• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Explain the importance of business planning to the survival and growth of organisations

Extracts from this document...


Explain the importance of business planning to the survival and growth of organisations. A business plan should always for a business start up, the use of the business plan should not stop there, and businesses should be planning constantly in order to run their business effectively and efficiently. Businesses have to think about how they are going to plan for survival or growth, therefore they need to do business planning, to help the business survive and to grow. Business planning means the stages the business would need to build up the business. Business planning is a written document which is used by various many types of people such as financial advisors such as banks, etc, it shows that the business has taken the time and discipline to think about where the business is and where the business wants to go. This is called a Business Plan. Business planning is essentially about taking a more in depth approach to thinking strategically about the future of the business whilst taking the businesses present situation into account, when planning Businesses think about two basic goals, it would be the description of the over view of the business idea and provide financial data, to show that the business is making good money for future developments, this record can be used in future to show financial institutions for example: if the business needs money for a new project in order to grow the business and goes to a bank for some ...read more.


* A cash flow projection: Even if your profit-and-loss forecast tells you that your business will have higher revenues than expenses, in other words, that it will be profitable - those numbers won't tell you if you'll have enough cash on hand from month to month to pay your rent or buy more inventory. A cash-flow projection shows how much money you'll have -- or how much you'll be short -- each month. This lets you know if you'll need a credit line or other arrangement to cover periodic shortfalls. For example when the business wants to grow and survive they will first look at there financial calculations to see where the business is in terms of finance and then they will decide and then make other calculations to see how much money will be needed for the new project or it could help them to develop better services if finances were not enough, and then this will help them eventually grow. By using calculations it will help the business in summery to see whether the business is to grow or survive and most importantly if the business will be profitable to invest in the business. In summery business planning helps significantly and contributes massively to help the business to survive and grow as it helps the business to: * Focus businesses attention on longer-term business goals and direction * Identify any areas on internal strengths and weaknesses * Identify possible threats and constraints on the business ...read more.


It will essentially help to see whither the company has break even. The two financial forecasts that need to be prepared, the profit and loss and cash flow forecasts, These 2 documents help the business significantly and help the business to make decisions in order to grow and to survive. If the business needs to borrow money, and as a result will have a debt to service, the Profit and Loss forecast will show whether the business can afford to do this. If, as with the majority of start-ups, the business will run at a loss for a period of time, the P&L forecast will also indicate how long this is likely to be (based upon achieving the stated sales expectations) and at what point in its development the business will breakeven. Having drawn this up, if a P&L forecast shows that the new business is not likely to breakeven until month 20, Then at least the business will be in informed of there position and will judge the risk of committing the business life's savings to the venture. Having prepared a business plan, which includes customer and market research, a sales forecast, a promotional strategy, a breakeven analysis and budgets and financial forecasts, there should then be indications as to how viable the business will be, and the likely returns on any investment made. ?? ?? ?? ?? BTEC National Diploma In Business Studies Unit 1: Introduction To Business Page Number:2 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays


    person has invested; they also keep their customer update on what going on and what's new to offer them. 14 Management styles and culture 14.1 The management style is the pattern of behaviour that he or she shows in carry out a management role over a period of time the

  2. Business Aims and Objectives.

    virus protection, back up against loss, confidentiality) * External communications (e.g. email, market research, use of the internet for marketing and sales) * Online support for customers (e.g. order progress, new products, sales, response to queries) * Electronic transactions (e.g. bare code systems, sales, stock control, orders, invoices, electronic funds transfer)

  1. The business I am going to set up is a snooker club,

    Stock turnover- Stock x 365 Cost of sales Debtor collection days Debtors x 365 Sales revenue (turnover) Shareholder ratios Dividend per share (pence) Total dividends Total share issues Dividend yield Dividend per share x 100 Market price per share I have calculated the following ratios in my project: Liquidity: �

  2. Discuss the Importance of Intrapreneurship to Business Development & Growth Firms

    Recently, the definition develops into more specific statements, such as stated by King, 'An intrapreneur is a person within a large corporation who takes direct responsibility for turning an idea into a profitable, finished product through assertive risk taking and innovation.'5 Normally, entrepreneurship is particularly applied in small firms.

  1. In this coursework I need to produce a detailed business report on one medium-sized ...

    However, for information that relates to work undertaken by the subordinate, the communication channel should be from superior to immediate subordinate. Upward information flows An upward information flow along a vertical information channel is from a subordinate to a superior.

  2. Business Idea

    Also in addition to this they will want to see the company grow. Employees will care about the business, because if they didn't and the business failed they will be out of a job, also they might be interested if there were certain bonuses for selling different products.

  1. Apple Incorporation - Case Analysis

    Product innovations and technological changes Microprocessors, semiconductors, memory storage, and speeds of computers is ever changing and as the technology improves so must Apple. Many product innovations are being driven in the areas of miniaturization. Companies are spending millions of dollars to provide themselves a position in being the one to make the next innovative improvement.

  2. business plan and organise event

    is going to happen throughout the week of the event, I will also explain what I did to make sure that the event I have organised will be a success. I will go through each day and explain what will happen at a particular time and who responsibility it is.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work