A business plan is a very fundamental document that will remain useful throughout the course of your business journey. This is because your business plan can help take your business from its present state to its desired destination or future by guiding you one step at a time. In simple terms, a business plan is an essential road map for business success that projects 3-5 years ahead and outlines the route a company intends to take to grow its revenue base.
Having a business plan is not just for the startup stage of a business but a continuous process as it helps to keep you organized and on track. Also, in Nigeria, like with most places in the world, most interested investors and institutional partners would typically request for your business plan before engaging in any meaningful discussion.
Now that we know the importance of a business plan, the question that follows is “how do I write my business plan”. Here are 10 tips to guide you:
Conduct a Thorough Research. The very first is to have a good understanding of the business space you are venturing into through a good market research. Ensure you gather sufficient knowledge and you understand your market, your competition, the kind of management structure that will benefit your business etc. The best market research you can do is your own research. Given that market and industry reports are often not readily available and/or accessible in Nigeria, an easy way to conduct market research is to look at comparable businesses who are targeting similar types of customers as you are.
Have a Concise Executive Summary. The first part of your Business Plan should be your Executive Summary. This is usually the most important part of your Business Plan as it is the first and sometimes only section of your Business Plan that is read. Keep it to a maximum of 2-3 pages and make sure that it gives a good snapshot of your entire business plan.
Build a Story around Your Business Description. One of the leading advise for entrepreneurs around marketing their businesses in recent times is story telling. Your description of your business should be in a fluid and descriptive way that gives the reader information about relevant historical information; mission, vision and strategic objectives; incorporation details or business structure; and what problem the business is solving. You need to make a strong case for why your idea/business venture is important and this will help to set a Foundation for helping to motivate you or any other reader on the potential.
Outline Your Competition. After you have researched your market and described your business, the next important focus is on analysis your competition. What are the strengths and weaknesses of the competitors within your market? Your answer will help you know what mistakes to avoid making and effectively help you determine your competitive edge. You will also understand the barriers that can be developed to prevent competition from entering your market, and any weaknesses that can be exploited within your product. It is important to note that your competition is not only a similar or comparable product/service to yours but also what your target customer may be willing to spend money on instead of your product/service.
Be Clear about Your Market and Sales Strategy. Following closely behind the Competitor Analysis should be a clear marketing and sales strategy. Your market strategy outlines how you intend to reach and persuade your target market about your product/service while your sales strategy is how you get the customers to make the purchase. Although strongly linked together, it is important to be able to detail in your marketing strategy how you intend to reach your target audience and build long lasting relationships while your sales strategy has to show how you intend to convert these relationships to sales transactions.
Present a Strong Team that Can Operationalise Your Plan. As you write your business plan, you need to think about how your business will run, the process involved and the people you need to run it. Your operation and management plan should describe how the business functions on a continual basis, state qualifications of the employees needed, state day to day job description, state tasks assigned to each division or unit within the company and the capital expense requirements for the operations of the business. Your business plan is only as strong as the team that will implement the strategies.
Be Realistic About Your Financial Plans and Projections. At the end of the day, your business has to be set up to make profit and your financials have to present how and when this will happen. For a new business, a startup cost projection will be important to outline your detailed expenses for the first 6 – 18 months of operations. Other important financials to include are the sales and expense projections, cash flow statement. Your assumptions for all the costs have to be reasonable particularly in highlighting your break even point.
Keep it Straight to the Point. If it takes too long to write you might go off track at some point. Keep the plan short. But don’t confuse simple wording and formats with simple thinking. The reason you’re keeping it simple is you can get your point across quickly and easily to whoever is reading it. You can cover everything you need to convey in 20 to 30 pages of text plus another 10 pages of appendices for monthly projections, key team CVs, detailed product descriptions, process flow and other details. If you’ve got a plan that’s more than 40 pages long, you’re probably telling a long story.
Make Appropriate Use of Visuals. Just as with story telling, visuals bring your Business Plan to life. Nowadays, some entrepreneurs are using Power Point through a report format to bring more visual elements to their Business Plans.
Remember that a Business Plan is not meant to be a one-off document. It will change overtime as the business grows and develops. Putting time to writing a good business plan will help for a much easier start off time and will help mitigate unforeseen risks as your business becomes more established.
For more information: Check out our Learning Center and Tools and Templates section for Videos and Templates on How to Develop a Business Plan.