Business Plans: Purpose, Structure & Key Components: 30 flashcards
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1. What is a business plan?
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A written document describing a business, how it will operate, and how it will make money.
2. What two roles does a business plan serve?
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It is both a thinking tool (making assumptions visible) and a communication tool (sharing the plan with others).
3. Name the seven core sections of a standard business plan.
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Executive summary, business description, market analysis, organisation and management, products/services, marketing and sales strategy, and financial plan.
4. Why is the executive summary written last?
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Because it summarises the entire plan — you cannot summarise a plan you have not yet thought through.
5. What should you start planning with — the problem or the product?
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The problem. Start with the pain or need that exists, then describe the solution.
6. How narrowly should you define the target customer?
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Narrowly enough that you could name a real person who fits the description.
7. What five elements does the financial plan typically contain?
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Revenue projection, cost structure, break-even analysis, cash-flow forecast, and funding request.
8. Why can a profitable business still fail?
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Because cash flow can be badly timed — revenue on paper does not pay salaries this month.
9. What is the difference between a business model and a business plan?
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A business model explains how value is created and captured (the logic); a business plan explains how that logic will be executed (the roadmap).
10. Which section do investors and lenders read first?
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The financials — they scan for return and risk.
11. Which section do partners often read first?
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The market analysis — they want to know who the customers are and who else serves them.
12. Why do different audiences need different versions of a plan?
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Because each reader scans for different things — an investor wants financials, an employee wants strategy and purpose, a partner wants market stability.
13. Why is a business plan called a living document?
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Because markets shift and costs change, so assumptions must be updated as real data arrives — it is not a one-time prediction.
14. What habit gives the most honest feedback on a plan?
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Reviewing projected versus actual results each quarter — the gap reveals the truth about your thinking.
15. Name five situations where a business plan is used.
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Bank loans, investment rounds, internal product pitches, grants, and franchise applications.
16. What five qualities define a strong plan?
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Specific, honest, concise, actionable, and living (regularly revised).
17. What is a common mistake new founders make about the plan?
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Treating it as a fixed prediction rather than a set of assumptions to test.
18. What is the other common failure mode in writing a plan?
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Writing for length rather than clarity — a tight ten-page plan beats a fifty-page one that avoids hard questions.
19. What does a break-even analysis answer?
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How many units or customers must be sold before the business starts making a profit.
20. What does a cash-flow forecast answer?
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When money actually arrives versus when it leaves the business.
21. What does a funding request answer?
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How much money is needed and what it will be used for.
22. What does the cost structure distinguish between?
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Fixed costs and variable costs.
23. What does the revenue projection answer?
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How much money comes in and from where.
24. What does the market analysis cover?
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Who the customers are, market size and trends, and who else serves them (competitors).
25. What does the organisation and management section cover?
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Who runs the business and how it is structured.
26. What does the marketing and sales strategy section cover?
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How customers will be reached and persuaded to buy.
27. What does the business description section cover?
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What the business is and what it offers.
28. What does the products or services section cover?
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What is actually being sold.
29. Why is the financial section described as the hardest part?
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Because it is where the plan stops being a story and becomes a test — the numbers must survive scrutiny.
30. What is the correct response when a plan's assumption fails?
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Revise the plan — do not defend it.
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