Business organisation and environment

Table of Contents

1. Topic pack - introduction
2. 1.1 Nature of business activity - notes
3. 1.1 Nature of business activity - questions
4. 1.2 Types of organisation - notes
5. 1.2 Types of organisation - questions
6. 1.3 Organisational objectives - notes
7. 1.3 Organisational objectives - questions
8. 1.4 Stakeholders - notes
9. 1.4 Stakeholders - questions
10. 1.5 External environment - notes
11. 1.5 External environment - questions
12. 1.5 External environment - simulations and activities
13. 1.6 Organisational planning tools - notes
    1. Organisational planning tools
    2. Business plan
    3. Decision-making processes - introduction
    4. Decision-making processes
    5. Decision-making - fishbone diagram
    6. Decision trees
    7. Decision trees - worked example
    8. SWOT analysis
14. 1.6 Growth and evolution - notes
15. 1.7 Growth and evolution - questions
16. 1.7 Growth and evolution - simulations and activities
17. 1.6 Change (HL only) - notes
18. 1.9 Globalisation - notes
19. 1.9 Globalisation - questions
20. Print View

Business plan

When starting a business, a business needs a business plan as it will almost certainly need a bank loan, and the first thing that the manager will want to see is the formal business plan.

The business plan sets out in logical order what a firm proposes to do, how it proposes to do it, how much it will cost, what it will bring in etc. It will contain forecast accounts and cash flow. It should be supported by research data where appropriate.

A business plan:

• States the owners' objectives and how they want to achieve these.
• Reminds all employees of the purpose of the business; where it is going, its mission and values and its key corporate objectives.
• Informs lenders and potential investors about the central aims of the business.
• Identifies the products and/or services it intends to sell and identifies any unique selling point.
• Lists key personnel with details of their experience and skills.
• Provides information on the markets in which the business will operate, including sales projections, target markets and identified competitors.
• Provides forecasts of expected profits and cash flow projections and examines the time period in which the business will break even and move into profit.
• Outlines a marketing mix, with pricing strategies, marketing and promotional plans and designated distribution channels, including location details.

The planning process:

The business plan in itself is not as important as the process behind its development. As the computer industry says - 'garbage in, garbage out'. In other words it is the accuracy of the research and the forecasts that is paramount, which is determined by the quality of the market analysis that takes place before the Business Plan is written.

It is also important that the Business Plan is kept current with periodic reviews of strategic and tactical objectives and the updating of key accounts and forecasts.