STEP- BY- STEP GUIDE OF DRAFTING A BUSINESS PLAN
What is a business plan?
A business plan is a formal written document that clearly shows the business goals viz-a-viz the vision and mission of the business, and importantly, the time frame at which these goals need to be achieved.
Moreover, It also talks about what the business is about, startup information of the business, financial target, and the strategies it intends to implement to bring about the target.
To sum up, a business plan serves as a compass that helps the business to navigate to the right path and achieve its desired or set goals.
Every business which intends to be successful must have a good and functional business plan, as very few businesses can last without one.
In addition, it could also be required to obtain a bank loan or other forms of financing.
Although they are especially needed by new businesses, every business should have a step-by-step draft of their business plan.
Further, a business would revisit the plan from time to time to see if goals have been met or have changed and evolved.
In the same vein, a new plan is required by a business that is moving in a new direction.
Meanwhile, the following are the step-by-step guide of drafting a business plan.
The cover page must contain the name of the business, for example, FARM to ARM
In addition, date must also be included.
1. The Executive Summary.
This is where you introduce the business to the readers; and subsequently, this must be introductory as other important details will still be discussed later.
However, let the reader have an idea of the potential of your business and a taste of what to come. Ensure clarity and on the other hand, avoid the use of jargon.
It is often said that if your potential investor or financial institution read through and is pushed for time.
So, the executive summary can pass across every important detail to them very quickly.
However, another school of thought believes that the executive summary tends to oversimplify complex ideas.
Consequently, you must put the reader or audience into consideration when writing the executive summary as specialist or experts will skip the executive summary to check out the finer details of your plan.
2. The Business Details.
This section provides details of your business and as a result, the reader can verify that you truly exist.
This will oftentimes include:
- Date of registration
- Registration number (where applicable)
- Structure E.G partnership, sole proprietor, company
- Contact name
- Mobile number
- Landline number
- Postal address
- You tube
3. The service we render and how we do it.
You need to be clear on what the business does. That is to say, the core functionality of the business, should include:
- Your target customers
- What you do
- How you do it
- Your product value
That which differentiates you from others, that is to say, uniqueness
To sum up, this section is often called your selling point.
4. Business Background.
Here you summarize the history of your business. However, this should include:
- The origin of the business; the birth of the business idea
- milestone in the life of the business
- Major achievement so far (for an already existing business)
- Number of employees
- Number of customers
- Your currents turn over
- Intellectual property.
5. Our goal/mission
The best goal/mission is specific, measurable, achievable, and realistic and has a set time frame. For example, say having 5 outlets in five years.
Highlight the main steps which will assist in getting the job done, for example, increase marketing and gain investment to create more products, hire more experienced people.
In short, ensure to keep your mission statement short and simple (KISS)
6. Current and planned team.
Firstly, the biggest asset of any business is the human personnel.
So, Investors take actions based on the strength and profile of the people leading the business.
Likewise, you need to include the details of some of your team members.
Format: Name, title, role, qualification, experience, track record.
Certainly, you might wish to include details of advisors or consultants, and likewise, details of your recruitment policies and practices
7. Market analysis (market research, opportunity, structure)
Firstly, explain the research conducted that brought you to this level, in addition, also talk about the opportunity in the marketplace that you have recognized.
Above all, the corresponding revenue this opportunity represents.
The market structure talks about how you intend to do your selling either online, directly to wholesalers and retailers.
In addition, target market size is important to provide statistics to describe the market location and people
Understand your competitors, who they are, their strengths, and weaknesses. However, this knowledge will make you different and unique. Do thorough competitors analysis.
You might need to buy their products/services to gain first- hand knowledge of what they are offering and, further, compare it with your own without assumption.
9. SWOT Analysis (internal and external forces)
Think more widely about your strengths, weaknesses, opportunities, and, importantly, threats.
Some will be internal to your company; others will be forced outside your direct control. Therefore, are all important to identify and plan for
10. Marketing strategy and budget.
Certainly, you should consider the four P’s when doing this
- Products: ensure your products meet customer satisfaction
- Price: your price must be in tandem with the value you are offering.
- Place: ensure the products are sold at designated centers, further, the delivery method must also be highlighted
- Promotion: you must choose the right sales promotion which will appeal to the customers
Above all, marketing is the strategy of taking your product and placing it in the hands of your customers.
11. Assets held and planned.
The business holds various assets, meanwhile, it’s good to acknowledge your assets in your business and, consequently, explain how to replace them at the end of their life.
12. Financial plan
This section outlines at a high level your forecasted cost, revenue, profits and loss, break-even date, cash flow, and in addition, balance sheet.
This should also involve cost forecast (money out), revenue forecast, break-even forecast, profit and loss forecast, cash flow forecast, balance sheet forecast
13. Business continuity planning.
This should involve insurance, policies, and computer backups and system. Sometimes things don’t go our way, however, its important to have a plan for when your business is interrupted by unplanned disaster or machinery malfunction.
14. Legal and regulatory compliance.
For example, businesses have legal regulatory compliance, regulations, and operating certifications, further, this also form part of the guide of drafting a business plan.
- Registered as employers
- Trademarked my business name and logo
- Applied for required licenses and permits.
However, diligently going through these step-by- step guide will certainly, guarantee success in your business startup or your existing business.
To sum up, business plan is needed by all aspiring business owners.
SUBSCRIBE TO OUR BLOG TO GET MORE BUSINESS TIPS
About the Author
Shonekan Oluwasseun is an entrepreneur, online marketer, and a content writer. A former customer care representative at GLOBACOM.
He is the CEO of FARM to ARM, an agro-food packaging enterprise in Lagos, Nigeria. A writer by day and reader by night.
Visit shonekanoluwaseun.blogspot.com for more