contents of a business plan gcse

Business Plans

Why do businesses create plans.

It is important for any new or existing business to create a plan in order to have an understanding of how it plans to achieve its aims and objectives. There are 4 key reasons why businesses create plans:

Important for new businesses

When Peter Jones and Theo Paphitis invested in Levi Roots Reggae Reggae Sauce, they asked to see Levi’s business plan before they committed to providing their expertise and investment.

Raising finance

To decide whether to give finance to a business, investors and banks need in-depth financial information.
When Facebook raised finance from venture capitalists to grow and when Snap Inc listed on the New York Stock Exchange they had to provide business plans.

Setting objectives

A plan lets a business clearly set out what the business’ objectives are and how they are going to go about achieving them.
These specific business objectives help firms to achieve their aims as they are measurable targets for the firm to work towards.
It also allows a business to see which areas (growth, sales, profits etc.) they need to improve and which they are doing well on. If they fail to meet an objective then it can be easier to understand why it was not met.

Business organisation

By detailing how functions of the business will be organised, a business plan can help improve the way that a business is run.
A local cafe can plan its purchasing, pricing and staffing in a business plan that can help it manage its operations.

The Main Parts of a Business Plan

There are lots of different ways to structure a business plan. However, some sections are very important and are almost always included.

Executive summary

The executive summary should be a concise overview of the entire business plan.

Mission statement

A mission statement says what a company wants to achieve.

Products or services

This section should clearly describe which products or services the company sells and why customers will benefit from this.
This also may include what a product’s unique selling point (USP) is. The USP of a product or service is how this product or service is different (or unique) from the products or services offered by the competition.

Market analysis

Analysis of competitors – Who the main competition are and where they are positioned in the market.
Analysis of customers – The different customer segments and which of these will be the ‘target market’.

Organisation and management team

This will outline the company’s organisation structure and provide personal details of the owners and other important personnel.

Production details

This will outline how a firm will produce its products or provide its services.
This includes things like the location of factories, who the suppliers will be, what materials will be needed and how much they will cost.

Cost and profit - This includes detailed outlines of the forecasts for cost, revenue and profit.
This section usually includes a cash-flow forecast and projected profit and loss account for the first 12 months of trading.
Sources of finance - This section often includes details of how a company will fund investment if it is required.

Advantages and Disadvantages of a Business Plan

There are advantages and disadvantages of creating business plans.

Business plans provide parameters for setting targets.
Management can check staffing, incomes, product ranges and lots of other things against previous business plans and expansion plans.
A business plan can be used as a benchmark against outcomes like cashflow, production outcomes or service delivery. The plan can also be compared to the behaviour of competitors and the business’ own performance in past years.

Disadvantages

Businesses need to be flexible and able to adapt to a changing environment. A business plan may stop a company changing.
Business plans can be costly and time consuming to make. If an entrepreneur has less time to spend designing a good product and selling to customers, then the time spent making a business plan may be negative for the business.
Also, forecasts of revenue and profit may be misleading and lead to bad decisions.

