BUSINESS PLANS
In this second part of a four-part paper on business plans, I look at what you should include under each plan element discussed in Part (1), what guidelines you should follow in writing your business plan and where you can get help and advice in writing a business plan and in developing financial projections
Writing a Sound Business Plan – A Dummy’s Guide
As we have seen in the previous paper, a sound business plan is an essential part of a business man’s armoury. As you write your business plan, remember to bear the reader in mind. The business plan is not a theoretical composition filled with technicalities and bogus high sounding terms. It is your description of what your business is now and what you want it to be in the very near future. Think of it as an opportunity to tell others how sound your business is and how much better it can get.
So, always write in your own style. There is no place for being too technical. Just say what you want to say in the language of your business and industry.
While writing, avoid exaggerating. The truth may not be as flowery as some cooked-up scenario, but the truth trumps fallacies always. Also do not make unrealistic claims about your business’ future prospects. Base your projections on hard evidence! Write only what you can back up and prove.
Avoid verbosity. There is no need to embellish or elaborate to an excess. Just say what is necessary.
Make reference to other key staff in your organisation and the role they would play in the organisation’s future success. Also remember to acknowledge outside professional help.
Do not include confidential information. You do not know into whose hands your business plan may find its way.
You are not allowed to be grammatically wrong. Typographical errors are largely unpardonable
Okay. Now you know what to avoid.
What should be included in the plan elements?
1. Cover Page
Should include
a. The title
b. Date of preparation
c. A statement showing that the document is confidential
d. Contact information
i. Company name
ii. Address
iii. Phone numbers
iv. E-mail addresses
v. Principal contact person
2. Table of Contents
Should be structured in such a way that “readers can quickly find the part that interests them”1
3. Mission Statement (should be limited to one paragraph)
Here you tell the reader exactly what your business is. Should specifically state
a. The purpose of the business
b. The target market
c. The factors that make your business and its products different from your competitors
4. Executive Summary
Under this plan element, tell your reader
a. the structure and background of your business
b. the company’s management and key staff
c. the relative position of your company in the industry
d. future growth prospects
e. what is required to make those prospects reality
f. if you are requesting for funds, state
i. the amount required
ii. how the funds would be employed
iii. how the funds would be repaid
NOTE: WRITE THE EXECUTIVE SUMMARY LAST!
5. Marketing Plan
Should include
a. A description of the product or service to be offered and how these satisfy what consumer needs
b. A comparison of the unique benefits your products and services offer over those of other closely competing products
c. A documentation of forms of intellectual property protection you may enjoy – patents, trademarks etc.
d. Identify your market. Who are your customers? Where are they located? What is there size?
e. List your major competitors along with their size, strength , weaknesses and other relevant information
f. Describe environmental, legal or governmental factors that could affect the future of your business.
g. Document your pricing strategy
h. Identify your product distribution channels
i. State your sales, service and warranty policies
j. Document your promotion and advertising plans and how they compare with competition.
6. Operational Plan
Should describe in detail
a. Who will direct the affairs of the company
i. Who make up the management team?
ii. How are your staff organised?
b. How will they direct the affairs of the company
i. How will new personnel be recruited
ii. How will they be trained
iii. Discuss the company’s management and operational policies
7. Management Control Systems
Describe systems in place to monitor,
i. Company’s investment in inventory
ii. Product or job profitability
iii. Sales management and effectiveness
iv. Admin and other overhead costs
v. Cash flow management
8. Financial Statements and Projections
Start by discussing
a. the present financial position of the company then,
b. the funds required for further expansion
c. how the funds will be spent
d. your plan for repayment
e. show how the additional funds requested would increase your profitability
The above narrative presented should be supported with historical financial statements for the last three years if available. The financial statements should be audited and certified by a firm of chartered accountants
You should here present:
i. Projected Statement of Cash flows
ii. Income Statement
iii. Projected Statement of Financial Position
iv. Income Statement and Statement of Other Comprehensive Income
v. Debt Repayment Schedule
(A firm of Chartered Accountants would be glad to help you with this. You may also contact me using feyitimianthony@yahoo.com )
9. Long Range Strategic Plan
Here describe
a. Where you want your business to be in the next few years and how you plan to get there
b. Include an explanation of your strength and weaknesses and opportunities open to you in your line of business
c. Explain your strategy for minimising your weaknesses and exploiting your strengths and opportunities
On a final note
After you have a rough business plan draft, let your accountant review and edit the document. This is VERY important.
If you need further assistance and professional advice on this matter, feel free to write to feyitimianthony@yahoo.com
Or call +2348184251501
You may also check the following online resources for helping you write sound business proposals
ii. www.bplans.com
iii. www.masterplans.com
The next part would show a sample business plan to serve as a model for you in developing your business plan. It will be entitled “Summing Up the Plan Elements – A Sample Business Plan”
References
1. Martin, Davis E. Managing a Small Business Made Easy. Entrepreneur Press, 2005.
2. Harroch, Richard D. Small Business Kit for Dummies. IDG Books, 1998.
3. David, Kintler et al. Independent Consulting – A Comprehensive Guide to Building Your Own Consulting Business. F+W Publications, 1998.
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