You wouldn’t dare set out from a seaport to a location ‘on the other side of the water’ without having some sort of navigational tool and at least a good idea of where you’re headed. But many aspiring entrepreneurs think that it doesn’t require much more than a bright idea and funds to speed through the business growth path to ultimate success. They might find it expedient to draw up some sort of plan that roughly mirrors their expectations for their venture and the trajectory they believe it’s likely to take in its first few years. But in most cases, the devotion to creating a business plan that is a realistic (let alone useful) reference point and guide, is only half-hearted. There’s always a danger that comes with this non-challant approach to business planning. It often proves to be the achilles’ heel for a lot of enterprises.
In Nigeria, business plans riddled with wild projections, spurious data and impractical targets are cooked up by supposed ‘experts’ of business document drafting, and delivered to unsuspecting entrepreneurs whose trust in self-proclaimed business plan writers exceeds reasonable limits. These plans may end up as little more than additions to dusty bookshelves, pulled out for consultation or use only when there’s an investor around somewhere who requires a business plan of anyone who seeks their financial help. It is this lack of emphasis on practicality and prudence exhibited by entrepreneur and ‘professional’ business plan writer alike that turns many a business plan into a paper monument permanently seated in a bookshelf, or a dangerously misleading material that could imperil a business if its prescriptions are followed.
A proper business plan is one that is based on a realistic assessment of the business which it deals with. Here, we’ll take a look at some of the things that such a plan should contain.
- Executive Summary
This is a sweeping overview of the contents of the business plan. The executive summary is usually the first part of the plan; but it’s better written last, after the other sections which follow it have been completed. Important details to include in an executive summary include the business’s name and address, products and services, mission and vision statements, as well as the purpose of the plan.
- Business Description
This section provides information about the type of business being planned, its status or developmental stage (startup or expanding), its form (sole proprietorship, partnership, corporation, etc), and a statement about the business’s chances of succeeding. It’ll also do a business planner a lot of good to include details about its suppliers, target audience, as well as a summary of short-term and long-term goals.
- Product or Service Description
This section should clearly describe your product offering, including product features, and characteristics that make it unique. Zoom in on your product’s benefits, and point out why your ideal customer would want to buy it. If your product doesn’t have any obvious unique features, you should try to emphasize the aspects of it that they’re likely to appreciate the most (for example, lowest price, highest quantity, best customer service, etc).
- Market Analysis
You need to have this in your plan because there’ll be no sales forecast to speak of without it. The objective of the market analysis is to answer questions about the demographic and psychographic characteristics of the potential buyers of the business’s products or services, the size of the market, the outlook for the industry to which the business belongs, and the possible existence of opportunities to supply underserved market segments.
The market analysis, if it’s properly done, could yield a fairly clear picture of how profitable the market for an enterprise’s products and services really is. It also forms the basis upon which a marketing plan is drawn up.
- Marketing Plan
The marketing plan is an outline of strategies that a business works with in order to reach its target markets and encourage them to buy. Plans to be explained under this section include
- Product strategies, which should contain information about product packaging, presentation, and brand image.
- Pricing strategies, which tells how the business will set its prices, and how it expects its customers to respond to those prices.
- Promotional strategies, which notes the message the business wants to pass about itself and its products, as well as the medium through which the message will reach its intended audience.
- Management Structure
Don’t overlook the management and operations of a business when considering its future shape. Properly defining its various positions and the work that comes with them in such an important document as the business plan will make internal frictions less likely. This could, in turn, reduce the chances of the business failing (a large number of business failures are caused by intra-company strife). If staff duties are clearly spelt out in writing, much of the trouble that comes with overlapping duties and roles could be avoided.
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This article was first published on 27th October 2017
ikenna-nwachukwu
Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.
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