A Business Plan is a formal statement of a largely enforced business goal and the plan for reaching those goals. It may also contain background information about the organisation or team attempting to reach those goals.
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There are a number of reasons for compiling a Business Plan:
To Map the Future
To Support Growth and Secure Funding
To Minimise risk of failure
To Develop and Communicate a Course of Action
To Help Manage Cash flow
To Support a Strategic Exit
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Cash-flow forecasts and business plans
The Cash Flow Forecast involves the account preparation, for example, the company accounts for the use of internal management, or for the use of a bank that evaluates your business. As the Balance Sheet and the Profit and Loss Accounts are prepared for the end of year accounting figures, the Cash Flow Forecast shows, on the other hand, the prospective sales figures and expenses.
The Business plan shows the planned activities, either of a small company or a large organisation, that are converted into results. With regards to a good business plan, we can distinguish two types:
The Basic Business Plan. Here should be outlined briefly the main points, such as: Title of the Company, its Mission Statement, Values/Beliefs, Background/Context, Strategy, Objectives, Resources, Feasibility and Risk, Plan Summary, Ownership etc.
The Special business plan. The executive-level business plans usually includes extra financial data in order to predict any potential profits and losses. The scope of any incurred costs may refer to e.g. production, research and development, warehousing, transport, distribution and so forth.