4.1 Business studies Business plan Investing in a business takes time and money and involves many risks. To reduce the number of variables that may determine its failure , the key is in effective planning, in particular with such a resource as a business plan. assets: attività balance sheet: stato patrimoniale cash flow statement: rendiconto finanziario equity: patrimonio netto exhibit: prova, documentazione failure: fallimento income statement: conto economico liabilities: passività to lure: attirare to outline: delineare time frame: cornice temporale 272 What is a business plan? A business plan is a document outlining an enterprise s objectives, strategies and projected actions in order to survive and develop within a specified time frame ; it summarises the marketing, operational and financial objectives of the business and contains the detailed plans and budgets showing how these objectives are to be realised. It both helps to determine whether the prospective investment has any chance of success, and it provides useful data to any potential investors. Structure of a business plan Normally it is 15 to 20 pages long and, depending on its main purpose (to plan an expansion, to ask for loans, to lure potential investors, etc.), it usually contains these sections: a. Title and contents page; b. Executive summary (or Statement of Purpose), to provide a general overview of the plan; c. Company description, to specify legal establishment, history, principal owners, start-up plans, major achievements, etc.; d. Business concept, to give a description of the product, the market it serves and its competitive advantage; e. Market analysis, which includes a definition of the market in terms of size, demographics, structure, growth prospects, trends, sales potential and target market; f. Competitive analysis, to determine direct and indirect competitors strengths and weaknesses and identify possible successful strategies; g. Marketing plan, to outline the business positioning strategy, and the pricing, promotional and distribution strategies; h. Operations and management plan, to describe how the business works in terms of logistics (business location and accessibility, facilities, equipment, inventory, and supply requirements) and human resources (business structure, management and staff requirements); i. Financial plan, to state how much capital is needed and to provide details about: income statement , cash flow statement and balance sheet ; j. Appendices and exhibits , to include any other document or sample of products that may be relevant to the readers, for example: contracts with suppliers, letters of intent, legal documents, patents, etc.