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Explain the guidance available for pre-business and how a business plan is useful.

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Introduction

Transfer-Encoding: chunked ´╗┐There are many components that need to be included in a business plan. These include, your details such as name and address; the businesses name address, legal ownership and principal activity. It should also include the businesses objectives; their short term objectives, which tend to be to survive and get a secure customer base. Medium term which would be to grow as a business and perhaps open other branches. And lastly long term which would be to run the business ethically. Additionally, it should state the products and services offered. For instance, what are they selling, their unique selling point, who is going to supply them and what their stock levels should be. ...read more.

Middle

And they need to identify if the market is static, declining, growing or seasonal as this can have a major impact on their performance. They also need to plan their financial state. They will need to plan their start up. This includes their cash flow forecast, breakeven point and actual amount of other costs. And they will need to plan their growth, this will be their gross profit margin, other existing financial commitments like loans and predicted capital expenditure. They will also need to plan key personnel. They will need the names of each person, the needed qualifications and experience and their roles to the business. They should also include previous employment like the name of the previous business, how long they worked there and lasting what their role was. ...read more.

Conclusion

Also variable costs such as raw materials are vital; a business need to plan these costs so that they can get the best price. And they will need to think about having a backup plan if a supplier cannot supply them. Lastly, they will use these costs to determine the selling price of their products. A financial plan will also have pricing. A business will need to do research to see how much their competitors are selling similar products for. This is because they don?t want to overprice their products and they don?t want to set it to low as its going to limit the profits made. It will also have mark up. This is a tool used by businesses to work out their pricing. There is fixed percentage profit mark-up; this enables a business to determine their selling price, this is very important for businesses to you. ...read more.

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