ACCA Advanced Financial Management (AFM) Practice Exam

What elements are key components of a business plan?

1. Only financial projections

2. Proposed product and its market, technology, required resources, financial plan

3. Market analysis and operational strategy

4. Team structure and legal considerations

The correct answer is: Proposed product and its market, technology, required resources, financial plan

The correct choice encompasses the essential elements of a comprehensive business plan. A well-rounded business plan should ideally include a thorough proposed product and its market, which explains what the business offers and to whom it is selling. This context sets the stage for understanding the market dynamics and customer needs. Additionally, addressing technology is crucial as it outlines how the product will be developed, manufactured, or delivered. This helps stakeholders grasp any innovative aspects and the feasibility of the product. Required resources detail what is necessary in terms of personnel, capital, and materials to execute the business plan, while the financial plan provides the anticipated revenue, costs, and funding strategies essential for sustaining operations and achieving growth. In contrast, while options involving market analysis, operational strategy, team structure, and legal considerations are important elements of a business plan, they do not encompass the full breadth of what a comprehensive business plan should include. The chosen answer is holistic, ensuring all fundamental aspects are considered for successful business planning and execution.