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Outline two benefits of preparing a business plan - Leaving Cert Business - Question A - 2020
Question A
Outline two benefits of preparing a business plan. - It sets out clearly the objectives and targets of the business which gives direction and focus to the business.... show full transcript
Worked Solution & Example Answer:Outline two benefits of preparing a business plan - Leaving Cert Business - Question A - 2020
Step 1
Outline two benefits of preparing a business plan.
Answer
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Clear Objectives and Direction: A business plan helps define specific objectives and targets, providing a clear direction for the business operations.
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Secures Funding: It is instrumental in obtaining finance from lenders, as it demonstrates the viability and strategic planning of the business.
Step 2
Outline two reasons for business expansion.
Answer
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Economies of Scale: Expanding production can lower the cost per unit, as fixed costs are spread over a larger number of goods, enhancing profitability.
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Increased Market Share: Expansion into new markets allows a business to increase its customer base and improve its market position.
Step 3
Apart from grants, outline two sources of finance to fund business expansion.
Answer
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Share Capital: This involves raising funds by issuing shares to investors, allowing them to partake in company profits and growth.
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Retained Earnings: Profits that are reinvested in the business can provide a crucial source of funding for expansion plans.
Step 4
Outline two advantages of information technology to a growing business.
Answer
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Improved Communication: Technology enhances communication through various channels like emails and video conferencing, facilitating better teamwork.
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Market Research Tools: Businesses can utilize IT for conducting market research via online resources, allowing for informed decision-making.
Step 5
Outline two reasons why a business would carry out market research.
Answer
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Understand Competitors: To gather insights about competitors and identify areas for improvement or differentiation.
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Customer Insights: To comprehend customer needs and preferences, leading to better product offerings.
Step 6