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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 provides a structured approach to the company's growth.
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Risk Assessment: It allows Tended Ltd to assess the scale of risks they face in the dynamic wearable technology market.
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Loan Application: A well-prepared business plan can increase the likelihood of securing funding, for instance, Tended Ltd has already secured a £50,000 loan from Enterprise Loans. This suggests that a strong plan may have been influential in this achievement.
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Reduction of Risks: The plan forces the entrepreneur to evaluate all factors that could impact success or failure, which is crucial given the competitive nature of the industry.
In summary, the business plan acts as a roadmap for Tended Ltd, providing clarity and direction as they navigate their expansion.
Step 2
Counterbalance to the business plan's value
Answer
Despite its advantages, the business plan also has potential downsides:
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Time and Cost: Producing a comprehensive business plan requires substantial time and resources, which could be beneficial for product development instead.
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Entrepreneurial Experience: Leo Scott Smith is a young entrepreneur and may lack the requisite experience to create an effective plan tailored to the fast-paced nature of technology markets. This could impact the accuracy of the business plan.
Step 3
Potential Judgement on Tended Ltd's business plan
Answer
Judging the situation of Tended Ltd, certain points can be made:
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Rapid Expansion: The company is growing quickly, and a detailed plan may be crucial for attracting significant investment to support this growth.
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Funding Sources: Tended Ltd might also find it easier to secure funds from family or friends without needing a detailed business plan, considering its current operations and growth potential.
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Small Business Consideration: Since Tended Ltd is still relatively small, it might operate effectively with a less formal plan, relying on adaptability in a dynamic market.