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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 crucial for Tended Ltd as it outlines the company's future direction and the necessary steps for achieving its goals. One major value of a business plan is that it allows investors to assess the potential risks associated with the start-up. Given that Tended Ltd operates in a rapidly changing technology market, a well-structured business plan may secure successful funding applications, such as the £50,000 loan from Enterprise Loans.
Furthermore, the business plan can help reduce risks by encouraging the entrepreneur, Leo Scott Smith, to think critically about the various factors affecting the success of Tended Ltd. This may include competition in the wearable technology market and potential customer engagement strategies.
Step 2
Counterbalancing factors
Answer
However, there are also challenges. The time required to create a thorough business plan can lead to substantial opportunity costs, particularly as Tended Ltd focuses on product development. Additionally, as a young entrepreneur, Leo Scott Smith may lack comprehensive experience in crafting a detailed business plan, which adds another layer of complexity.
Step 3
Potential judgments
Answer
In conclusion, while a business plan is potentially beneficial for securing investors for Tended Ltd and guiding future operations, the company's rapid growth may lessen the immediate necessity of a detailed plan. Tended Ltd might still attract funding through informal networks, such as family and friends, who may not require an exhaustive business plan.