1 Enterprise & Entrepreneurship

1.1 The Dynamic Nature of Businesses

1.1.1 The Dynamic Nature of Businesses

1.1.2 Risk & Reward

1.1.3 The Role of Business Enterprise

1.1.4 The Role of Business Enterprise 2

1.1.5 The Role of the Entrepreneur

1.1.6 End of Topic Test - Dynamic Nature of Business

1.1.7 Grade 9 - Dynamic Nature of Business

1.2 Spotting a Business Opportunity

1.2.1 Customer Needs

1.2.2 Market Research

1.2.3 Market Segmentation

1.2.4 The Competitive Environment

1.2.5 Primary & Secondary Market Research

1.2.6 End of Topic Test - Business Opportunities

1.2.7 Application Questions - Business Opportunities

1.2.8 Exam-Style Questions - Market Segmentation

1.3 Putting a Business Idea into Practice

1.3.1 Business Aims

1.3.2 Business Objectives

1.3.3 Business Revenues & Costs

1.3.4 Costs - Calculations

1.3.5 Revenue - Calculations

1.3.6 Business Profits & Break-Even Analysis

1.3.7 Profits & Losses - Calculations

1.3.8 Interest - Calculations

1.3.9 Cash & Cash Flow

1.3.10 Cash & Cash Flow 2

1.3.11 Cash Flow - Calculations

1.3.12 Sources of Business Finance

1.3.13 End of Topic Test - Business in Practice

1.3.14 Grade 9 - Business in Practice

1.3.15 Exam-Style Questions - Business in Practice

1.4 Making the Business Effective

1.4.1 The Options for Start-Up & Small Businesses

1.4.2 Limited Liability

1.4.3 Franchising & Not-For-Profits

1.4.4 Business Location

1.4.5 The Marketing Mix

1.4.6 Business Plans

1.4.7 End of Topic Test - Effective Business

1.4.8 Application Questions - Effective Business

1.4.9 Exam-Style Questions - Business Plans

1.5 Business Stakeholders

1.5.1 Business Stakeholders

1.5.2 Technology & Business

1.5.3 Legislation & Business

1.5.4 Legislation & Business 2

1.5.5 The Economy & Business

1.5.6 External Influences

1.5.7 End of Topic Test - Business Stakeholders

1.5.8 Grade 9 - Business Stakeholders

2 Building a Business

2.1 Growing the Business

2.1.1 Business Growth

2.1.2 Finance

2.1.3 Changes in Business Aims & Globalisation

2.1.4 Ethics & Business

2.1.5 The Environment & Business

2.1.6 End of Topic Test - Growing a Business

2.1.7 Application Questions - Growing a Business

2.1.8 Exam-Style Questions - Business Growth

2.2 Making Marketing Decisions

2.2.1 Product

2.2.2 Product Life Cycle

2.2.3 Price

2.2.4 Pricing Methods

2.2.5 End of Topic Test - Product & Price

2.2.6 Grade 9 - Product & Price

2.2.7 Promotion & Advertising

2.2.8 PR & Sales Promotions

2.2.9 Sponsorship & Product Placement

2.2.10 Promotional Mix

2.2.11 End of Topic Test - Promotion

2.2.12 Application Questions - Promotion

2.2.13 Exam-Style Questions - Promotional Mix

2.2.14 Place & Wholesalers

2.2.15 Direct to Consumer

2.2.16 E-commerce & M-commerce

2.3 Making Operational Decisions

2.3.1 Job Production

2.3.2 Batch & Flow Production

2.3.3 Working with Suppliers

2.3.4 Effective Supply Chains

2.3.5 Just In Time & Just In Case

2.3.6 Managing Quality

2.3.7 Total Quality Management

2.3.8 The Sales Process

2.3.9 End of Topic Test - Operational Decisions

2.3.10 Grade 9 - Operational Decisions

2.3.11 Exam-Style Questions - Managing Stock

2.4 Making Financial Decisions

2.4.1 Gross Profit & Net Profit - Definitions

2.4.2 Gross Profit - Calculations

2.4.3 Net Profit - Calculations

2.4.4 Rate of Return

2.4.5 Rate of Return - Calculations

2.4.6 Research & Financial Data

2.4.7 Marketing Data

2.4.8 Percentage Change - Calculations

2.5 Making Human Resource Decisions

2.5.1 Organisational Structures

2.5.2 Organisational Structures 2

2.5.3 Recruitment

2.5.4 Effective Recruitment

2.5.5 Training a Workforce

2.5.6 Motivating a Workforce

2.5.7 End of Topic Tests - Human Resources

2.5.8 Application Questions - Human Resources

2.5.9 Exam-Style Questions - Human Resources

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The Marketing Mix

End of Topic Test - Effective Business

Business Plans

This section explains business Plans. A business plan is a written document that outlines a company’s goals, the strategy for achieving them, and the resources required. It serves as a roadmap for the business and is essential for guiding decisions and securing investment. A well-prepared business plan can be the difference between business success and failure.

The Role and Importance of a Business Plan

Definition: A business plan is a formal document that sets out the objectives, strategies, and financial forecasts for a business.

Why it matters:

Provides direction: A business plan gives clear goals and a framework for how the business will operate. It helps business owners stay focused on their objectives and identify the steps needed to reach them.

Organises ideas: Writing a business plan forces entrepreneurs to think through important aspects of their business, from operations to marketing strategies, finances, and management structure.

Improves decision-making: By reviewing the business plan regularly, businesses can track progress, adjust strategies, and make informed decisions based on set targets and objectives.

Attracts investors: Investors, such as banks or venture capitalists, often require a solid business plan before providing funding. A well-structured plan demonstrates professionalism and the potential for profitability, making it easier to secure investment.

Example: A start-up business might write a business plan to outline its market research, customer needs, pricing strategy, and expected revenue to attract investors or secure a loan.

The Purpose of Planning Business Activity

Definition: Planning business activity involves setting clear goals and developing strategies to achieve those goals, ensuring the business operates efficiently and effectively.

Goal setting: A business plan helps to define the short- and long-term objectives of the business. Setting clear goals ensures that everyone in the business understands what they are working towards.

Effective resource allocation: Planning ensures that resources (e.g., time, money, people) are used efficiently. For example, a business plan outlines how much money is needed to start the business and how it will be spent.

Strategic direction: A business plan provides a strategy for how the business will achieve its goals, whether it’s by targeting a specific customer segment, launching a new product, or expanding into new markets.

Coordination of activities: A plan coordinates the different aspects of the business, such as marketing, production, and finance. It helps ensure that activities across the business align with overall objectives.

