The Business Plan
Would a bank lend to someone with no plan? A business plan sets out the idea, the customers, the money and the risks in advance. Learn what it contains and why it matters.
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The plan 📋
Would a bank lend money to someone with no idea how their business will work? Probably not. A **business plan** is a document that sets out the whole business in advance. This module is about what a business plan contains and why it matters.
Words to know 🔑
Four ideas run through a business plan:
What is it for? 🎯
What is the main purpose of a business plan?
- To plan the business and help reduce the risk of failing
- To guarantee the business will make money
- To decide the staff holiday dates
- To avoid paying any tax
Plan or no plan? ⚖️
Starting a business without a plan is risky. Compare the two.
What goes where? 🔗
- The business idea
- The target market
- Sources of finance
- The cash-flow forecast
- What the business will sell or do
- Who the customers will be
- Where the money will come from
- The money coming in and going out
Why write one? 💡
A business plan has two big purposes. First, it MINIMISES RISK: thinking everything through in advance helps spot problems before they cost money. Second, it helps the business OBTAIN FINANCE, because a bank or investor wants to see a solid plan before lending.
Parts of a plan ✅
Which THREE are parts of a business plan?
- The business idea
- Financial forecasts
- The target market
- A list of jokes to tell
- The colour of the office walls
Forecast the profit 🔢
An interactive activity.
Write the plan 🪜
An interactive activity.
Complete the idea 🧩
A business _____ sets out the whole business in advance. It names the target _____ the business will sell to, and forecasts the revenue, costs and cash _____. It has two purposes: to reduce the _____ of failing, and to help the business obtain _____.
True or not? 🖍️
An interactive activity.
Why the bank asks 🔎
Why does a bank want to see a business plan before lending money?
- To check the business idea is credible and likely to work
- To read it just for fun
- To copy the idea for itself
- To delay the loan for no reason
Which part helps? 🧭
An interactive activity.
Plan it ✍️
An interactive activity.