estimate and
forecast how the cash will come into and leave the business
in the early weeks and months.
This is because in the early days of setting up a business,
finance is hardest to manage. It is uncertain how easy it will
be to find customers – and will they buy the product or
service at the price that is being asked?
The business will be incurring significant “start-up costs”
which will eat into the available funds.