What is a Business Plan? Why do you need a business plan?
When should you write a business plan?
If our Small and medium enterprises (SMEs) are to measure up to standards and succeed today, they need to be built on enduring systems and adopt global best practices. The reason small businesses and start-ups fail is no other reason than the fact that they have no plan in place for the business. Like one owner of a high-end restaurant put it, “All my plans for this business are in my head.” For most SMEs, the plans, objectives and strategy of the business are in their head. And since these items are in their head, they are the only ones that can give interpretation and direction to the business. This limits the business and can make it go under.
The high casualty rate of small businesses is not akin to the developing world alone. However, successful businesses today have continued to invest in environmental scanning, business planning, strategy formulation and some form of survey. I was reading “Before You Quit Your Job” by Robert Kiyosaki the other day and I stumbled on his own story. He had embarked on a soul-searching getaway where he came up with the details of his Rich Dad Corporation in a two-page business plan. Although, I am sure the business plan would have been rewritten by now, several times over, but the fact I want to stress is that he had a business plan for the business before he started. So, don’t be surprised today that the Rich Dad Corporation is one of the richest financial information corporations around the world.
In this 7-part Business Plan Class series, you will understand what a business plan is, the need for a business plan and its advantages and the components of a good business plan.
Simply put, a business plan is a document that tells you how a business idea is to be implemented or how it is organized, who owns it, what services/products it offers, its target markets, its price, its market strategy, and its financial needs and projections.
Can you write a business Plan for any business?
A business plan can be written for any business, whether small or big. Just as you can have a business plan for an oil business, so also you can have a business plan for a groundnut business.
When should you write a business plan?
Many businesses wait until their bankers, investors, and some external factor demand for their business plan before they see the need to write one. You don’t have to wait for these reasons to write your business plan. If you want to distinguish yourself in your business/industry, you need a business plan for different reasons.
Who are those that may need your business plan?
2. External Investors
3. Your consultant
4. Your management
5. Your board
6. Your employees
7. Grant providers
8. Anyone interested in buying your business
9. Potential partners
Why do you need a business plan?
1. To spot potential pitfalls before they happen;
2. To efficiently structure the financial side of your business;
3. To focus your development efforts;
4. To benchmark your business projections and success;
5. As a strategy document for your business;
6. For your investors;
7. For your bankers;
8. For planning your marketing and promotional campaigns and sales;
9. As a product development material;
10. As a reference document/roadmap for the business owner;
11. It can be an HR document for the manpower planning, employee recruitment and staffing, talent management, skills audit and training and development material for a business;
12. To achieve the organizational development objectives of your business;
13. To document the succession planning of your organization;
14. To help you understand the details of running your business;
15. Can be used as your bank of business ideas for the future.
Business Plan Tips for SMEs
1. Make sure your business plan reflects your personal vision – don’t just put things in because you think it’s what someone else wants to read.
2. Be objective. It is important to weigh up the pros and cons.
3. Get professional assistance whenever you can.
The most pathetic person in the world is someone who has sight but no vision- Hellen Keller
It’s not too late, you can write your business plan today!
Does this spark an idea? Dream it, Do it, Get success!
Afroscandic.com would like to know your opinion. Please leave a comment in the comment box below.
In the next six editions, you will learn more about writing a professional business plan. Stay tuned to Afroscandic.com- Connecting Africans to opportunities & Celebrating Africans.
Written by U. Moses Urim, an Afroscandic Contributor.
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