It is severally and strongly so, recommended to have biz plan as you venture into business. Many entrepreneurship promotion organizations offer training on how to go about developing one. So much material and templates online for self-help. However, you will also get professional assistance from consultants if you need. A good plan will need you to be utmost honest with yourself. You might throw financiers and investors but you can’t throw yourself. While there are many different styles and format of biz plans out there, the content is almost universally similar. Whether you end up with a 2 pager or a 50 pager of a document, it has to give coverage to the following
0. Executive Summary
Interestingly, this is the part you should write at the very end after all others. This is because it offers a one page summary of the other components of the business plan. It’s important to be keen on this since is it here you win or lose someone’s interest in your biz plan. Be clear and concise and avoid any lazy language.
1. The Business Idea
This entails the thinking that has gone into the business, what is it going to be doing, what need will the biz satisfy, who are the customers going to be and how will the biz sell. Importantly, here is also where you think of the likely name of your business. If you don’t have a good name you still haven’t thought deep enough about your name.
2. Market Research
You also need to know the market you are walking into especially in relation to your product. What do you know about your potential customers? Are they also the consumers? Are they individuals or other businesses? What are their needs and preference; do they care more about style, performance, quality, cost etc.? Who are going to be your competitors? Which competitor is way ahead of you, whom are you at the same level and who is below but upcoming? What is important to thrive in this market? How prepared internally as a person and a biz to compete?
3. Marketing mix
On the question of product, you just have to know your products in detail. From A to Z. Just like the herder would know a sick cow by seeing it from a distance, you will need to know your stuff. What is the quality of your products, colors, sizes, grades, packaging, material etc? A question to ponder. How many different products or services should you deal in?
A pricing strategy is also very important for you to know at your fingertips. Do you know the cost of producing a single unit of your product/service? How much would the customer be willing to pay? What price does the competitor charge? What will your price be? Who gets to buy on credit and why? Who qualifies for discounts and why?
Depending on its nature, the location of the business matters a lot. Do your customers have to come to your premise? Are they the type that might require a lot of space to feel free to patronize your biz? Might they need parking? Is the location secure for them? If they don’t have to come, what channels will you use to reach them? Do you have a distribution plan with agents, dealers etc.?
Having a promotion plan speaks to the strategy of ensuring your potential customers get to know about you, patronize your biz and come again and also bring you other customers. How will you advertise your biz? Here I must give a shout out to all those ‘wagangas’ showing us how aggressive to advertise. What will you do to ensure you retain customers? Some free samples, sale campaigns, discounts, and loyalty point’s maybe?
4. Form of Business
As you are making a biz plan, the assumption is you are already thinking of a formal biz. What legal personality will it take? Sole proprietor, partnership or a private or public company? Who will the other directors/co-founders be? What are they bringing into the table? How about key employees? What will their job roles be? Who will the staff be? What will they be paid as wages or salaries? Any other benefits?
5. Legal Responsibilities
What legal and regulatory responsibilities will the biz need to comply with? What licenses must you have? There usually are some stringent requirements for you to satisfy before NEMA for example gives you the necessary licenses. What fees will you pay? How about NHIF and NSSF? How about WIBA and other insurance related to the biz.
6. Costing and Sales Plan
This is perhaps the hardest part to prepare because it deals with figures some of which cannot be known upfront. Again, it becomes double hard to get to work those costs to a unit level. Spent as much time as possible knowing all the fixed and variable costs you will deal with? If possible get the help in working this out (so many qualified accountants out there who should help for a small fee). Otherwise, how would you know the ideal selling price if you don’t have a fair picture of the cost of production? Develop also a sales projection both in unit and cash terms.
7. Cash Flow Plan
As you start the biz, you will need to know how money will be coming in and how it will be going out. Its best if you can forecast a whole year ahead, knowing from the starting point what you have, then consider all the money coming in every month and how much will go out every month. This helps you schedule expenditures and identify blackspots early enough. Unless you muster your cash flows, then biz will be so hard. Here you are guided mostly by assumptions. But you will have to check it every now and then to update and compare with the actual (income statement)
8. Required Capital
How much do you need to get started? This should cover all the costs right from getting fixed assets to stock and overheads especially for the first to the third month. Having the figure will give you an indication of whether you are comfortable or you will need to adjust by considering alternatives including outsourcing work or buy and lease decisions.
9. Sources of Capital
Good now you know what amount is required for you to get started, where do you get it from? How much do you have from your own savings? How much can you get if you liquidated a few disposables? How much can you get from Friends family and fools? How much will you need to raise in conventional loans? Where will you borrow these loans? How will you raise the security they need? What other requirements will lenders have?
i. Action plan
In the end, you will realize you may not have all the required information upfront. So where you get gaps, you will need to fill them. That calls then for an action plan. What information do you still need? Where will you get it from? Who will help you? What will it cost and by when should you have it?
You may find that you will need to attach documentations that provide extra information to build your case in the business plan. Do you have a business profile? Attach it. Do you have product descriptions including photos, Blue prints, samples and demonstrations? Include them. Letters of recommendations from your financial institution, supplier or buyer? Include.
NB: A biz plan is not a static document rather a living one. You will need to look at it sometimes daily, weekly, or monthly. You will need to change some of aspects as your assumptions are challenged or confirmed. Look at it. Get help to look at it from a professional.
Now there are many biz plan templates freely available online. Try the one that suits you best. If you might need professional help preparing your biz plan, get in touch. We are happy to help.