Definition: a business plan is a document that convincingly demonstrate that your business idea can sell enough of its products and services so as to make products and services so as to make satisfactory profit and attractable to potential financiers.

In other words a business plan in a road map you can follow to start and manage a successful business. It shows step by step on how to start, fund, manage, monitor, and evaluate a successful business.

Business Plan as a Tool

Objective and goal creating tool

Management tool

Training tool

Promotion tool

Fund raising tool/capital

Staffing tool

Monitoring and evaluating tool

Business creation tool

Weakness/ omissions identifying tool

Measuring performance

For motivation

Why Prepare a Business Plan

To avoid silly mistakes

It defines and focus business objectives and goals

As a tool for fundraising, marketing, monitoring, evaluation, staffing

To be realistic on our intentions

To clearly communicate your vision/ ideas to other within and outside;

 Who should writes a Business Plan?

It should be written by entrepreneur since he/ she is the owner of the business idea and is the custodian of the vision.

 Can be written by consultants and employees.

What is a “good” Plan?

A good plan should be dynamic document which should be available for reference for decision making evaluation and future plans

It should clearly communicate visions and ideas

It should show the evidence of understanding of target customers

It should be appealing to the potential financier.

Benefits

·       It forces would be entrepreneur to establish written goals and objectives for their proposed businesses.

·       It enables potential entrepreneur to assess the viability of their business opportunity on paper

·       It assist in identifying the potential customers, marketing opportunities, pricing strategy, promotional activities, distribution strategy and a competitive conditions needed for business success.

·       It identifies the number of employees needed, the skills they should possess, the task they will perform and the methods of remuneration to be adopted.

·       It establishes the financial needs of a business and suggests the possible sources of financing

·       It helps to identify critical factors for successful entry and growth of a businesses in a given market place.

 Components of a business plan

Business plans include details under the following main sections;

1. Executive summary

2. Business description

3. Marketing plan

4. Competitor analysis

5. Management plan

6. Business operation (production/ service, delivery plan)

7. Financial plan

8 Appendices

Executive Summary

This should be done last

It includes the;

Type of venture

Products/ service to be offered ‘

How unique

It there a major opportunity for products/ services

The business status/ stage

Legal form of business

Location of business

Target market

% share of market

Competitor strength and weakness

Strategy of entering the market

Managing staff and their qualifications and experiences

Time frame for accomplishing your goals;

How much money needed for starting and running the business?

What type of financing are seeking

Loan

Grant

The strength of the business that will make it succeed

Future plans of the business

Business Description

For a new start up business it will include

·       Objectives, vision, mission statement and goals

·       Specific objectives (SMART)

·       Service objective (qualify of service)

·       Profit objective ( actual % and amount targeted)

·       Growth objective

·       Social objectives ( corporate responsibility)

·       Type/form of business venture

·       Date of commencement

·       Physical location

·       Advantages of the location

·       Postal address, physical address/ street/buildings/ road

·       Telephone contact/ email/ fax/website

·       Brief history of the business (company)

·       Experiences of the owners

Marketing Plan

·       Description of the target market ( customer segment)

·       Description of products/ services

·       Prices of products/ services

·       Distribution of products /services

·       Promotion of productions/ services

Competitor Analysis

Internal analysis both strength and weakness

External analysis (opportunities and threats)

Environmental analysis (political, social, economic, regulatory factors that can impact on your business)

Management and Organization

Key management staff

Their positions/ designations and responsibilities

Qualification and experience

Other staff

Their positions/ designation and responsibilities

Qualification and experience

Their number

Human resources practices

Staff recruitment

Motivation ‘

Training and development

Reward and recognition

Staff appraisal

 Business Operation

Product/service development design and facilities;

Description of premises

Ownership status

Renovations/ facelifts/medications

Products and services to be offered

Machinery, tools, equipment and other facilities required

Implementation

Procurement

Repair and maintenance

Repair and maintenance

Future expansions

Legal requirements: business name, tax compliance, labour laws, by-laws e.t.c

Monthly overhead expenses

Professional and support services

Financial Plan

Pre-operational costs ( costs before start-up

Working capital

Projected monthly cash flow statement

Projected annual cash flow statement

Projected proforma income statement

Projected balance sheet