Not every business gets luckily successful without a business plan. And perhaps this is not the era where many businesses succeed without a formal business plan.
At the same time, a business plan does not guarantee a successful business. If you don’t set your priorities right and have yourself organized, your business might struggle even when you have extraordinary ideas and talent.
Starting a business from scratch can seem discouraging especially when you have little or no experience. But trust me; it’s not as difficult as it may sound
When starting a business, you need to think from all angles; skills required, how possible to achieve them, the needs that can be satisfied by your product/service, and the business viability.
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- 1 What is a business plan?
- 2 Why you need a business plan
- 3 Therefore before starting a Business:
- 4 Stages of developing a business plan
- 5 Components of a Business plan
- 6 Features of a good business plan
What is a business plan?
A business plan is a written document containing a body of information that guides the setting-up of a new business or the rebranding of an existing business. The business plan is designed to boost the movement of business.
A business plan should be the most important part of any business; it gives you the big picture of what you are embarking on. No matter the kind of business you have or plan on starting (online or offline), you need a plan.
You should have a reason you are working your ass off, if not you should get a job and not a business.
Maybe this is why my first blog business failed. As a web designer, all I knew was that I needed a website to start my blog business – that didn’t cost me a thing since it was my job. Believe me, I was forgetting a whole lot of stuff I ought to have brought first.
When things weren’t working out, I knew I was doing some things wrong. I knew I needed to plan and strategize my business. I took a break, made research, and was ready to go again.
Before we dive right into the matter of the day, let me make it clear why you need to create a business plan.
Why you need a business plan
Before going into business, there is a need to document your ideas. Just as a plan is important when building a house, so is a business plan important for starting a business. As the saying goes “The faintest pen is better than the sharpest memory”. Writing your business plan has a lot of advantages:
- It defines and focuses your business goals with appropriate information so they become clear.
- Helps you allocate resources judiciously especially when there is a very tiny budget. Stops you from spending money on resources and tools you don’t need.
- A business plan helps you avoid some unforeseen problems
- A business plan helps you define where you want your business to be in a certain period and how you plan on getting there.
- And finally, a business plan gives you a clear picture and helps you determine your focal point every day, reveal your omission and weakness.
Therefore before starting a Business:
- KNOW YOUR GOALS
Why do you want to start a business? What do you hope to achieve? Do you have a certain amount of money you want to make in a month or throughout the year? Do you need to create a product? These are questions you should have in mind to make the planning process as easy and simple as possible.
This is what gives your business a sense of direction. It doesn’t matter if you have a one-line goal in your plan. Make sure it’s strategic and achievable. Plus, depending on your goal – it could be weekly, monthly, quarterly, or yearly.
- FOCUS ON THE BIG PICTURE
Once you have set a footpath, learn to walk on it.
Now that you have created your goals, how do you plan of reaching them? This is the big picture of your business. There is a need to have a strategy in place so you wouldn’t have to get up every day without clues on the next line of action for your business.
A business plan will give you the big picture in a piece of paper making it simpler and easy to glance through your goals. This way you get to know if you are doing right or wrong.
I’ve created a business plan planner template that includes a business plan outline and a general business plan template. You can get it by signing up below.
What you’ll get: A one-page business plan template, sections you can set goals and plan your actions.
- MAP OUT YOUR PLAN
To attain any success in business, ideas are not just enough. Planning is the most important part of the success of a business. Where do you want your brand/business to be in a certain period and how do you plan to get it there? Just as a plan is important when building a house, so is a business plan important when starting one.
Creating a plan will help simplify your present and future situations. To create a successful business plan, you should know the specific problem your business would solve. In this way, it becomes very clear to create one.
- Set business objectives: This gives a sense of direction to the business. Sometimes what you think is a master idea might not make it to your plan draft after some deliberation and analysis. So when it comes to setting your business objectives, be as purposeful as possible.
- Analyze the environment/Identify opportunities: There is a need to identify opportunities before setting up a new business. It will help you determine if there is an investment prospect. It will also help you know the product/services clients would need; the reasons why such products/services are not presently meet.
- Form specific targets and put your plans into action.
