Business Planning and the Business Plan
What this domain tests
The exam tests the purpose, parts and logic of a business plan, and whether you can link market assumptions to financial projections.
Core rules
- A business plan is a written roadmap for the venture; it guides action, supports loan or scheme applications and exposes risks.
- Common sections include executive summary, business description, market analysis, product or service, marketing and sales plan, operations, management and organisation, financial plan, funding request and appendices.
- Goals should be SMART: specific, measurable, achievable, relevant and time-bound.
- The financial plan includes projected income statement, cash-flow statement, balance sheet and break-even.
- Write the executive summary last, but place it first.
Worked example
A bakery plan claims 300 cakes a month. The market section shows 1,000 households, a 10% target and 30% repeat buying, giving 300. The financial section prices a cake at ₹400, variable cost ₹250 and fixed cost ₹30,000. Contribution is ₹150; break-even is 200 cakes. Reasoning: the sales claim is tied to evidence and the break-even shows the safety margin.
Traps
Do not write a plan with no numbers. Do not make projections without assumptions. Do not treat the plan as unchangeable. Do not confuse cash flow with profit.