The importance of putting down a plan for your business can never be overstated. It's not only useful when trying to raise funds from banks, investors or when participating in the several business grant opportunities across the world but it also serves as the guideline that reminds you of your initial goals and the appropriate route to get your business to the promised land.
Planning as you know is a very important phase that determines the success of a business. It simply should be the very first step to be taken before going into the business. This is because having a great business idea and enthusiasm for it is not enough to succeed.
To successfully set up and run a business, you, first of all, need to research your target market, your competition as well as the financial feasibility of your concept.
You simply need to plan how you can bring your innovation and creativity to your customers and manage to stay operational while being profitable.
The concepts laid down in your business plan is also there to help you determine the best marketing strategy for your business and this is the exact reason you should treat your business plan writing as a business process with goals and deliverables.
One other benefit of giving your business a plan lies in the idea evaluation process. Your business plan is the best tool to help you figure out if the concept will sell or not.
To do this, you need to ask yourself this very important question; "Would I invest in this business?" And please don't ask that as the owner of the business since this might attach some sentiments.
Rather you should assume someone brought such an idea to you for investments. With these in mind, you won't only be able to assert the chances of success for the business but will also be able to carry everyone along.
And by everyone, I mean those that you are likely going to convince to support your idea – Investors, banks, partners, corporate buyers, and maybe NGOs.
Believe me, these people will analyse your business based on facts so, you should eliminate any form of emotion and be as brutally honest as possible.
Most people think writing a business plan is a waste of time while others make it seem too boring with complexity but reverse should actually be the case.
Writing your business plan is literally similar to writing your future and as such, it should be a very exciting project. Whether you are starting a small business or not, you need a quality business plan so, let's take a look at the key components of an exceptional business plan.
Here are the major sections of a comprehensive business plan.
Company Description – Can you introduce your idea? State who you are, what your business concept is all about, your vision for the business and overall summary of how you plan to get your products and services to your target customers.
Mission statement – Briefly define the reason for your company's corporate existence while describing your products or services as well as your target customers. Your mission statement should be able to communicate the essence of your business. It should be concise.
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Core values – On what principles do you plan to set up and operate your business? This should be your fundamental beliefs that will help in driving your business and the values should remain constant throughout the growth of your business.
Product or Service – Identify your product/service as it's a vital key to setting up a quality business. It's key for an entrepreneur to have a clear definition of his/her products or services in order to effectively build and market them. What do your products do?
Finance/Funding Plan – How do you plan to fund your business? Where will the money come from and how will it be used effectively for the setup of the business? Give figures on the exact stages and financial impacts it will make on the business' funding sources.
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Market Survey – Thoroughly analyse your industry and provide valuable facts about who is there, what is going on and how you are going to impact it. This is also the stage where you are expected to analyse your target market and figure out if it's ready to receive your products.
Target Customers – Express your end-consumers in record figures. Who will benefit from your products/services? How many are they? This should be based on actual facts of your current market. Exaggerating won't help your cause.
Sales/Marketing Strategy – How do you plan to market and sell your product/service? This is your biggest business challenge which will determine if your great idea will reach it's end consumers. What is your marketing plan? What measurable goals and systems do you have for the process?
Whatever marketing strategy you choose to use, you will still need to build a quality website for your business as this will make your business available to a larger market.
Competition Analysis – Except you are completely creating something new, chances are, you already have lots of competitors and you ought to fully understand who your competitors are and how you can out-sale them while gaining your own share of the market.
Swot Analysis – what are your Strengths, Weaknesses, Opportunities and Threats? What makes your business better than that of your competitor? What could hinder your success and how do you plan to overpower it? What can you use to your advantage?
Revenue Projections – How profitable is your business? How do you plan to generate your business revenue? What is your financial forecast? How many sales do you plan to make within a certain time-frame and how much profit will be derived? When will your business break-even?
The major strength of running a great business lies in the profit-pulling power. You will need to generate as much profit as possible while minimizing cost. Here are the 8 proven methods on how to generate more sales for your business.
Human Resources – Even sole proprietors need assistance so, how many employees do you need and how do you plan to manage and maintain them? What will be their roles? How will help in moving the company forward? Will they be contract or permanent staffs?
Milestone Schedule – This should be like a semi-plan based on the prioritization of the various stages of your business startup phase. What are the steps you will take to bring your business into existence? Divide everything into sequential steps and illustrate how it will be carried out.
Operational Plan – After launching the business, how do you plan to keep it afloat? What does the business need to stay operational? How do you plan to manage and maintain your resources? What are the major activities and what is the financial implication?
Once you are able to stay afloat, you will need to begin to apply some business growing tactics and here are my 7 profound tips on how to grow a business.
All you actually need to do is to gain new customers as well as retaining your previous customers while generating more sales from them.
Progressive Objectives – what are your practical goals for the business? This could be in form of the number of sales to be made monthly, number of new customers to gain, market growth, number of products to developed, distribution channels etc.
