What Is A Business Plan? A business plan is a written description of your business's future. That's all there is to it -a document that describes what you plan to do and how you plan to do it.

Why bother with a business plan? Reasons may include: giving businesses a clear picture of the various stages they need to go through in order to be successful; setting goals and objectives for the business, in both the short and long term; ensuring the monitoring and reviewing of progress is made more straightforward; persuading other stakeholders to, for example, finance a business, both as it is starting up and then as it is growing.

What Do I Have To Do? You will need to understand: why businesses create business plans, the different parts of a business plan the constraints that can affect the successful implementation of a business plan.

Areas Covered AO1 – Why do business create plans, what information do they contain and what are the constraints that can impact on a successful implementation. AO2 – Targeting your plan AO3 – Analysis of primary and secondary research AO4 – Critical evaluation of your plan

AO1 There are 9 marks available for this section: “You demonstrate a clear and comprehensive understanding of: the reasons behind creating a business plan, the different parts of a business plan the constraints that can impact on the successful implementation of a business plan;” To get high marks in this section, your evidence must display both breadth and depth.

AO2 There are 14 marks available in this section: “You target your business plan to the specific needs of your new enterprise.”

AO3 There are 12 marks available in this section: “Your analysis and interpretation of your data is thorough and comprehensive and there is an extensive focus on targeting your research and analysis into the development of your business plan; your synthesis of material is comprehensive, with frequent demonstration of integrated and strategic thinking;”

AO4 There are 15 marks available “Your critical evaluation of how, and in what ways, constraints may impact on the successful implementation of your business plan is comprehensive and in-depth and your research and analysis, resulting in reasoned, appropriate, logical conclusions; you demonstrate clarity, coherence and fluency with effective and confident use of appropriate business terminology.”

Information Within the Plan Business plans are usually divided up into 5 key sections: Preliminary information Marketing plan Production plan Financial plan Human resources plan

Marketing Plan Businesses need to make informed judgements about the likely sales-levels of products and services. You will need to know and understand how businesses analyse the market in which they operate.

Marketing Plan You will need to understand: The use of primary data in market research; The use of secondary data in market research; Factors affecting the demand for a particular product or service; Methods of identifying and analysing competition; Use of marketing models: – SWOT (Strengths, Weaknesses, Opportunities and Threats); – PEST (Political, Economical, Social and Technological) ; – Ansoff matrix; – product life-cycle; – Boston matrix

Within the marketing plan you need to discuss the following: Primary research Secondary research

Primary Research Field (usually looked at secondly) Important because you know its up to date, It meets the needs of your business Generally five kinds of primary research Observation Experimentation Surveys Questionnaires Focus groups

Needs to be qualitative and quantitative Qualitative is about how people behave Quantitative concerned with facts and figures.

Do you drink coffee?YesNo How often do you drink coffee per day? How much would you pay for a cup of coffee £0.50- £0.99 £ £1.49 £1.50-£1.99 Strongly Agree AgreeNeitherDisagreeStrongly Disagree Do you prefer organic coffee? Is price important? Quantitative questions Example of Likert Scaling

Secondary Research Also known as desk research Explain that you might refer to this first Where might you get some of this information? Government statistics – dti, ons, statistics Market research companies – Mintel, Mori, CIM Consumers’ associations – Which, Trading Standards, national Consumer Council Newspapers – Times, Telegraph, Economist, Trade magazines National and international agencies – World bank, International Trade Centre and International Labour organizations Competitors information – websites, catalogues, loyalty card

Secondary Data Legislative changes Population changes Costs of distribution Industrial developments Spending habits Effectiveness of promotions

Factors affecting the demand for a product or service Quality of the good or service – niche market, or mass produced lower end of market i.e. hand made wedding dress or off the peg Product range and its image, i.e. clothing and or accessories, Apple, Jack Wills etc Essential or Luxury. Is it a special occasion or linked to other festivals or special occasions (bread, xmas trees) Lifestyle of customers. Related to sport, healthy living, hobbies or interests, commonwealth inspired people to do more sport

Income of potential customers – more disposable income we have the more we buy! After sales purchase – guarantees and warranties Level of availability- online, high street Level and type of competition – what makes a customer come to you rather than your competitors

SWOT Analysis, remember its only as good as the info you put in it. SW – inside the business, OT outside PEST – explain how these will affect your business Ansoff’s Matrix Product Life cycle Boston Matrix

Boston matrix

Ansoff’s Matrix

Product Life cycle