Travel Reference
In-Depth Information
Feasibility
When it comes to producing your assessed business
case for this unit you should include a more detailed
cash fl ow forecast than that shown in Figure 2.4.
This is because anybody being asked to loan money
for a new business venture will want to see that you
have accounted for all income and expenditure that
you are likely to encounter. It is important, therefore,
that it is completed with realistic fi gures and that any
assumptions made are based on sound evidence.
Figure 2.5 shows an example of a detailed cash fl ow
forecast for a travel agency over a 12-month period.
It is important that any project plan or business case
that you develop is researched and realistic, and will
achieve its stated objectives, whether these are to:
•
Make a profi t within given timescales;
•
Raise income and cover costs;
•
Meet a recognised demand;
•
Target appropriate markets;
Cash fl ow forecasts can be completed by hand or
with a software package such as Microsoft Excel.
Using a computer program allows a business to
make adjustments to the cash fl ow without the need
to recalculate manually. Making adjustments to see
what the effect of changes in receipts or payments
on the overall cash position of a business is known as
sensitivity analysis. A tour operator, for example, may
want to know what the cash fl ow position would be if its
sales dropped by 10 per cent or increased by the same
amount over a given period of time. This re-calculation
would be relatively easy to do using a package such
as Excel.
•
Take account of competition;
•
Gain competitive advantage;
•
Raise money for charity.
Assuming that you have researched your proposed
enterprise thoroughly and presented it in a professional
manner, you should be in a good position to defend your
business case to anybody who may have an interest in
seeing it happen. This could be a bank manager, local
planning offi cer, accountant, fi nancial adviser or even
one of the dragons on BBC TV's Dragon's Den!
Weblink
Check out this website for more
information on cash fl ow forecasts for
businesses.
www.businesslink.gov.uk
Activity 2.14
Having completed your project plan, make a
professional, verbal presentation to explain its
feasibility to meet its objectives, responding
confi dently to questions and justifying its feasibility.
This activity is designed to provide evidence for P4, M2
and D2.
