Business Plan

1. What are the advantages and disadvantages of a business plan? (4-6)

An advantage of a business plan is that it can reduce the risks as you would be able to anticipate any problems. If problems are identified in advance, businesses would be better able to deal with them, reducing the risks. Another advantage of a business plan is that it can provide guidance and targets. This is useful because by having a sense of direction, everyone involved in the business knows what they are supposed to be doing.

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A disadvantage of a business plan is that possible incorrect market research may lead to the business plan becoming useless and unsuccessful. Market research may become incorrect when market conditions change (e.g. a new competitor). Another disadvantage of a business plan is that it takes time to produce and therefore, can be expensive. For a business plan to be worth producing, entrepreneurs would need to spend a lot of time and resources looking into and examining the target market. This time could have been used to advertise or even sell the business’s products.

2. Compare the advantages and ...

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