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Creating and starting a good business plan
Business Plan
A business plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture. It is sometimes called the road map of a business that answers the following questions:
- Where am I now?
- Where am I going?
- How will I get there?
Skilled required in writing a business plan?
- Accounting/taxes.
- Planning.
- Forecasting.
- Marketing research.
- Sales.
- People management.
- Product design.
- Legal issues.
- Organizing.
Importance of a business plan
- It helps determine the viability of the venture in a designated market.
- It provides guidance to the entrepreneur in organizing his or her planning activities.
- It serves as an important tool in helping to obtain financing.
Writing the business plan
1. Introductory Stage
- Name and Address of business
- Name and Address of principal
- Nature of business
- Statement of financing needed
- Statement of confidentiality of report
2. Executive Summary
3. Industry Analysis
- Future out look and trends
- Analysis of competitors
- Market segmentation
- Industry and market forecasts
- SWOT Analysis
Internal Factors:
S = Strengths
W = Weaknesses
External Factors:
O = Opportunity
T = Threats
4. Description of venture
- Products/Services
- Size of business
- Office equipment and personnel
- Background of entrepreneurs
5. Production plan
- Manufacturing process
- Physical plant
- Machinery and equipment
- Names of suppliers of raw materials
6. Operational Plan
- Description of company’s operation
- Flow of orders for goods/services
- Technology utilization
7. Marketing plan
The marketing plan establishes how the entrepreneur will effectively compete and operate in the market place.
- Pricing
- Distribution
- Promotion
- Product forecasts
- controls
8. Organizational plan
- Form of ownership
- Identification of partners
- Management team background
- Roles and responsibilities of members of organization
9. Assessment of Risk
- Evaluate weakness of business
- New technologies
- Contingency plan
10. Financial plan
- Pro forma income statement
- Cash flow projections
- Pro Forma balance sheet
- Break-even analysis
- Sources and application of funds
11. Appendix
- Market research data
- Leases or contracts
- Price list from suppliers
Why some business plans fall?
- Goals set by the entrepreneur are unreasonable
- Goals are not measurable
- Lack of total commitment to the business
- Lack of experience in the planned business
- Having no sense of potential threats or weakness to the business
- Customer need was ignored