Stages of developing a business plan
- Make a commitment to go into business
- Analyze your weakness and strength
- Go for product/service that fits your strength
- Research the market for your product/service
- Develop your product and market plan
- Develop your legal plan (sole proprietorship, partnership, or corporation)
How to organize your business plan
When it comes to managing your business plan, you have to make sure you prioritize them according to your business goals and objectives. First things should come first.
Components of a Business plan
Writing a business plan can be overwhelming but the odds are great that businesses without a plan tend to fail. What a business plan should contain
- Cover page …………………………………………………. Page #
- Table of content …………………………………………. Page #
- General/Executive summary ………………………. Page #
- Business description …………………………………… Page #
- Market research/analysis …………………………… Page #
- Competition analysis ………..……………………….. Page #
- Management ……. ……………………………………… Page #
- Operation plan …………………………………………… Page #
- Finance analysis …………………………………………. Page #
- Appendix ……………………………………………………… Page #
The general/executive summary comes first in the chapters of the business plan, however, it seems easier when written last because by now you have a firm knowledge of details to summarize. It is the summary of the entire business plan – a general description of your business including everything in the business plan outline. It explains your business in detail, that product or service you offer, where you want your business to be in a particular range (let’s say 2-3 years).
A good business plan should be able to answer the 3 W’s; – ‘What’, ‘Where’, and ‘Why’. It is very important for your business plan to give befitting answers to the questions. And thus, the executive summary should draw attention to the following:
- Company’s information: Short general information about your business; year of formation, the company’s location, number of employees and their roles.
- Mission statement: This answers the question ‘Why’. Why do you want to go into the business?
- Products and services offered: What are the products or service you are offering? Who is your target audience? What prompt the location you choose to establish your business?
Before now you ought to have determined whether or not there is an investment opportunity for your type of product/service in the location you choose.
This is a detailed account of your business, its name, location, services to be rendered, personnel’s work experience, and educational credentials related to the business.
Market analysis gives you an idea of the target market; that is, consumers at every level including corporate organizations, communities, famous personalities who are liable to be your potential customers and benefit from the product/services to be rendered by your business.
The market place has gotten crowded due to many and much more competition. How do you come up with a business plan that can eventually become a successful one amidst the competition? The simple answer would be “You need to find a way to stand out from the crowd”.
Therefore, this section should deal with;
- The industry: How is your intended industry? How big or how small is it? Make a research on the growth trend (the past and future). Having gotten answers to this, it’s time to narrow down your focus should be in the industry.
- The environment/opportunities: Now that you have reached conclusion on your target market, it’s time to analyze the environment and to determine the type of products/services your potential audience would need.
- The competition: Is your potential product/service already served in the chosen location? If Yes; How is it served? How can you make it better?
Know your top competitor, identify their strength and weakness, and BOOM – use it to your advantage.
Analyzing competition gives an insight into a list of competitors who engage in the same business and what you can introduce into your business to gain a competitive advantage over other competitors.
This factor is very important when it comes to planning. Details of the leaders are unveiled with their experiences, skills, and education. This makes it easy to know what position each would fit into.
- OWNER AND BOARD OF DIRECTORS: Not all investors like to dabble into any company/business without seeing their management; your investors need to know they are making the right decision while investing in your business. This section covers detail, the background of the team. It’s important that you surround yourself with individuals who can help accomplish your mission and vision.
The operation plan helps you narrow down how your business will run.
- The organizational structure (CEO, MD, Secretary, etc.)
- The facilities and equipment needed
- Your business relationship/interaction with your suppliers or clients
- Initial and long term staff need
Another very important factor in the planning process. This analyzes in detail the financial input and output of your business, like the take-off capital, proposed charges, proposed monthly expenditure, monthly return on investment, and yearly return.
A business plan appendix provides additional information and documents of the business structure. May include:
- The organogram: Organogram is just another name for organization chart.
- Resume of leaders
- Additional information/descriptions of products and services
- Legal agreement
- Essential backup plans
Features of a good business plan
- A good business plan should be free of defects and technical flaws
- It must reflect your masterpiece or at least something close
- A good business plan must showcase your ability and desire to succeed and take risks.
Finally, a good business plan has nothing to do with length or the overall information covered. It’s always about figuring out your goals and strategies to achieve them.