Business Plan

 

 

WHAT IS A BUSINESS PLAN?

Sometimes called as business strategy or strategic business planning, a BUSINESS PLAN applies to the planned activities and aims of any entity ( your Business ), where effort is being converted into results. It is a plan which details what a business will sell, to whom, when and how. A business plan is essential when it comes to growing and even selling your business. If you have followed a business plan and you decide to advertise your business for sale you will get a much better result  in the sale of your business than if you have not followed a business plan. As part of a business plan you should have a section on business name ideas that you have for your business.

 

THE VALUE OF A BUSINESS PLAN


No matter the size of the business, a wise business person recognizes the necessity of a business plan because the plan creates a written outline that evaluates all aspects of the economic viability of his/her business venture which also includes a description and analysis of business prospects.

The business plan becomes the roadmap to chart the course of the business and branding your business with a easy to use name should be part of that plan. However, since conditions could change and vary, the business plan needs to be periodically reviewed and updated.The business plan is a guide rather than a strict manual to business operations. It is also your way of communicating the business idea to prospective audience. It assists in preventing problems, identifies growth strategies and is a tool in your search of funding. It is therefore an integral tool in any business venture, and not something to be done without.


WHY PREPARE A BUSINESS PLAN ?


First of all, a business plan will define your objective using appropriate information and analysis.

  • It can be used as a selling tool particularly in dealing with lenders, investors, and banks.
  • It can uncover weaknesses and lacks in your planning process.
  • It can be used to solicit opinions from people, especially from experts in the same field.

 

THINGS TO REMEMBER IN WRITING A BUSINESS PLAN


RULE NUMBER ONE is to decide what you are actually trying to achieve and always keep this in mind. Remind yourself and everyone else involved of this aim. This minimizes distractions and will keep you more focused.

RULE NUMBER TWO, is to establish a strong ethical philosophy at the outset of your planning. This provides a vital reference for decision-making and strategy. A strong ethical code communicates your values particularly in issues relating to integrity, honesty, corporate responsibility, trust, governance, and other values.

RULE NUMBER THREE is a crucial requirement for a business plan. It is the return on investment (or for public services). By treating this as a vital requirement, plans are likely to be viable and therefore sustainable. In traditional profit-driven corporations, this tends to be a major requirement and the heart of all activities.

ANOTHER CRUCIAL REQUIREMENT is the need for your business to be financially effective in what it does, or it will cease to function. Remember that financial viability is necessary to sustain any organization.


CREATING A BUSINESS PLAN


It is not easy to write out a business plans, especially if you are a new entrepreneur. Business planning seems complex but in truth, it is based on plain common sense and begins with some very simple business start-up principles. The techniques of writing business plans remain basically clear-cut and uncomplicated.

These are 6 steps that will make it easier for you to produce a worthwhile plan:

  1. Write out your basic business concept.
  2. Gather all data on feasibility and the specifics of your business concept.
  3. Focus and refine your concept based on your data.
  4. Outline the specifics of your business – answer the what, where, why, and how.
  5. Put your plan into a form.
  6. Create business name.

 

CONTENTS OF A BUSINESS PLAN


Your marketing plan is a statement how you are going to develop your business, supported by relevant financial data. It should be based on actions, not masses of historical data. As a comprehensive document created to describe the future of the venture, the business plan should consist of the following:

  • Executive summary
  • History and background of the company
  • Clear description of business concept and value proposition
  • Marketing analysis
  • Operations and production assessment and development plan
  • Financial assessment and projections
  • Management and human resources assessment and plan
  • Implementation plan
  • Identification of resources
  • Proposed deal structure for investors
  • Survival strategy describing inherent risks and mitigation strategies
  • Growth strategy
  • Exit strategy
  • Appendices

Do not forget as you write your business plan that whoever studies it must be able to clearly understand the value proposition, why the business will succeed and how it is going to achieve this success. Be realistic in your presentation.

 

FORMAT

The format is a systematic assessment of all factors which are critical to your business purpose and goals.
It is important to clarify exactly what is required when faced with business planning or strategy.  The following are topics you can include in your plan:

A.      MISSION AND VISION STATEMENTS
A Business plan should start with  a mission statement.  A Mission Statement announces clearly what you are in business to do. It focuses attention on the business priorities, particularly emphasizing on customer service.

A Vision Statement is the concise outline of your purpose and goals.

B.      SALES PROPOSITIONS
Define your product or service offerings. This will include the way you do business and the business benefits of your customers as they do business with your company. Make sure that the definition of your service offer must make sense to your customer in terms that are advantageous to them.

It is important that you keep in mind the prime benefits customers value most and will lead them to be interested in your business:

  • Making money
  • Saving money
  • Saving time

C.      THE PEOPLE
You are the most important person in the business plan. Focus on how your prior experiences apply to your new business. Be factual. Your resume will be read by people you will be having business relationships with (like lenders, investors, and vendors) and they will eventually find out the credence of your claims.

D.     ECONOMIC ASSESSMENT
A business plan should provide a complete assessment of the economic environment in which your business will become a part.

E.      CASH FLOW ASSESSMENT
Include a one-year cash flow that will incorporate your capital requirements. Make assessments on what could go wrong and your plan how to handle the problems.

F.       MARKETING AND EXPANSION PLANS


LENGTH OF THE BUSINESS PLAN

As a general rule, a typical business plan consists between 20 to as long as a hundred or so pages.
The length depends on the purpose of the plan, the target, and the nature of business. Say for instance if the business plan is meant to attract investors, it may require more detail than it being presented just to communicate a growth strategy.


TIPS IN WRITING BUSINESS PLANS

  1. Avoid long range planning (over a year) or long-term, future projections. They usually become meaningless to your reading audience.
  2. Be extremely conservative in predicting capital requirements, timelines, sales and profits.
  3. Spell out your strategies in the event of business adversities.
  4. Use simple language. Make the business plan understandable and easy to read. Research on business plans. The internet can provide a rich source of information for you.
  5. As a selling tool, package your business plan in an attractive kit.
  6. Seek the advice of experts in your intended business. Submit your business plan to them for their opinions.
  7. Don’t disregard your weaknesses in your business plan. Be realistic, and don’t project yourself as someone you are not.


SHOULD YOU MAKE A BUSINESS PLAN?

New business persons tend to think that a business plan is unnecessary and a waste of their precious time. The truth i that a business plan provides many benefits and can contribute greatly to a businesses success.