A business plan is a document that summarizes the operational and financial objectives of a business. It is a business’s road map to success with detailed plans and budgets that show how the objectives will be realized.
Why Do I Need A Business Plan?
1.Making Sound Decisions
Writing a business plan helps an entrepreneur to be definitive and focused on business ideas and strategies. It helps to concentrate not only on financial matters, but also on , human resource planning, management issues, technology and creating value for a customer.
2. Solving Potential Weaknesses
Having a business plan helps with identifying and solving potential pitfalls and loopholes in ideas.
3. Raise Money For Your Business
Almost every moneylender or prospective investor wants a written business plan before they give an entrepreneur their money. Merely describing the concept of business is not adequate. Rather than doing that, simply ensure that there is an intensive business and financial statement that signifies the high possibility of success and also adequately state how much that will be needed for the business to be successful in the long-run.
4. Communicating Your Ideas With Stakeholders
Writing a business plan may be means of ccommunication that can be used to secure investment capital from financial institutions or moneylenders. The entrepreneur will be able to use it to convince people to work for him, to secure credit from suppliers and to draw in potential customers.
5. To Cut Back Risk
Entrepreneurship could be risky but however, that risk can be controlled as soon as there is a well-drafted business plan. Having a business plan allows an entrepreneur to plan better, make better decisions, and enjoy clear and possible view of the future of the company.
Keep the following objectives in mind when writing a business plan:
- Put together a concrete plan of action: layout the blueprint for what you have planned for your business, and the manner which you will use to promote your items or render your services.
- Show them the money: articulate the amount of money that will be needed at the start.
WHAT SHOULD BE CONTAINED IN A BUSINESS PLAN
Briefly state what the business is and why it is assumed that it will be successful. Include the mission, product or service, and relevant information about business, location and employees. Also include financial information and high-level growth plans if there are plans to ask for investments.
Provide detailed and relevant information about the company. Go into details about the problems the business solves. Be specific and list out the consumers, organization, or businesses the company plans to serve. Provide the competitive advantages that will make the business a success.
Analyzing the Market
There will be a need for a great understanding of the industry outlook and target market. Studies will show the various things other businesses are doing and what their strengths are. In the market research, search for developments and themes. What do successful competitors do? Who does its work? Can it be done better? Now is the time to answer these questions.
Service or product line
Describe what is being sold or what service is being offered. Explain how it benefits customers and what the product lifecycle seems like. If there is research and improvement for the service or product, give an explanation for it and explain it in detail.
Organization and control
Tell the reader how the organisation might be based and who will run it.
Describe the legal structure of the business. Explain that it is or planned to be a sole business ownership or there is a plan to form a partnership or limited liability company.
Also explain how every individual’s distinctive and unique ability and experience will contribute success to the enterprise.
Marketing and sales
There is no specific way of approaching advertising and marketing strategy. This strategy should evolve overtime and alternate to suit unique needs as they arise.
The reason of sales and marketing is to offer an avenue of the way to appeal and preserve clients. Also give a discription of the plan to make sales.
When asking for an investment, this is where all the investment requirements should be stated. The goal is to explain clearly how much funding will be needed over the years and precisely what it will be used for.
Also give a detailed description of how the money will be spent. Specify if you need money to pay for certain bills, buy equipment or materials or pay staffs salaries.
Complement the investment request with financial projections. Your goal is to make sure that the investor or reader is convinced that the business is solid and might be a financial success.
If the business has already been established, include income statements, cash flow statements and balance sheets for the last three to five years. This is a great place to use graphs and charts to tell the financial tale of your enterprise.
Use appendix to provide documents or supporting documents and other materials that were specifically requested for. For example, the history, product pictures, references , licenses, permits, patents, resumes, CAC documents, ETC.
The significance of having a business plan cannot be over emphasized. It helps an entrepreneur with a lot of things like getting funding from investors, increasing business clarity, formulating clear goals and objectives and also having a clear business objective. Therefore, every entrepreneur should consider having a business plan so as to achieve important business objectives.