Executive Summary – what is your overall conclusion on the analyses of the business concept? What do you think your business will need to survive the 5-year mark? How feasible is the business to your target audience? What is the economic importance?
Here are my 6 tips for helping you write a great business plan.
Prove that you understand your market
This is very important because a poor market analysis will certainly demote your competency in starting and running your business effectively.
How can you sell your product if you don't even know who you have to sell to or where your customers can be found?
For Loan Assessment teams, investors and the likes, to feel comfortable that your business concept is attainable, you will need to convince them that there is a market in need of your product/service and you know exactly how you will stand out from your competitors as well as how you will attract your target customers.
The best way to project this will be to present it with solid facts. Do a market research through surveys, analyzing industry reports as well as a thorough idea validation process.
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Backup your points with real evidence
A business plan with practical examples and evidence backing up each statement will surely scale through many hurdles than its counterpart.
When writing your business plan, you should ensure you make your calculations based on real data. Just leave everything fiction out of it.
A business plan that is backed by evidence of the feasibility of the concept is more powerful and proves more that your business is a success.
This doesn't mean that you should crowd your document with clustered research work. In fact, it could just be a brief statistical value.
For instance, if I'm writing a business plan for a tech company in Nigeria, on the market survey section, I would backup my potential customer base by briefly stating the number of internet users in Nigeria.
I wouldn't just say; my target market is the Nigerian internet users. I would rather say: I have over 70million customers up for grasp within the Nigerian internet sphere.
Other simple evidence could be a customer's quote, similar activities or even a historical pattern. It doesn't have to be a detailed research as you could literally include a link to more information.
Outline your risks and how you will tackle them.
To put down a quality plan for your business, you need to reference every single weakness and loopholes in the business.
You become stronger and more accountable when you demonstrate that you are aware of your key risks. This gives a clear path on how to reduce or overcome them. This also projects confidence that you're ready for the challenge ahead.
However, you should note that if you don't have a concrete idea on the best way to eliminate your risks, you shoot yourself in the foot in front of investors/partners/bankers and make yourself vulnerable to prying eyes.
Having a solid plan for tackling your business risks is essential and quite easy (if you've done your research on the business) but you can always seek professional help. I could help.
Eliminate every conflict across all sections
Do not go saying you intend to make 50 sales monthly in other to break-even in 2years (as your objective) and then, saying your business will break-even in 3years (on another section) or that it needs to make at least 1,500 sales for it to break-even.
Anyone can easily see the inconsistency in both statements. Try as much as possible to tie every point together. Link every strategy to your core objectives and demonstrate that your figures are viable.
For instance, if one of your primary objectives is to gain 20 new customers every week, then you should try to support this goal on the marketing section by inputting how much conversion each promotional channel needs to generate in order to attain that result.
You should use your business plan to show what the goals of the business are and how you are going to achieve them. If possible, include the steps.
Don't be vague. Be clear and concise.
A business plan is a presentation of a viable business idea for a professional body and as such, should be treated with all formal attributes.
There just shouldn't be any reason to mumble through your points. You should not waffle anywhere on your business plan. It doesn't help anybody. Not even you.
Instead, you should ensure your points are well-aligned, conveyed and easily understood. You don't need to mention every single detail about how your business will operate. rather we just need to know enough information to give us confidence that you have a clear plan in place.
You only need to envision your concept and demonstrate how you can make it a viable business. Address each section with authority while simplifying the process with straight answers.
Make it a well-structured document with proper layouts.
Even if you are writing your business plan for your eyes alone, having a properly formatted document makes it easier to track down any information you need to find on your business plan.
You should use clear large font headings, bolded subheadings and bullets to list your points. If possible, use graphs and tables to properly illustrate your forecasts.
Ensure you structure your document in a professional order with consistent font selection while highlighting the important areas. Properly presented business plans are not reserved for designers and writers alone.
The way you present your business plan matters so, you should try as much as possible to keep your content.
Proofread, recalculate and double check every single letter for spelling, grammatical errors or wrong figures. It's always best to let a third-party proofread it to ensure error you missed gets corrected.
Every business (including the real estate business industry) that intends to survive, needs a plan but since every business is unique in their own way, business plans vary.
The variations are usually in terms of content and size depending on the nature and size of the business as well as the sections that are more critical.
There is no standard format for the presentation of a good business plan but the above are the major areas that your plan needs to cover.
Remember that your business plan should give you a framework for presenting your concept and proven strategies in a logical, consistent and coherent manner while demonstrating how feasible it is.
Writing a convincing business plan can prove to be quite difficult and requires a lot of time and effort.
As an entrepreneur who is already too busy trying to focus on the key aspects (gaining prospects, sourcing for the right team, improving the product etc.) of building the business, you may need to outsource it and you can reach me here if you need help in drafting and finalizing your professional business plan.