Do you already have a business idea or concept but confused about how to transform it into that ‘megabusiness’ of your dream? Have you been ruminating over what business to venture into despite limited funds to usher you into the desired financial breakthrough? Or you have a low budget for that new business and don’t know how to make it work? Do you fall into any of the aforementioned categories? Then this write-up is for you.
The good news is that a limited takeoff capital is not as much of an impediment to succeeding in a new business as a lack of ideas, thorough planning and a motivation for success.
Sadly, countless businesses have failed to thrive because of the erroneous impression that a robust starting capital is all there is to floating a successful business. But they got it all wrong!
Henry J Turner, Executive Director of Small Business Development Centre Network at Howard University says, “Don’t start until you have a business plan. The reason a large number of small businesses don’t survive beyond three years is the lack of financial planning.” Hence, if you are willing to start a business that will be sustainable in the long-term, having a good business plan will definitely not be a bad idea!
What exactly is a business plan? What are the potential benefits? How can you develop one? These are some of the questions this article seeks to address with a view to giving you the necessary edge over competitors.
Simply, a business plan is a written document that gives a vivid description of your business. Arguably, the potential benefits of a well-developed business plan cannot be overemphasized.
1. It helps to clarify your business ideas and define your goals and objectives.
2. It provides a road map for running the business.
3. It serves as a template for progress evaluation.
4. It helps with obtaining bank loans or financial support from investors.
A top-notch business plan will usually contain the following sections:
1. Executive summary: This part of the business plan highlights your product (and what makes it special) and features identified market opportunities, funding requirements and expected returns. If you are interested in financial support, then this section must be enticing.
2. The Business: Here, you need to give background information about your business idea in terms of how long you have been nurturing it, how much is on ground already, the proposed ownership structure and any relevant experiences you may have.
How will your product stand out? What do customers stand to gain from patronising you?
3. Markets and Competitors: This is where you focus on your target customers and why they should patronise you and not other competitors in the market that render a similar service or sell similar products.
4. Sales/Marketing: How do you intend to meet specific customer needs? What marketing strategies do you plan to employ? For instance, flyers, posters, internet via websites, blogs, social and print media and so on.
5. Management: You are to outline the management skills within your team, stressing areas of strength and weakness. It also includes the proposed remuneration of team members.
6. Operations: What facilities will your business need? For instance, if you are considering going into web design, all you need may just be a good computer with reliable internet connection and you can work from the comfort of your room.
7. Financial forecasts: This is where you reel out the figures – a cash flow statement showing how much money you expect to flow into and out of your bank account and when you expect your business to break even.
8. Financial Requirements: Here, you are to state how much funds your business requires and the likely source(s) of funds – bank loan/overdraft, personal savings or support from investors. State what the funds are to be used for ranging from procuring equipment, debt financing to advertising.
http://www.prosper.com is a tested source of microloans.
9. Risk assessment: It is very important to help minimize problems in the event that something goes wrong. It also gives credibility to your business.
10. Appendices: In this section, you may include other relevant information like detailed CVs of key personnel (especially if you need external funding) as well as market research data and product literature.
In conclusion, although the task of developing a sound business plan may appear daunting, it is usually worth the effort as it keeps your vision clear, helping you maintain focus on key areas of the business all the way.
It’s high time you unleashed that business idea of yours and who knows? It may just be the next big thing. Welcome to the business world!