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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 is essential for Tended Ltd as it details how the company intends to develop over time. It provides a forecast of cash flows and profits, helping the business to assess the scale of risk involved in their operations. For a startup like Tended Ltd, the risks may be considerable, hence a detailed business plan could significantly impact their chances of acquiring financing, such as the £50,000 loan from Enterprise Loans.
Additionally, the business plan can help Tended Ltd identify and evaluate the risks within the highly competitive wearable technology market. By outlining factors that may influence their success or failure, the company can develop strategies to mitigate these risks.
Step 2
Potential counterbalance
Answer
However, creating a business plan may incur significant opportunity costs. The process requires time and resources that might otherwise be dedicated to product development or market strategies. Moreover, Leo Scott Smith, being a young entrepreneur, may not possess sufficient knowledge or experience to construct an accurate business plan for Tended Ltd, especially in a rapidly changing market environment.
Step 3
Potential judgment
Answer
In conclusion, a business plan could be invaluable for Tended Ltd in securing investment and navigating market challenges. Nevertheless, the time and expertise required to establish a comprehensive plan must be balanced against immediate business needs, particularly given the company's current expansion phase.