Example: A business that plans to launch a new product line might outline the steps required in its business plan, including product development, marketing campaigns, and distribution strategies.

Minimising Risk

Definition: Risk management refers to identifying potential risks to the business and developing strategies to reduce or eliminate those risks.

Identifying potential risks: A business plan helps business owners consider the potential risks they may face, such as competition, changes in market trends, or financial challenges.

Contingency planning: A good business plan includes contingency plans for unexpected challenges. By considering risks in advance, businesses can plan for worst-case scenarios and take steps to mitigate potential negative impacts.

Reducing uncertainty: By researching the market and creating a detailed plan, business owners can reduce uncertainty about how the business will perform. The more thorough the planning, the less likely the business will face unexpected hurdles.

Financial risk management: A business plan includes financial forecasts and budgets, which can help ensure that the business doesn’t overextend itself and can handle any financial risks.

Example: A new restaurant might assess risks such as fluctuating food costs, competition, or changes in consumer preferences, and develop strategies such as securing fixed-price supplier contracts or creating a loyalty programme to build a steady customer base.

Obtaining Finance

Definition: Obtaining finance refers to securing the necessary funds to start and operate the business. This could come from personal savings, loans, investors, or other sources of funding.

Securing investment: A well-prepared business plan is essential for attracting investors or lenders. Banks and investors want to see detailed financial projections, a solid strategy, and evidence that the business has the potential to succeed.

Explaining the use of funds: The business plan outlines exactly how the capital will be used—whether it’s for purchasing equipment, marketing, hiring staff, or covering operational expenses. This shows investors or lenders that the funds will be used efficiently.

Financial projections: The business plan should include forecasts for income, expenses, and profit over a specific period, often the first 1–3 years. This helps demonstrate the potential return on investment and reassures lenders or investors that the business is viable.

Demonstrating financial control: A detailed financial section in the business plan shows potential funders that the business owner understands financial management, cash flow, and budgeting.

Example: A tech start-up might write a business plan to secure funding from venture capitalists, detailing how the funds will be used to develop their product, market it to customers, and expand their operations.

A business plan is a vital tool for any business, whether it’s a start-up or an established company looking to expand. It helps guide decision-making, attract investors, minimise risk, and ensure that business activities are well-organised and aligned with objectives. By setting clear goals, anticipating challenges, and securing finance, businesses can increase their chances of success and long-term sustainability.

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Starting a Business: Contents of a Startup Business Plan (GCSE)

Last updated 22 Mar 2021

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For a start-up there are usually two kinds of business plan - a simple one and a detailed one. Some businesses need to produce both.

The simple business plan is rarely shown to outsiders of the business. It is written by the entrepreneur, for the entrepreneur. The simple plan helps summarise the key aims and targets of the business and the actions required to make the business a reality. It is likely to be written in quite an informal way. What would go into the simple plan? Areas such as:

The idea - a simple description of the proposed business
Where the idea came from and why it is a good one
Key targets for the business - sales, profit, growth (gives a sense of direction for the business), ideally for the next 3-4 years
Finance required - how much from the founder, how much to be loaned over how loan and from who
Market overview - main segments, market size (value, quantity), growth, market shares of main competitors (if known)
How the business will operate (location, premises, staff, distribution methods)
Cash flow forecast (important) + trading forecast

A detailed business plan is needed if a more complicated or larger business is planned as a start-up, or if the entrepreneur needs to raise money from business angels or get a substantial loan from a bank. Here is a summary of the key content:

Executive summary: a brief 1-2 page summary of the detail! Should contain nothing new, but highlight the key points

Market: a profile of the target market based on market research

Product: what it is and how it is different from the competition (the "unique selling point")

Competition: an honest description of the competition in the target market - what they do well, their weaknesses and their likely response

Protecting the idea: how the product and business can be protected from competition - e.g. patents, trademarks, distinctive approaches to marketing or distribution that competitors will find hard to replicate

Management team: a crucial area for any investor. Who is involved in the start-up and what will they be doing? What experience and expertise do they bring? Which management roles will need to be filled as the business grows?

Marketing: the key elements of the marketing mix should be explained here. Remember that for a start-up the marketing budget is likely to limited, so the plan should describe a credible approach to promoting the product and include realistic assumptions about how many customers will buy and at what price

Production /operations: this explains what is involved in the production process, what capacity is needed, who will supply the business, where it will be located etc.

Financial projections : a summary of the cash flow and trading forecasts. This section should highlight the key assumptions that have been made and also outline the main risks and opportunities in the forecasts (i.e. what might go wrong, or where things might prove better than forecast).

Sources of finance: here the figures from the cash flow forecast are taken and used to highlight what funding the business needs, and when.

Returns on investment: another key area for any investor. This is a description of how the entrepreneur expects investors to get a return on their investment. Who might eventually buy the business, when, and for how much?