Resort Maps : Business Venture - Case Study Example

A business plan is fundamental to all businesses irrespective of the industry. One of the benefits of having a business plan is that it acts as a guide for the business activities. It gives an outline of activities to be undertaken in order for the business to achieve its goals and objectives. The business plan also enables the business and its owners to understand themselves, their strengths and weaknesses and determine how to strengthen themselves ahead of their threats and opportunities. A business plan is also essential in securing financial assistance for the business or attracting investors.

Question 2 The primary audience of the business plan will include suppliers, creditors and even customers of the business. Suppliers would be interested in determining if the business is strong enough to form a business relationship with in to the foreseeable future. The business plan can also be read by prospective customers who would want to determine if the business is likely to continue supplying them with the goods and services for a longer time. Other people who may be interested in the business plan for this business include the employees, who may want to know the stability of their employers for their own job security.

Question 3 Financial analysis is a very important part of the business plan. It shows the current financial state of the business as well as a forecast of the financial statements and a detailed analysis including financial ratios. Financial ratios are important for the business and may be used either by the business owners, creditors and other stakeholders in the business. Ratios can be used to assess the performance of the firm in relation to other businesses in the industry, or industry averages or comparing the firms performance over the years to determine if there are improvements.

Sue and Mark can benefit from this financial analysis of ratios by evaluating the financial performance of their business over the years. Among the main financial rations that ought to appear in the business plan include Return on investment, profit margin, asset turn over and debt ratio among others. Question 4 Financial forecasting enables the business to project its financial performance in to the foreseeable future. This includes a projection of financial statements to reflect what the financial position that the business will have in future.

A lot of information is needed to make this projection effective. Mark and Sue can get some of this information from records of their business relating to sales and incomes as well as other business expenditure. Revenue forecasting can be done using a variety of methods and techniques including qualitative and quantitative techniques, time series approach among others. Question 5 Mark and Sue should be prepared to meet a lot of business expenses in their new business venture. Some of the expenses may be legal requirements such as tax compliance, while others may be specific to their industry such as cost of sales, while other expenses are general to most businesses and include rent, electricity, salaries and wages among others.

Question 6 Financial forecasting involves projection of future changes in financial statements such as the balance sheet, income statement and the statement of operating cash flows (Houston & Brigham, 2009). The statements have to be prepared on an annual basis as