“Why do you need a business plan?
- Because it highlights your business’ reason to exist. Duh!
- Because it describes your business’ mission and objectives.
- It describes how you intend to achieve said mission and objectives.
- And also sells out your business to stakeholders and potential investors.
As you read through this article, you will realize that a good business plan minimizes the possibility of failure and maximizes your project’s success; it enables thinking through policies, procedures, and strategies that enable the business to achieve its objectives.
You might find challenges describing what you do in less than 30 seconds, mostly when you haven’t clearly defined your goal(s). The business plan helps you get ready to answer any question regarding your idea; hence the usefulness of this article.
There are about 11 very important points that need to be clearly described in your business plan:
1. Executive summary
Should fit on less than one page. Written last, presented first, the executive summary sustains interest in the reader, explains almost everything briefly and clearly, covers the key areas of the plan, and presents a summary of the critical parts.
2. Company description
A good company description for your business plan, helps you communicate with lenders, employees, and potential customers. The company description should clearly state the benefits of your company to the customers, readers and etc. As the name states, this section must describe your company for the readers to clearly understand what you do or what you are about to do. It contains details about your Company name, address, and location, Form of ownership and legal status, Date when the company was founded. This section covers a few parts of strategic management:
Your Vision – answers the question: “what is the ultimate image of your business in ten years”?
For example, My project is a talent academy in my home town, my vision is to be the leading talent academy in Africa recognized for quality services, and concrete impact in the next 8 years.
Your Mission – answers the question: “How do you want to achieve your Vision”? (Translates your Vision into actions, what you are going to do in order make the Vision come true! how do you intend to actualize your vision?
For example, My mission is to Promote and give high consideration to the talents in African countries, Providing quality mentoring and teaching, providing self-development tools and lessons in fewer theories and more practices
Your objectives – both long term and short term, should be measurable, the objectives help you follow up your mission step by step. They answer the question: “what am I doing right now to make my mission fulfilled”?
Your values- the company values enable the employees to understand what the company stands for, creates some kind of discipline, and guide your decision-making process.
For example, My values are – Team work -Serving heart -Quality -Growth focused.
Team – Information about the management team is very important for potential capital providers’ staffing and responsibilities, Give also information about the responsibilities of each team member! This section should answer the questions: who are the key people on your management team? Who is responsible for what? What management positions do you need to fill in the near future?
3. Product or service description
You may be offering either products or services, or both. So in this section, you should clearly describe what you are offering not forgetting to indicate what your potential customers will benefit from your product or service. You should as well show what is unique about your product or service. This section answers the questions: What customer need does my product or service satisfy? What demands do I meet? What is unique or special about the product or service I offer? What is my competitive advantage?
4. Customer analysis
It is very important to define the type of people you are offering the product or service, what are the customers’ needs and wants? List the product or service attributes or features that are most important for your customers, Do a segmentation and describe your target group in detail. Indicate what your customers will benefit from your product or service.
5. Competitor Analysis
In this section, you should analyze your key competitors and their products or services to get a comprehensive overview of your industry. In this section, you should be able to ask yourself the question: who is my direct competitor? What makes him unique…? And after this analysis, you should be able to generate strategies how to utilize their weaknesses as your strength.
Make something like this:
|My competitive advantage
6. Industry analysis
In this section, you should be able to define the industry you are operating in, so, define the market and give information about its size and future development, you should be able to answer the question of what industry or market am I going to enter? If it is in agriculture, state it giving the different opportunities that your business has in that specific industry and the values that your business will add to the agricultural world.
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7. Business strategy
As this section comes right after the competitor analysis, this section should answer the following questions from your strategic management session. How can I outperform my competitors? What are my competitive advantages and how can I use them? What are my strengths, weaknesses, threats, opportunities?
To make this easy use a box like this below to make your SWOT analysis.
|Opportunity 1 2
|Threat 1 2
|Strength 1 2
|To do 1 2
|To do 1 2
|Weakness 1 2
|To do 1 2
|To do 1 2
You can use as many as you want as long as you’ve set good strategies, you are good to go.
8. Operations plan
This section should help you formulating how you are going to produce the product or deliver the service. In this section, the following questions should be regarded:
- How and where are my products produced?
- What materials and equipment I need?
- Raw materials, Equipment, Premises…
- How will I ensure quality control in your operations/production process?
- What standards should I put in place? What problems may hinder the production process?
And here you should be able to set strategies how to overcome the forethought challenges that may come your way.
9. Development plan
Many factors contribute to the fact that many businesses do not celebrate their first anniversary and some of these factors is lack an accurate development plan. In this section, you should be able to state your very short term, near and long term goals, you should be able to make an analysis of any sort of challenges that may hinder you from achieving them and ensure that you provide a solution to every challenge that you may face.
10. Marketing plan
Marketing comprehends more than advertising. The aim of marketing is to attract customers through a variety of means at a profit. It involves as well identifying customer’s wants and needs.
In this section, you should be able to tell how do you differentiate your product from your competitors? (List the competitive advantages), how will you deliver the product or service to the competitors? You should show the different marketing strategies that you have set and how you will implement those strategies.
11. Financial plan
Of course, you need a clear budget for your project, this section should have your projected budget, Projected Profit and loss statement, projected Balance sheet. Don’t worry, you might make a plan and realize that you will break even in the first three months, or even make losses it is very okay! Do not try to balance up things because you want to make a lot of profit within the very first year, the beginning might be very hard which is why you need to have these projected financial statements to help you have a clear view of what might happen.
Finally, write your executive summary, summarize the business plan contents shortly in separate paragraphs.
You are all caught up. That pretty much it.