Uses of a Business Plan
Evaluate business-plan uses for finance, SWOT analysis, planning, resource decisions, risk reduction and communication with lenders or other stakeholders.
- Syllabus
- First assessment 2019
- Course
- Business XBS11/YBS11
- Level
- AS
Exam points
- Evaluate business plans through easier finance access, SWOT analysis, planning and risk reduction.
- Apply plan uses to resource purchases, lenders, forecasts and development decisions.
2.3.1.1b - Business plan uses question 1
[Maximum number: 6]
Sources for use with Section A
Extract A
What is Zwift?
Millions of people around the world enjoy cycling. However, the weather or road
conditions can sometimes make it difficult or even impossible to take part in this activity.
Zwift created a solution to this by introducing a virtual reality computer program, which
combines cycling with computer gaming. The cyclist rides their bicycle indoors while it is
attached to a fixed frame, so the bicycle does not actually move. This allows the cyclist to
watch their progress on a virtual road on a computer screen. People of all cycling abilities
can improve their fitness at the same time as enjoying social interaction with fellow
cyclists from around the world.
By paying Zwift a $10 fee every month to use the game, the cyclist’s efforts can be
displayed in a virtual world on the computer screen, complete with maps, roads,
landscapes and other riders to interact with.
Jon Mayfield and Eric Min, both keen cyclists, launched Zwift as a private limited
company in 2014, with an initial investment of $3m, followed by venture capital of $27m
in 2016. The statistics are certainly impressive. In October 2017, Zwift had more than
300,000 riders from over 150 countries. Between them they had collectively logged
218,128,291km. There are currently no direct competitors to Zwift and with several
additions to the game being planned its success looks set to continue.
Extract B
Selected financial information for Zwift for year ending 31 December 2017
| $ | |
|---|---|
| Revenue | 36\,000\,000 |
| Cost of sales | (21\,000\,000) |
| Gross profit | 15\,000\,000 |
Analyse two possible advantages for Zwift of using a business plan when setting up the business.
Knowledge 2, Application 2, Analysis 2
Knowledge
Up to 2 marks for defining, e.g.
•
A document designed to provide information about a
new business (1) to persuade financial backers to invest
(1)
OR
For stating up to two advantages, e.g.
•
To gain finance (1)
•
To show how the business will be run (1)
Application
Up to 2 marks for answers contextualised to Zwift, e.g.
•
Zwift first launched the program with an investment of
$3m (1)
•
Zwift has 300,000 riders from over 150 countries (1)
Analysis
Up to 2 marks for reasons/causes/consequences for Zwift, e.g.
•
As a result of producing a business plan, Zwift may have
been able to obtain enough finance to allow them to
launch the program (1)
•
Potential problems could have been found and resolved
by producing a business plan, helping the business to
be successful (1)
(6)
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