Unit 8: Business Planning, Questions And Answers

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Unit 8

Business Planning

Coursework Guide

Ross Bateman

Unit 8 – Business Planning

You need to produce a business plan for a business proposal, which:
A. Explains the activities of the business proposal, its aims and objectives, form of ownership and key personnel required. (A01)
B. Develops the marketing, operations and financial plans, explaining how these achieve the aims and objectives of the business proposal. (A02)
C. Analyses key research findings of the following to quantify and develop an integrated business plan: marketing, operations and financial plans. (AO3)
D. Evaluates the viability of the business plan in order to support a case for funds, based on an assessment of: relevant financial ratios; pay-back periods;
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This means to cover all the costs involved in the start up of the business with money flowing in and stop making a loss within 8 months. An objective to break-even is essential to have in any business, and the sooner it’s performed, the better, this is why I believe this objective is smart. Furthermore, the objective is very measurable as it’s easy to measure whether the business is making a loss or a profit every month with a cash flow forecast. I believe this objective to be very achievable. The tutoring business has a lot of initial start-up costs and these can be covered with the inflows coming in over time from tutoring fees. This objective is very relevant as every business wants to break even and eventually make profits over time, and finally the objective was set within 8 months which I know is very ambitious but I want the business to grow quick and the time period specified I believe to be more than achievable.

To achieve a positive cash flow within 12
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Private Limited Companies are usually larger businesses and raise money by privately issuing shares. Private limited companies (when compared to sole traders) have much higher start-up costs and higher administration costs.

Setting up as a private limited company could be advantageous because there is protection available from creditors. If the business were to fail, I would not be responsible for any debts collected by the business. Furthermore, finance can be easily raised through the issuing of shares. However, when shares are issued by a business, control is issued along with those shares. You are selling the business, and are always in danger of selling majority control away to somebody else.

Furthermore, when shares are sold to raise finance of a business, as well as control being sold, splits of the profits are sold. If 40% of the business is allocated away in shares, finance would be raised - but 40% of the profits coming into the business would need to be split between the shareholders of the business.

Possibility D -

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