How to write a good business plan

With a well written plan, a business idea can become a successful venture, Udeme Ekwere writes

If you fail to plan, you plan to fail.” That is a popular cliché that most successful entrepreneurs chant as part of their success stories.

Some businesses end up only as ideas, owing to the inability of the entrepreneurs to critically plan their business.

This therefore brings to fore the need for any would-be entrepreneur to draw up a business plan for his/her business.

Analysts have said that oftentimes, an entrepreneur who draws up a good business plan has an edge in case of drawing funding from investment companies more than one who has ideas but cannot come up with a good plan.

Investment funding companies are usually more at home with a business man who has a well-outlined business plan than one who doesn’t.

In its simplest form, a business plan is a guide or a roadmap for a business that outlines goals and details how the business owner plans to achieve those goals.

A business plan is a document that describes the business, its objectives, strategies, target market and financial forecasts. It is a blueprint to a business’s future.

Business plans can vary in length, style and content, but the key is to ensure the document is realistic, practical and regularly reviewed. It should not only set the direction for the business but act as a reference point for measuring performance.

It may seem like a lot of work at the outset, but a well prepared business plan can save one time and money in the long run and help to secure major contracts or funding.

Most importantly, a business plan incorporating a feasibility study will help to determine whether an idea is commercially viable and any issues one needs to address or plan for along the way.

Among other things, it will help the would-be business owner to apply for finance from a financial institution or investment managers who are concerned with funding Small and Medium Enterprises.

A business plan also assists in securing investors, sponsors, suppliers and staff for the entrepreneur.

Apart from clearly outlining the goals and long-term vision of the business, a plan will also help to determine the commercial viability of an idea, as it will examine your business idea from many different angles and also test one’s commitment and motivation.

Analysts say that one can easily identify a business’s strengths, weaknesses, opportunities and threats through a business plan, develop strategies to successfully operate and market a business as well as establish measures to evaluate business success.

Here is a business plan outline, listing the sections in the order in which they will appear in your completed plan with a brief explanation of each section to help you get organized and guide you through the process.

An experienced entrepreneur, Mrs. Bisi Shoneye, says that in writing a business plan, several aspects have to be taken into consideration;

The executive summary

The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you’re asking for in the summary.

Business description

The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.

Market strategies

Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales.

Competitive analysis

The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.

Design and development plan

The purpose of the design and development plan section is to provide investors with a description of the product’s design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.

Operations and management plan

The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organisation such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial factors

Financial data is always at the back of the business plan, but that doesn’t mean it’s any less important than up-front material such as the business concept and the management team.

Shoneye says, “A business plan is the best way to test whether or not an idea for starting a business is feasible, other than going out and doing it. In this sense, the business plan is your safety net; writing a business plan can save you a great deal of time and money if working through the business plan reveals that your business idea is untenable.”

Often, an idea for starting a business is discarded at the marketing analysis or competitive analysis stage, freeing you to move on to a new (and better) idea.