Effective Business Planning
There are a number of factors to consider when starting-up a business, indeed it is one of the most daunting experiences, particularly if you do not know what starting a business entails, in terms of the legal, taxation and filing requirements. Coupled with all the worry, you then have to put all your plans, thoughts, visions, goals, aspirations and financial projection on paper.
A Business plan strictly speaking is the incorporation of all your thoughts, vision and goal on paper, so that a third party can pick up your plan and know what your aspirations are and where your business is headed.
It is essential to have a pragmatic and functional business plan when starting up a business. A business plan is a blueprint for the business/owner and a communication tool for your businesses investors. It sets out how you propose to run the business, whilst communicating to third parties how you expect to achieve your vision and goal for your business, it also sends a clear message to key management staff, whilst offering transparency on the direction the business is headed and the business budget. It is a document which would usually include a detailed analysis of risks and uncertainties, product definition, market and industry analysis, the industry, marketing strategies, financial projection. A business plan is mainly used as a tool for measuring the success of your business, in addition to being a tool to from securing external financial assistance. Without a business plan you are unlikely to have a tangible projection of your goals and objectives and subsequent attainment.
In reality the world of work is not as simple as drafting a business plan and waiting for success to find you. Not all businesses that have business plans succeed and not all businesses that do not have a business plan fail. Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one. This might lead one to ask if the business plan is a myth. The truth of the matter is that the business plan to a business man is like a bible to a practicing Christian. The business plan represents your faith in the business venture you are about to embark. Furthermore, it keeps you on the straight and narrow. By writing a business plan, you have actually thought your idea through in your head. It also shows any third party involved in your business that you have thoroughly reflected on your business idea. Let’s face it no one
wants to invest in a non-starter, you want to be able to exhibit sound business acumen and most importantly you want your would be investors to see this.
One might argue that a business plan is only needed by a business owner who seeks financial assistance. This is not necessarily the case; a business plan is a brilliant idea irrespective of your need for financial assistance.
Some of the reasons for writing a business plan include the following:
1 Helps unveil a business
2 Helps with External financial assistance
3 Helps define the purpose of your business
4 Helps you find strategic means to achieve the objective of your business
5 Helps with marketing strategies
6 Helps target customers
7 Helps with brain storming and logical thought process
8 Helps avoid costly mistakes and ambitious projections
9 Helps show that your business will generate enough profits to cover your expenses
A business plan is not only essential for new start-ups, it is also vital for an existing business; it helps the business assess its present position against what was initially projected. It also enables the business focus on its growth aspirations and ways to achieve desired growth. For some existing businesses the focal point shifts slightly from financial to operational and day-to-day project management. For others the focal point might remain financial, especially if there was a smooth transition from start-up, the business might be in the growth and expansion phase, which also needs funding, thereby making the focus of the plan financial. Either way, the owner will have to show how the expansion will be achieved and how beneficial the expansion will be.
A business plan can either be written from scratch or done using a business plan template, which builds on an existing model for your business plan. The use of a business plan template is highly recommended as it ensures you have included all the necessary details within the plan.
Your business plan content must have a broad explanation of the products and services that your business sells or carry out. It must also contain a description of the market that your business is functioning in and the buyers in the market who will buy the product or customers who will need your services. The content must also contain your business pricing strategy and competition. Finally your business plan content must include your business’s financial projection, cash flow, profit and loss and the sources of capital to fund the business.
In conclusion, your business plan gets you to the door of success, whether that door opens depends on how realistic, and well though through your vision and idea is. If you have no plan as to what to do, maybe now is the time to seek help, with writing a succinct and laconic business plan. Let’s face it, it is better to have five pages of clear, well written business plan, with all major points covered and all your figures adding up than have a 50 pager which lacks substance and is fraught with typographic errors. Remember a comprehensive no-nonsense business plan is realistic and substantial.
Some things to remember
What kind of business
Who are the target audience
How will you reach your target audience
What about the guy next door (competition)
How are you going to target your competition
How will you get the would be customers to buy from you instead of your competitor
How will you carry on the day to day running of the business (employees)
How will you manage the employees
Where is the money to run the business coming from
What is your profit margin
Be confident, be confident, be confident