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Assess the likely value of a business plan to Tended Ltd. - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Question 1
Assess the likely value of a business plan to Tended Ltd.
Worked Solution & Example Answer:Assess the likely value of a business plan to Tended Ltd. - Edexcel - A-Level Business - Question 1 - 2022 - Paper 2
Step 1
Value of a business plan:
Answer
A business plan provides a structured outline of the company's objectives, strategies, and expected financial performance. It is instrumental in helping Tended Ltd assess the scale of risk it faces as a startup in the competitive wearable technology market.
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Risk Assessment: By detailing financial forecasts and market analysis, a business plan helps investors gauge the risks associated with lending money. Given Tended Ltd's rapid expansion, a well-constructed plan could increase the likelihood of securing funding from banks or loans like the £50,000 from Enterprise Loans.
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Opportunity Identification: A comprehensive plan allows Tended Ltd to identify and evaluate possible challenges and opportunities within the dynamic market for wearable technology. This evaluation is crucial for strategic decision-making.
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Cost Consideration: Preparing a business plan requires investment in time and resources, which may present a significant opportunity cost. However, this should be weighed against the potential benefits of attracting investment.
Step 2
Potential Counterbalance:
Answer
While a business plan can be beneficial, there are counterpoints to consider:
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Resource Intensive: Developing a thorough business plan may siphon valuable time and financial resources away from product development or other urgent needs.
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Founder Experience: Leo Scott Smith's relative youth and experience may affect the quality of the business plan, as Tended Ltd operates in a rapidly evolving market where adaptability is crucial.
Step 3
Final Judgement:
Answer
In conclusion, while Tended Ltd would greatly benefit from a structured business plan to navigate the complexities of the wearable technology market, the current constraints imposed by the dynamic nature of the industry, as well as the founder's experience, might influence the effectiveness of the business plan. Thus, it is crucial for Tended Ltd to balance these aspects to enhance its investment appeal.