1. What is a business plan?. . . . . . . . . . . . 251 2. Why is a business plan important? . . . . . . 252 3. How is a business plan prepared? . . . . . . 252 Chapter Review . . . . . . . . . . . . . . . . . 255
Case Study Chocolate Delight
Ben Murphy liked good food, especially chocolate, and decided to set up a business producing luxury handmade chocolates. To make this happen, he had to think through everything he would need to get started. For advice, he went to his Local Enterprise Office. They showed him how to prepare a business plan and think through all the practical aspects of the business. ‘It was really useful preparing the business plan,’ says Ben. ‘As an entrepreneur I am taking a risk but I don’t want to make a reckless decision. After all, I’m investing my own savings as equity and a huge amount of time into this idea. Anything that helps to reduce the risk is fine by me!’
1. What is a business plan? Anyone setting up a new business, or planning to expand an existing one, needs
to spend time preparing a good business plan. A bank won’t lend money to a new enterprise or an existing business without seeing a business plan. Not all businesses are successful. Businesses fail for many reasons including the following: bad timing, wrong target market, wrong price, bad advertising and bad public relations (PR). Many fail simply because they did not plan properly.
