Final answer:
The part of a business plan that outlines potential negative factors affecting a company is the 'Critical risks and problems' section. This section is essential for identifying challenges and demonstrating preparedness to investors and stakeholders. It includes possible risks stemming from internal or external factors, which are crucial for sustainable business planning.
Step-by-step explanation:
The part of a business plan that looks at the significant factors that could negatively impact the company is known as Critical risks and problems. It is a section dedicated to identifying potential risks, market fluctuations, or any contingencies that might challenge the business's growth or existence. Risks can originate from a variety of sources such as poor management, unproductive staff, stiff competition, or sudden shifts in market conditions.
Including a critical risks and problems section in a business plan demonstrates to investors and stakeholders that the company is realistic and prepared for challenges. Planning for risks is crucial as it can mean the difference between a business that can adeptly navigate difficulties and one that suffers significant setbacks or fails entirely. Thus, it is an integral part of a comprehensive business plan.
For example, a restaurant business may identify potential risks such as food contamination, high employee turnover, rising food costs, and changing consumer preferences. By identifying and addressing these risks, the business can develop strategies to minimize their impact and increase the chances of success.