Business and Finance

Section Title: A01 Task 2 FINANCE PLAN

This part is discussing the use and contents of the Finance Plan in a Business plan

1. Introduction

* Say that:

* Finance plan is the most important component part of a BP (why?)

* Requires a lot of consideration and research to ensure accuracy

* Finance plan will justify the viability of the business idea to the investors and give all staff a communal goal

2. The Right Source of Finance

* What are the possible start-up sources of finance for a small business?

* Loan

* Overdraft

* Venture capitalists

* Savings

* Government grant or loan

You need to explain each one and discuss simple pros/cons of each one

* What should an individual bear in mind when choosing finance?

* Ownership – what’s available to you, what’s not

* Short term vs. long term? What does the business need?

* The cost of the finance to the business (interest)

3. Budgets

* What is a budget?

* Why do businesses set budgets?

* What will the budget show?

* Expected sales

* Expected costs

* Can you find a sample budget and explain its layout/set up/the calculations it includes

4. Working Capital

* What is it?

* Why is it important?

* What affects working capital?

* Sales/trade credit arrangements/payment schedules

5. Calculating Break Even

* What does break even mean?

* When should start-up businesses aim to achieve break even?

* What is the formula?

* Margin of Safety

* What is it?

* How can it be helpful for a business?

* Break even charts – example one?

* Benefits of break even

6. Projected Profit/Loss accounts:

* What are they?

* What does it show?

* An example one?

7. Start-up balance sheets

* What will it show?...